How COVID-19 shaped Nigeria’s unemployment crisis in 5 numbers
Nigeria already faced a daunting challenge to create jobs for its teeming population before COVID-19 hit, but this has been worsened by the pandemic as many Nigerians are taking temporary jobs unable to lift them out of poverty.
According to a recent report by the World Bank, Nigeria’s labour market has not improved as many Nigerians are taking on precarious or temporary jobs to deal with the negative shocks of the pandemic to household income.
The temporary jobs most Nigerians are engaging in are unlikely to offer secure pathways out of poverty with about 40 percent of Nigeria’s 200 million population living in extreme poverty.
These five numbers show how the pandemic has shaped Nigeria’s unemployment crisis
According to a report by the World Bank, before COVID-19, most Nigerian workers are engaged in household agriculture and non-farm enterprises. Although the jobs were unlikely to secure a way out of poverty as most of the farm activities were not commercialized, only a quarter sell agricultural products and many lack access to key inputs like seeds and fertilizers.
On the other hand, the non-farm enterprises were extremely small scale with almost 9 in 10 people not employing anyone outside their household.
Most people engaged in these jobs are also underemployed, working only a few hours a day.
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Interestingly, after the oil price shock of 2016, the number of Nigerians engaged in household agriculture jumped from 27.9 percent before the pandemic to 35.9 percent.
Following the recession of 2016, more Nigerians moved into the agricultural sector at the expense of the commerce and industry sector. The number of Nigerians working in the agriculture sector rose to 37 percent from 28.6 percent during the 2016 recession.
According to the World Bank, this resonates with the macroeconomic data from this period, which demonstrate that the 2016 recession affected real GDP growth in industry and services significantly more than agriculture
“This could reflect individuals seeking income-generating opportunities to cope with the economic shock, even if not in the activities to which they were best suited,” the report stated.
Before the pandemic struck in 2020, comparing people’s job types between July-September 2018 and January-February 2019, the share of working-age Nigerians engaged in non-farm household enterprises rose by 3.2 percentage points to 34.6 percent.
However, by September 2020, during the COVID-19 crisis, the share of non-farm enterprises rose 8.0 percentage points to 40.4 percent as Nigerians have turned to non-farm household enterprises engaged in services and commerce in order to cope with the effects of the COVID-19 crisis.
According to the survey by the World Bank, there was an increase in working rates during the COVID-19 crisis to 71.7 percent from 63.7 a year before but this was not as a result of improving job conditions but a coping mechanism to deal with negative shocks to household income.
More Nigerians took advantage of the agricultural cycles to increase their working rates.
“In the 2018/19 agricultural cycle, before COVID-19, working rates sharply decreased, from 77.3 percent in July/September 2018 to 63.7 percent in January-February 2019, a decline of some 13.6 percentage points.
However, in the 2020/21 cycle, working rates only fell by about 2.1 percentage points, from about 71.7 percent in September 2020 to about 69.6 percent in January 2021,” the report stated.
According to data from the National Bureau of Statistics, Nigeria’s unemployment rate hit a record high in 2020 at 33.3 percent, the third highest in the world after South Africa and Namibia ranking highest with 34.4 percent and 33.4 respectively.
The World Bank recommended that to address unemployment, the government must loosen credit constraints and help small enterprises thrive and grow.
“Waiting for wage jobs for everyone could take decades, it will be essential to help small enterprises thrive and grow. For farms, research into improved crop and livestock varieties as well as public investment to support storage, transport, and market access could help boost agricultural productivity.
For non-farm enterprises, policies that loosen credit constraints and build the infrastructure and markets on which small businesses rely could bolster productivity, profits, and job creation,” the Bank said.