The unemployment problem facing millions of Nigerians has shown no sign of abating as the country’s economic growth slowed in the first quarter of this year compared to the previous quarter.
Africa’s biggest economy grew by 3.11 percent in the first three months of 2022, down from a growth rate of 3.98 percent in the fourth quarter of last year, according to the National Bureau of Statistics (NBS).
When President Mohammed Buhari came into power in the second quarter of 2015, the country’s unemployment rate was at a single digit of 8.2 percent, NBS data show.
It surged to 33 percent in the fourth quarter of 2020. Although unemployment numbers for 2021 are yet to be released, the Presidential Economic Advisory Committee projected that the rate had increased further to 40 percent.
“The labour market has become extremely weak following the economic recession of 2016 and the COVID-19-induced economic crash of 2020,” Temitope Omosuyi, investment strategy analyst at Afrinvest Limited, said.
According to Omosuyi, the condition merely reflects the prolonged less inclusive growth, which is a fallout of the underperforming real sector of the economy.
Employment is one of the most important economic indicators used to measure the health and performance of any economy. In Nigeria, high unemployment rate has adversely affected the disposable income of families and eroded their purchasing power.
A recent Steve Hanke misery index ranked the country’s misery index at 11th out of 156 countries in 2021 from 15th in the previous year.
A 2022 World Happiness report showed that Nigerians are sadder now than they were 10 years ago as it ranked 118th out of 150 countries.
Moses Ojo, a Lagos-based economic analyst, said the increased number of unemployed persons indicates low individual productivity, which has led to an increase in poverty and criminal activities.
In 2021, the economy recorded a growth rate of 3.4 percent, the highest since 2014 but that growth failed to reflect in some of the major job-creating sectors of the economy.
According to the NBS, sectors such as agriculture, manufacturing, and construction, which grew by 4.3 percent, 14.7 percent and 13.03 percent respectively in 2014, saw their growth rates fall to 2.13 percent, 3.35 percent and 3 percent in 2021.
“The displacement of people from their farms due to high rate of terrorism, herdsmen and kidnapping crisis is more serious now when compared to 2015,” Muda Yusuf, chief executive officer at Centre for Promotion of Private Enterprise, said.
“These issues have led to serious implications to employment in the agricultural sector since it is the largest employer of labour.”
According to the Armed Conflict Location & Event Data Project, about 1,200 people have been kidnapped in the first half of 2021 compared to 45 in 2010.
Apart from the agricultural sector, the manufacturing sector has also continuously faced several structural challenges leading to low productivity, which has caused manufacturing companies to shut down, limiting growth and investment inflow into the sector.
“The health of the labour market hinges on the performance of the real sector. We need to address the drags to the growth of large, medium to small-scale businesses in the country to reduce the unemployment rate,” Omosuyi said.
Compared to other age groups, unemployment is highly felt among those between the ages of 15 and 34, who make up over 65 percent of the country’s population of over 200 million.
Data from NBS show that the number of unemployed young persons increased by 220 percent to 12.8 million in Q4 2020 from 4.0 million in Q2 2015.
Amid the jobs crisis, a number of young people have resorted to armed robbery, banditry and kidnapping, which have made it difficult for the government to attract the investment needed for job creation.
Read also: Reflections on Nigeria’s unemployment woes
Many are now seeking opportunities to travel abroad, fuelling a massive brain drain that is hurting the labour market in Nigeria.
“The pace at which this is happening is really fast. There is no country that will grow significantly if there is a huge brain drain,” said Kemi Ogunkoya, a leadership development strategist.
Last year, the World Bank said in a report that the high rate of poverty was forcing the youths to abandon furthering their education in higher institutions in order to find jobs in the informal sector.
“By 2030, the number of youth needing jobs will increase to 40.2 million from about 30.8 million projected in 2021 which could worsen poverty on the continent because informal sector jobs are unlikely to offer secure pathways out of poverty,” it said.
Over 90.1 million Nigerians are now living in extreme poverty and that number is expected to increase to 95.1 million, according to the World Bank. The Buhari government has said it planned to lift 100 million people out of poverty by 2030.
The government said last year that it had successfully lifted 10.5 million Nigerians out of poverty in the last two years through its social intervention programmes.
“It is not as if the government is not trying to address the situation,” Damilola Adewale, a Lagos-based economic analyst, said. “But the barriers like inadequate skilled labour force, a large informal economy and lack of adequate budget allocation to education and labour intensive work programs are thwarting their efforts.”
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
