Self-employment lowers Nigeria’s jobless rate to 4.3%

Nigeria’s jobless rate dropped to 4.3 percent in the second quarter (Q2) of 2024, driven by a rise in self-employment.

The latest Nigeria Labour Force Survey Q2 2024 by the Nigerian Bureau of Statistics (NBS) revealed that the country’s unemployment rate dropped to 4.3 percent in Q2 2024 from 5.3 percent in Q1.

Oludele Folarin, a US-based development economist, said Nigeria’s unemployment rate appears to correlate with self-employment.

“When more people are self-employed, the unemployment rate drops. People are creating their jobs and the informal employment rising to 93 percent indicates that the quality of job is low,” he said.

The Nigeria Labour Force Survey Q2 2024 by NBS revealed that the proportion of persons in self-employment in Q2 2024 was 85.6 percent. “Survey findings reveal a decrease in the share of employed persons primarily engaged as employees between Q2 2024 (14.4 percent) and Q1 2023(16.0 percent).

“The self-employment rate among females was 88.3 percent while males was 82.2 percent,” NBS said.

The report released on Monday showed that the rate of informal employment in Nigeria remains high in Q2 2024 compared to previous quarters, increasing marginally from 92.7 percent in Q1 2024 to 93.0 percent during the reference period.

The NBS report stated that in Q2 2024, 2.0 percent of people outside the labour force were discouraged job seekers, compared to 3.6 percent in Q1 2024.

“This decrease suggests an increase in the labour force participation and perhaps an increase in the agriculture related activities,” NBS said.

Read also: Nigeria’s unemployment rate slows to 4.3% in Q2 2024

Adeola Adenikinju, president of the Nigerian Economic Society (NES), said the second quarter is a farming season, hence it can be a reason for people to go into the farm, leading to employment.

“There could have been more activity on the farm in the second quarter, which could be responsible for the decrease in unemployment rate,” he stated.

The Nigeria General Household Survey-Panel (Wave 5) 2023/2024 report by NBS, which tracks Nigerian households to understand their resilience over time, stated that its results show that approximately seven out of 10 households are engaged in crop farming, while 42.8 percent are engaged in livestock activities.

“Regarding land tenure, Nigerian households hold an average of 2.4 plots of land with an average plot size of 0.5 hectares,” it stated.

“The most common means of acquiring land is through family inheritance; 64.9 percent of male-managed plots and 59.7 percent of female-managed plots were acquired in this way,” it said.

The report stated that during the post-harvest visit, agriculture was the leading activity for males (34.7 percent), while the top area of involvement for females was non-farm enterprise (31.3 percent).

Data disaggregated by sex indicate that 34.7 percent of working-age males and 24.0 percent of working-age females were involved in farming activities. “25.1 percent of working-age males were engaged in nonfarm enterprises, compared to 31.3 percent of working-age females.

“A larger share of working-age males (14.7 percent) than working-age females (6.7 percent) reported engagement in wage employment,” it stated.

The Nigeria General Household Survey-Panel revealed that the two main sectors of wage employment in Nigeria were agriculture and trade.

“However, male workers tend to concentrate more on agricultural activities (35.2 percent), while women concentrate more on trade (38.5 percent),” it said.

The president of the Nigerian Economic Society said with multiple shocks in the economy, it will be difficult to expect that unemployment will fall at this time.

“The informal sector will be the sector growing, which led to the fall in unemployment rate, but jobs in the informal sector are not decent high-paying jobs but rather low wage,” Adenikinju said. “We need growth in the formal sector because growth in the formal sector is more crucial.”

He said Nigerians are very enterprising, stating that instead of sitting at home, they rather take jobs to survive, including jobs which are not necessarily decent or high paying but are needed to survive.

Oluwasayo Folarin, mergers and acquisitions associate at The AES Corporation, said the share of informal employment, representing 93 percent of the survey’s respondents by NBS, skewed the data to reflect that the unemployment rate declined to 4.3 percent in Q2 2024 from 5.3 percent in Q1.

“The reduction in the employment rate raises more questions about the quality of the data collection process,” he said.