High unemployment tips Nigeria into top six most miserable countries globally

Nigeria’s latest unemployment rate of 27 percent means Africa’s most populous nation now ranks among the top six most miserable countries in the world.

Nigeria, with a misery index of 39.66 percent, is not only reeling from rising unemployment but also a stubbornly high inflation rate which accelerated 12.56 percent in June 2020.

The above development means Nigeria has the sixth highest misery index in the world behind Turkey of 50.6percent, Brazil of 52.3 percent, Iran of 75percent, Argentina of 136.1 percent and Venezuela of 7,459 percent.

It also means Nigeria has the highest misery index of any other African country.

Meaning of misery index

The misery index is an indicator that is used to determine how economically well off the citizens of a country are. It is the sum of the unemployment and underemployment rate and the inflation rate of the particular period.

These factors are important because they pose economic and social costs to the average income earner.

Implication

“Nigerians are actually going very difficult economic times; No wonder we have seen a lot of social issues in country like suicides, increased level of crimes and other negative social vices,” Johnson Chukwu, CEO at Cowry Asset Management Limited said.

He further explained that the figure should be a wakeup call for the government. “They should realize that for you to have improved level of social stability people must be engaged in society.”

Other economists expect consumers to face an even deeper dwindling in purchasing power, as their incomes can only buy less of their usual consumption basket which implies the poor will become poorer in real terms, while the middle class will thin out.

“Climbing misery index implies declining economic activity and reduced consumption,”Charles Akinbobola, an analyst at Sofidam Capital said.

This is because unemployed people are underutilized and rising prices will discourage rational consumers from spending which can cause or complicate an economic slowdown or contraction.