Clock ticks for Nigeria, others to create jobs for citizens – IMF

As the world contends with aging populations, Nigeria and the wider Sub-Saharan African African must create jobs for their people, according to the International Monetary Fund (IMF).

This is because the region faces a different demographic trend: a booming youth population. By 2030, nearly half of all new labor force entrants will come from sub-Saharan Africa, says the IMF.

Meeting the employment needs of this rapidly expanding population, particularly in Nigeria, requires creating millions of jobs annually—a complex challenge with significant structural and economic obstacles.

According to the IMF’s October 2024 Regional Economic Outlook of SSA, fragile, low-income economies like Nigeria bear a disproportionately large share of this job creation challenge.

Across the region, an estimated 15 million new jobs are needed annually, with nearly 80 percent of this demand concentrated in economies struggling with stability, infrastructure limitations, and low productivity.

Nigeria, as Africa’s most populous nation, exemplifies this urgent need. High fertility rates and a growing youth demographic mean that Nigeria’s labour force will continue to expand for decades.

While other African countries such as Botswana and Mauritius have seen their youth population growth rate levels off, Nigeria’s circumstances demand immediate and sustained action to create sufficient employment opportunities.

Addressing Nigeria’s Employment Challenges

For Nigeria, the path forward involves generating not only a high volume of jobs but also ensuring their quality and sustainability. According to the IMF’s October 2024 Report, three core strategies could significantly influence Nigeria’s employment landscape and improve living standards for millions:

One is the transformation of informal jobs. IMF says Nigerian economy relies heavily on informal work, which often traps workers in low-wage, low-productivity roles. To unlock the potential of these jobs, targeted policies should focus on boosting productivity, expanding skills training, enhancing access to finance, and creating pathways to formal employment.

IMF explains that programmes that focus on integrating women, who face additional employment barriers, could also yield substantial socioeconomic benefits across communities.

Second is the promotion of job growth in high-productivity Sectors. Sectors such as modern services and manufacturing hold vast potential for job creation if Nigeria can implement the right conditions. IMF says limited public funds mean policymakers must prioritise initiatives that yield widespread benefits, such as improving market competition and investing in essential infrastructure. However, Nigeria should carefully consider any industrial policies to avoid the costly and sometimes counterproductive impacts of sector-specific support.

IMF adds that there isa need to remove barriers to private sector growth. “Strengthening critical infrastructure—such as electricity, internet connectivity, and transportation—can facilitate business growth. Reducing regulatory red tape, addressing corruption, and attracting foreign investment are equally important to bolster Nigeria’s business environment. Additionally, improved regional trade and integration could expand Nigeria’s market reach, helping to stimulate a more robust economy.”

Why Global Stakeholders Should Take Notice

Nigeria’s employment success has implications far beyond its borders. The IMF report emphasises that job growth in SSA, especially in larger economies like Nigeria, could create a ripple effect for the global economy, increasing consumption, fostering investment, and reducing migration pressures.

On the other hand, failing to meet employment needs could lead to heightened poverty, instability, and increased migratory flows.

Thus, the international community has much to gain from Nigeria’s success. By implementing data-driven policies, Nigeria can pave the way to economic growth and a brighter future for its youth, unlocking the potential of its demographic boom and contributing to global prosperity.