Nigeria’s fastest-growing sectors employ only 1.5 percent of the workforce, with majority of workers trapped in low-productivity activities, although contributing strongly to gross domestic product (GDP).
Dr. Wilson Erumebor, senior economist at the Nigeria Economic Summit Group (NESG), speaking during the 31st Nigerian Economic Summit in Abuja, revealed these insights from a sectoral grid developed by the NESG, to highlight the widening gap between economic growth and job creation in Nigeria.
The grid was developed using figures from the National Bureau of Statistics (NBS) 2023 data on sectoral GDP and employment.
Erumebor warned that this structural imbalance continues to undermine inclusive growth and shared prosperity, making the country’s growth profile to be increasingly disconnected from employment outcomes. “The country’s fastest-growing sectors employ just 1.5 percent of the workforce, while the least productive sectors employ the most workers in Nigeria”, he said.
The data shows that the top five sectors driving GDP growth in 2023, together accounted for only 1.5 per cent of total employment. The sectors are namely: Finance and insurance (26.53 percent), water supply, sewerage and waste management (12.65 percent), information and communication technology (7.91 percent), electricity, gas, steam and air conditioning supply (5.56 percent), and arts, entertainment and recreation (4.28 percent).
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“ICT is a high-productivity sector, but it employs fewer people,” He noted, highlighting a broader pattern in which productivity gains are not translating into widespread job creation.
By contrast, labour-intensive sectors such as manufacturing and construction, which have the capacity to absorb large numbers of workers and generate mid-to high-productivity jobs, are struggling to scale. “This is one of the reasons why, anytime we hear GDP growth, it does not really impact the majority of Nigerians,” he said.
He described agriculture and trade as “stagnant giants” within the economy. While they employ a large share of the workforce, their productivity remains low. “They employ a larger number of the workforce, but have low productivity. This means that the jobs that will lift people out of poverty are not being created in large numbers in Nigeria today,” he said.
Erumebor warned that the implications go beyond employment statistics. “It is not just a labour market problem, but a huge development challenge,” he said, cautioning that without urgent action, an entire generation could be trapped in low-skilled, vulnerable jobs that neither lift their families out of poverty nor move the nation forward”.
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27 million new jobs needed by 2030 to avert generational crisis
In response to the challenges highlighted above, Erumebor said Nigeria must create at least 27 million jobs by 2030, equivalent to about 4.5 million jobs each year, to stem rising unemployment and losing an entire generation to poverty.
He urged an urgent shift from a focus on job quantity to job quality, anchored on productivity growth and the creation of decent, productive employment for a rapidly expanding population.
He also warned that the consequences of failure would be severe. “If we succeed, our young population will be the agents of economic transformation and prosperity. But if we fail, unemployment and underemployment will double by 2030 and an entire generation could be wasted.”
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Weak private sector and skills mismatch
One of the core structural problems identified in the report is the limited depth of Nigeria’s private sector.
“Our private sector, which ideally should be the engine of economic growth, is too small to create the kind of jobs that the economy needs, both in terms of quality and quantity,” Erumebor said.
In many states, economic activity remains concentrated in capitals and urban centres, with heavy dependence on government spending. “According to the NBS, in some states, the government is the largest single employer of wage earners in the country,” he said.
Alongside this is a persistent skills mismatch. “Many Nigerians lack the technical, digital and soft skills to access the few quality jobs available,” Erumebor noted, adding that employers “often complain about the difficulty in finding people with the right skills across key sectors”.
The mismatch, he said, was fuelling brain drain and trapping workers in unproductive livelihoods. “This drives brain drain and keeps many stuck in unproductive work, hustling every day below their true capacity.”
He also called for the upgrading of informal enterprises through better infrastructure, affordable finance and skills training, arguing that “these businesses are too important to our economy and to our people”.
Education crisis undermining future productivity
The report also highlighted deep weaknesses in the education system, particularly at the foundational level. “While millions of Nigerians are out of school, those that are in school are not learning as they should,” Erumebor said.
Citing data from the NBS, he noted that “only 46 per cent of children aged four to six years can name at least ten letters”, while fewer than half could write or count adequately. “This tells us that a learning crisis is unfolding,” he warned.
On skills, Erumebor called for urgent reform of technical and vocational education. “We have to reform our technical and vocational education system, modernise training systems and align them with industry needs,” he said.
To address these challenges, Erumebor unveiled the Nigeria Works Framework by the NESG, which he described as a blueprint for a national jobs and productivity agenda. “This framework is a blueprint for a jobs and productivity agenda,” he said.
