Analysts see no relief in sight for unemployment in Africa’s most populous nation until economic growth outpaces population growth rate.
Nigeria produces people at an average of 3 percent annually, leaving the country’s 1.4 percent GDP growth in the third quarter of 2017 anything but desirable.
GDP growth has underperformed population growth since 2015, according to data compiled by BusinessDay, following the collapse in oil prices.
“It would require about 6-8 per cent or more in GDP growth for there to be a decline in the continuous rise of unemployment in the country,” said Bismarck Rewane, Managing Director of Lagos-based Financial Derivatives Company in a telephone interview with BusinessDay.
“The economy still has a long way to go, as the emergence from recession is just the beginning of its journey.”
Unemployment is the proportion of those in the labour force who were actively looking for work but could not find work for at least 20 hours during the reference period, to the total currently active population, as defined by the International Labour Organization (ILO).
Most recent data shows that Nigeria’s unemployment rate ballooned to a seven-year high of 14.2 percent in the fourth quarter of 2016, according to the National Bureau of Statistics (NBS).
The Federal Government plans to provide at least 15 million jobs for Nigerians by the year 2020 as captured in the recently launched Economic Recovery and Growth Plan (ERGP)- designed by government to help the country fight its worst economic downturn in a quarter of a century.
Meanwhile, the government was able to create 3.9million jobs from 2013 to 2015, as stated in the job creation report from the NBS. The data shows 1.1million jobs were created in 2013, 1.2million in 2014 and 1.5 million in 2015.
“Although the economy has emerged from recession, the recovery remains fragile and sustained healthy growth elusive. Structural issues still exist, making it difficult for some businesses to break even. Labour cuts are usually a short-term solution to this problem.
Unless the real economy feels the direct impact of government interventions geared towards stimulating investments into the economy and by extension boosting business activities, the unemployment rate may maintain its upward trend,” said Chinwe Egwim, Macroeconomist and Fixed Income Analyst/FBNQuest.
Unemployment rate in Nigeria according to the NBS Q4 2016 report, increased to 14.2 percent from 10.4 percent in 2015, marking the highest jobless rate since 2009. In that period, the number of unemployed went up by 3.5 million to 11.549 million, while those employed rose at a slower 680.8 thousand to 69.6 million.
The labour force increased by 4.194 million to 81.151 million from 80.67 million in the previous quarter. The number of underemployed in the labour force (those working but doing menial jobs not commensurate with their qualifications or those not engaged in fulltime work) increased by 1,109,551 or 7.0 per cent.
The unemployment rate was higher for persons between 15-24 years old (25.2 percent), median age of 21years, women (16.3 percent) and in rural areas (25.8 percent).
Government concern over unemployment rate in the country led to the plan for the implementation of 500,000 job opportunities for a volunteer corps and a micro credit facility to a minimum of one million market women and artisans.
“Rather than the promise to create three million jobs annually, no fewer than three million Nigerians have instead lost their jobs in the more than two years of the President Muhammadu Buhari-led administration.
I have found in my travels across the country that whenever I get into conversations with young people their number one concern is whether they will be able to get a job for without a job they have no means of sustaining themselves or begin a family,” said opposition politician Atiku Abubakar.
According to the U.N., Nigeria will have a population of 300 million people by 2030, and 20 years later it will be the world’s third most populous nation after China and India, with 400 million people. To cope, the country would need to double the numbers of schools, hospitals and roads.
Endurance Okafor
