Nigeria, a nation grappling with a burgeoning population and economic challenges, has witnessed a troubling increase in its unemployment rate. According to the National Bureau of Statistics (NBS), the unemployment rate rose to 5.3% in the first quarter of 2024, a concerning 0.3% increase from the previous quarter. This trend has raised significant alarm among policymakers, economists, and citizens alike.
Gender and Regional Disparities
The impact of unemployment is not evenly distributed across Nigeria’s population. Women continue to face higher unemployment rates than men, with 6.2% of female job seekers remaining unemployed in the first quarter of 2024, compared to 4.3% for male counterparts. This gender gap persists despite efforts to promote gender equality in the workplace.
Moreover, regional disparities in unemployment are evident. Urban areas have a higher unemployment rate of 6.0% compared to 4.3% in rural areas. This discrepancy can be attributed to factors such as limited job opportunities in rural regions and the concentration of industries and services in urban centres.
Youth Unemployment Remains Persistent
Youth unemployment remains a persistent challenge in Nigeria. While the rate decreased slightly to 8.4% in the first quarter of 2024, it remains significantly higher than the overall unemployment rate. This is a troubling indicator, as young people are often the most vulnerable to unemployment and its associated consequences.
The Impact of Education
Educational attainment plays a crucial role in employment prospects. Individuals with higher levels of education generally have lower unemployment rates. For example, those with postgraduate education had an unemployment rate of 2.0%, while those with primary education faced a rate of 4.0%. However, even with higher education, finding suitable employment can be challenging in a competitive job market.
Labour Force Participation and Employment-to-Population Ratio
Nigeria’s labour force participation rate, which measures the percentage of the working-age population actively seeking employment, stood at 77.3% in the first quarter of 2024. While this rate is relatively high, it has declined compared to previous quarters, indicating a potential decrease in the willingness of individuals to participate in the labour market.
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The employment-to-population ratio, which measures the proportion of the working-age population that is employed, also experienced a decline. This suggests that a growing number of individuals are unable to find work or are underemployed.
Self-Employment and Employee Status
Self-employment remains a dominant form of employment in Nigeria. However, the proportion of individuals engaged in self-employment decreased slightly from 86% in the previous quarter to 84% in the first quarter of 2024.
This trend is accompanied by a slight increase in the share of employed persons working as employees, increasing from 12.7% in Q3 2023 to 16.0% in Q1 2024, suggesting a growing preference for formal employment arrangements.
Among females, the self-employment rate was 87.9%, while for males it was 79.9%. In rural areas, the self-employment rate was 91.9%, compared to 78.2% in urban areas,
Underemployment and Discouraged Job Seekers
Underemployment, which refers to individuals who work fewer hours than they would like or who are employed in jobs below their skill level, remains a significant issue in Nigeria. While the underemployment rate decreased slightly 10.9% in the first quarter of 2024 down by 1.4 percentage points from 12.3% in Q3 2023. it remains above 10%. This indicates that many individuals are unable to secure full-time or suitable employment.
The NBS defines underemployment as those who work less than 40 hours a week and are willing to work more.
Furthermore, the number of discouraged job seekers, those who have stopped actively searching for work due to a lack of suitable opportunities, increased in the first quarter of 2024.
The report noted that more youths are getting discouraged from seeking employment as the figure in this category rose from 3.1% in Q3, 2023 to 3.6% in the quarter under review.
The rate of discouraged job seekers was 3.4% for males and 3.8% for females in Q1 2024.
This is a concerning trend, as it suggests a growing sense of hopelessness and disillusionment among the unemployed population.,
If You Ask Me: Underlying Causes and Potential Solutions
The rising unemployment rate in Nigeria is a complex issue with multiple contributing factors. These include economic challenges, such as slow growth, inflation, and limited investment; structural issues, such as a lack of vocational training and skills development; and social factors, such as inequality and corruption.
Addressing Nigeria’s unemployment crisis requires a multifaceted approach. Policymakers must focus on creating a conducive business environment, promoting economic growth, and investing in education and skills development. Additionally, efforts to reduce corruption and inequality are essential for creating a more equitable and inclusive society.
Furthermore, fostering entrepreneurship and supporting small and medium-sized enterprises (SMEs) can help create job opportunities and stimulate economic activity. By providing access to finance, training, and mentorship, policymakers can encourage the growth of businesses and generate employment.
The rising unemployment rate in Nigeria poses a significant challenge to the country’s economic and social development. Addressing this issue requires a comprehensive and coordinated effort from policymakers, businesses, and individuals. By implementing effective policies and promoting economic growth, Nigeria can create a more inclusive and prosperous society for all its citizens.
