The World Bank has said that five million Nigerians joined the labour force in 2018 while only 450,000 of them were employed.
In its Nigeria Economic Update (NEU) Report released in Abuja on Monday, the bank with population growth (estimated at 2.6 percent) outpacing economic growth, per capita incomes are falling.
National Bureau of Statistics reported that Unemployment and Underemployment Report for Quarter 1 to Quarter 3, 2017 had noted that “The number of people within the labor force who are unemployed or underemployed increased from 13.6 million and 17.7 million respectively in Q2 2017, to 15.9 million and 18.0 million in Q3 2017.
“Total unemployment and underemployment combined increased from 37.2 percent in the previous quarter to 40.0 percent in Q3 2017.”
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The agency explained that as of Q3 2017, 67.3 percent of young people aged 15-24 years were either underemployed (engaged in work for less than 20 hours a week or low skilled work not commensurate with their skills and qualifications) or unemployed (have no work at all but willing and actively seeking to work), compared to 64.6 percent in the previous quarter.
Combined underemployment plus unemployment rate for the 25 to 34-year age group stood at 42.5 percent within the quarter under review, compared with 39.6 percent in the previous quarter.
According to the World Bank NEU Report, “Nigeria’s economy is recovering gradually from the 2016 recession, with growth projected to pick up from 1.9 percent in 2018 to 2 percent in 2019 and 2.1 percent in 2020-21, according to the latest World Bank Nigeria Economic Update (NEU) Report.
This growth outlook is vulnerable to external and domestic risks, including geopolitical and trade tensions that may affect inflows of private investment.
According to the report, Nigeria has the opportunity to advance reforms to mitigate these risks amid growing public demand for greater economic opportunities.
The report, titled “Jumpstarting Inclusive Growth: Unlocking the Productive Potential of Nigeria’s People and Resource Endowments”, shows that Nigeria created about 450,000 new (net) jobs in 2018, partially offsetting the loss of 700,000 jobs in the previous year.
However, Nigeria’s labor force is growing rapidly, and in 2018 over 5 million Nigerians entered the labor market.
This resulted in 4.9 million more unemployed people in the last year.
The positive news is emerging from some states that are creating enough jobs to keep up with the growth of their labor forces.
In the year following the recession (between the first quarter of 2017 and the first quarter of 2018), 10 states saw some positive job creation, but the number of new jobs was not enough to absorb the new entrants into the labor force.
The situation improved by the third quarter of 2018, as four states (Lagos, Rivers, Enugu, and Ondo) created more jobs than the entrants to the labor market, and as a result, these states reduced unemployment.
Recent government efforts to boost job creation include improvements in regulations to make it easier to start and operate a business.
In this regard, Nigeria improved its ranking in the Doing Business index from 169th in the world in 2017 to 131st in 2019.
Other efforts include the recent launch of the Central Portal for Government Services, which aims to increase transparency and also support the development of the digital economy.
In the trade area, the government signed in July 2019 the Africa Continental Free Trade Area (AfCFTA) agreement; a signal that Nigeria is now more willing to become a driver of continental growth and integration.
The government has also taken measures to enhance social protection systems.
“Reforms would help achieve faster, more inclusive, and sustained growth with jobs”, said Shubham Chaudhuri, The World Bank Country Director for Nigeria.
“Building on recent efforts, going forward we recommend actions in priority areas, including increasing fiscal revenues and improving the quality of spending to manage oil-sector volatility, investing in much-needed human capital and infrastructure, and improving the business climate to unlock private investment and tackle Nigeria’s jobs challenge.”
The report discusses ways to boost the productivity and resilience of the Nigerian economy, including leveraging trade integration to harness the benefits of the Africa Continental Free Trade Area; improving the efficiency of spending in education; monitoring the impact of conflict to protect the poor and vulnerable; and leveraging digital technologies to diversify the economy and create jobs for young workers.
“Investing in people and removing barriers that make it difficult for new firms to compete and grow will encourage entrepreneurship and innovation, spur job growth, and ultimately reduce poverty”, said Chaudhuri.
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