NIGERIAN UNEMPLOYMENT RATE DROPS FROM 33.3% TO 4.1% IN TWO YEARS

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On Thursday, August 24, 2023, the National Bureau of Statistics (NBS) finally released its highly anticipated labor force report, marking over two years since the last one was published.

According to the NBS report, Nigeria’s unemployment rate for the first quarter of 2023 was recorded at 4.1%. This figure stands in stark contrast to the 33.3% reported in the fourth quarter of 2020. The release of these numbers has sparked reactions from various quarters, with many expressing skepticism about whether these statistics truly reflect the current state of the Nigerian job market.

These reactions come against the backdrop of a challenging economic and business environment in the country, characterized by high inflationary pressures, foreign exchange shortages, and escalating operating costs, among other factors. These conditions have significantly hindered the operations of numerous businesses across Nigeria, and it is widely believed that these challenges have contributed to the observed increase in the unemployment rate.

Here are the key highlights from the report:

  • Employment Rate: In the first quarter of 2023, approximately 76.7% of working-age Nigerians were employed. This is a slight increase from the 73.6% recorded in the fourth quarter of 2022, indicating that a significant portion of the population was engaged in some form of paid or profitable work for at least one hour per week.
  •  Part-Time Employment: Around one-third of employed individuals (36.4% in Q4 2022 and 33.2% in Q1 2023) worked fewer than 40 hours per week during both quarters. This trend was more prevalent among women, people with lower educational levels, young adults, and those residing in rural areas.
  • Underemployment: The underemployment rate, which accounts for employed individuals working less than 40 hours per week but expressing their willingness and availability to work more, stood at 13.7% in Q4 2022 and decreased to 12.2% in Q1 2023.
  • Wage Employment:Wage employment, where individuals receive regular salaries or wages, accounted for 13.4% of employment in Q4 2022 and decreased slightly to 11.8% in Q1 2023.

Why is this important to the economy;

This is significant because the labor force report serves as a vital gauge of employment levels within the country, shedding light on the job market’s condition and its broader influence on the economy. This information directly shapes government strategies aimed at fostering job creation.

While the latest report presents encouraging data concerning employment in Nigeria, it remains notably elevated when compared to neighboring African economies. Notably, Nigeria’s unemployment rate, as revealed in the report, exceeds that of nearby countries such as Niger (0.7%), Ghana (3.69%), and Benin (1.8%).