The menacing economic recession has thrown 1.7 million Nigerians out of the labour markets.
According to a recent report by the National Bureau of Statistics (NBS), the number of unemployed Nigerians rose from 9.48 million at the beginning of the year to 11.19 million by September ending.
The report said the unemployment rate was highest for those within the ages of 15 to 24, rising from 21.5 per cent in the beginning of the year to 25 per cent as of September ending this year. Spiraling job loss is unsurprising given a sudden drop in oil price since mid 2014 that caused a severe dollar shortage that crippled business activities.
Effect of Buharinomics
To further exacerbate the already anemic position of companies is the capital controls imposed by the Central Bank of Nigeria (CBN) that saw 41 items ban from the official windows while pegging the currency at N197-N199 for 15 months. Consequently, firms were forced to seek dollars from the limited black market. The impact have been  corrosive to say the least as firms scaled back on expansion plans while some have closed shop as they have been unable to import raw materials, machinery and other inputs required for production.
Early this year, Truworths International Ltd; South Africa’s clothing firm, closed its two remaining Nigerian stores, blaming the strategic move on foreign exchange controls and rising costs.
International carriers are not spared the economic woes as United Airlines and Iberia halted operations in Nigeria or cut flights as they struggle to move revenue out of the country. A shortage of dollars has hindered airlines aviation fuels hence paralyzing the sector.
While the apex bank has adopted a flexible exchange rate regime that saw the naira loss 40 percent of its value against the US currency, the policy has not attracted the needed foreign direct investment as investors fear the narrow could be weakened further seeing that the disparity between the official(s) and parallel market rate is as wide as N150 (the rate at which the dollar exchanged with the naira back in July and just before the crash).
Supporters of the ruling government will point to CBN policies and not theirs as the major reason for the failing economy. However, it is well documented that the current president is very well in support of the monetary policies of the CBN and has often thrown its weight behind it. In addition, fiscal policies of the current government have either been non existent or failed to work when implemented.
Expectedly, Nigeria’s economy shrank by 2.2 percent in the third quarter, its worst recession in 25 years, according to National Bureau of Statistics (NBS). The International Monetary Fund (IMF) forecasts that the economy will contract by 1.7, by 2016.
Inflation for the month of November accelerated to 18.30 percent, the highest in 11 years.
Nigeria’s unemployment rate rose for the seventh straight month to 13.9 percent in the third quarter of 2016 from 13.3 percent in the previous period.
‘Given that the nature of rural jobs is largely menial and unskilled, such as in agriculture and the likes, unemployment is more of a concern in urban areas where more skilled labour is required.
‘The unemployment rate in the urban areas was 18.3 per cent compared to 11.8 per cent in the rural areas, as the preference is more for formal white collar jobs, which are located mostly in urban centres,’ the report said.
