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South-South states record worst unemployment rate in Nigeria

The National Bureau of Statistics (NBS), on Friday, released the much-anticipated unemployment figures for states in Nigeria. 

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States' Unemployment Data

The National Bureau of Statistics (NBS), on Friday, released the much-anticipated unemployment figures for states in Nigeria. The data lists unemployment rates for every state in the country as at the third quarter of 2018.

According to the data, states in the Southern part of the country recorded the highest unemployment rates in the country. This is despite being some of the richest states in the country in terms of oil revenues and internally generated funds.

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Nairametrics Founder Ugodre Obi-Chukwu, first tweeted this on his twitter handle on Saturday.

Unemployment by Geopolitical Zones

Nairametrics analysed the data and clustered the states into the 6 geopolitical zones in the country. Nigeria has about 6 geopolitical zones which comprise of 36 states including the FCT.

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  • North Central states comprise of the FCT, Plateau, Niger, Nasarawa, Kwara, Kogi and Benue States respectively.
  • The North Eastern States includes Yobe, Adamawa, Taraba, Gombe, Bauchi, and Borno States.
  • North West states include Zamfara, Sokoto, Kebbi, Katsina, Kano, Kaduna, and Jigawa States.
  • South East states comprise of Abia, Enugu, Ebonyi, Imo and Anambra states.
  • South Southern states comprise of Akwa Ibom, Delta, Cross Rivers, Rivers, Edo and Bayelsa States.
  • South West states include Ekiti, Ondo, Ogun, Oyo, Osun and Lagos States.

Worst Geo-Political Zone – The South Southern states of the country, otherwise known as “South-South”, recorded the highest unemployment rate of 32 percent in the quarter under review.

  • This represents about 5.38m unemployed people in the region which has an estimated labour force of 16.7 million persons.
  • States in this region collect billions of naira monthly on Federal Allocations yet unemployment rates were the highest in the country.
  • In fact, Rivers and Akwa Ibom, two of the richest states in the country recorded a whopping 36.4% and 37% respectively in the unemployment rate.
  • Between them, there were about 3 million unemployed Nigerians.

A contrast to the South West – The situation in the South-South is a sharp contrast when compared to the South West region which recorded the lowest unemployment rate across the geopolitical zones in the country. The South West zone was reported as having an estimated workforce of 21.3 million persons. The number of unemployed persons stood at 2.9 million.

Why this is troubling- The South Southern zone of the country is host to oil wealth and some of the most hardworking people in the country.

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  • However, issues like oil spillage and gas flaring have severely impacted on life especially for people who earn their livelihood via fishing.
  • This was the trigger for militant activities over the years that have increased insecurity across the region and chased away most industries.
  • Nevertheless, the state government received billions of money in Federally Allocated Revenues and also generate billions in Internally Generated Revenues.  Nairametrics, in an earlier report, had questioned how states in Nigeria spend the billions of naira allocated to them on a monthly basis.

What is Lagos and the South West States doing better? Former Executive Secretary of the Lagos State Employment Trust Fund, Akin Oyebode weighed in on the data via his twitter handle.

Patricia

States in the southwest perhaps by virtue of their proximity to the Nations former capital, Lagos State, have created an enabling environment for businesses to thrive. Though most organisations complain of multiple taxations in the regions, industries prefer to start out in this region as it is relatively safe and attracts a higher purchasing power when compared to other zones. These states also have policies that directly target job creation.

The upshots – Unemployment statistics may be questioned, but other indicators point us in the same direction.

  • Unemployment is one of the developmental indices, and with all the billions of revenue both from FAAC and 13 percent derivation going to the South-South zone, the Governors of this zone should do better.
  • States in this region cannot rely only on oil revenues to create jobs. These states must have to create the right incentives and operating environments that can attract industries in their regions.
  • For example, despite being the region where the nation’s crude is pumped most of the oil companies locate their headquarters outside of the regions due to insecurity and militant activities.
  • Apart from fostering insecurity, high unemployment rate also contributes severely to urban migration. Younger people in these regions will continue to flee for other parts of the country where they feel they can get jobs or even exit the country in general.
  • Despite South-South woes, Nigeria’s unemployment rate is still very bad across all zones.
  • The Federal Government must implement policies that aid job creation across the country and it begins by creating an enabling environment for businesses to thrive.

Whatever model the South-West zone adapted to provide jobs and better the lots of the people, the South-South should draw a leeway from it and not compound unemployment woes in the country.

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

1 Comment

1 Comment

  1. Sosa

    April 29, 2019 at 1:55 pm

    Mr. Ugo Dre the entire nation has an unemployment problem. Anything close to 20% is pathetic and an indictment on all. I recall you were one of the proponents of the team that has exacerbated the unemployment problem in this country. The myopia which characterized your insight then is again evident here. take care

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Business News

Why households that engage in subsistence agriculture are poor – Yemi Kale

“We established the poverty line at N137,430 and any individual or family that spends below this on food in a year will be classified below the poverty line.”

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Rauf Aregbesola annual colloquium

Subsistence agriculture alone may never be able to sustain any household in Nigeria. This is according to Nigeria’s Statistician-General and CEO of the National Bureau of Statistics (NBS), Dr Yemi Kale, who spoke during the Rauf Aregbesola annual colloquium earlier today. The event had the theme Government Unusual: Innovative Economic Solutions to Unlock Mass Prosperity.

Using insights from the 2019 National Living Standards Survey, Dr Kale explained that households that are solely engaged in subsistence agriculture appear to have the highest levels of poverty. This set of families are followed by households with more than twenty members.

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“This doesn’t mean agriculture is a bad thing. It simply means the way we do agriculture in Nigeria has to be improved so that it does not become synonymous with poverty or we have to find other sources of income for farmers to supplement their standard of living,” he said.

Speaking further, Dr Kale explained that the living standards survey, which was conducted in collaboration with the World Bank, started in late 2018 and ended in 2019. The survey utilized data from all states in Nigeria except Borno whose data was not considered credible enough given the security situation in the state. Kale said:

“We established the poverty line at N137,430 and any individual or family that spends below this on food in a year will be classified below the poverty line.”

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Given this yardstick, the survey established that at least 22.9 million Nigerians are living in poverty, with the bulk of this number coming from the rural areas and states with low indices on education, social welfare initiatives, employment, and income equality.

Formalising the informal sector

The informal sector comprises people who earn enough to keep above the poverty line on a daily basis, but not enough to sustain them in the event of a lockdown, as was seen recently in some states during the April COVID-19 lockdown. This is a problem that can only be solved if the informal sector becomes formalised, Kale said. In other words, formalizing this sector will help more daily wage earners stay above the poverty line. He made reference to the recent lockdown which incapacitated lots of daily wage earners in states such as Lagos.

Nigeria’s poor versus other African countries

Making a comparison, Yale also noted that Nigeria’s poor are poorer than their counterparts in South Africa despite the fact that the nominal size of Nigeria’s economy is much larger.

He attributed this to findings which showed that Nigerians spend three times more on foods and consumables than all other items put together, as against countries like South Africa and Egypt where less is spent on food items.

“Nigerian remains Africa’s largest economy, but per capita income is rather low for a country of this size, and the level of poverty presents a major development challenge” he noted.

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Reducing unemployment – the fastest way out

According to Kale, the fastest way out of poverty is to reduce unemployment, as people will naturally have more to spend on their needs when they are employed. To support his point, Kalu cited five Nigerian states with the least poor people in comparison to the other states Lagos, Delta, Ogun, Osun, and Oyo. Each of these states has fewer unemployment levels compared to the states with higher poverty rates such as Sokoto, Taraba, Jigawa, Ebonyi, and Adamawa states.

Patricia

Other indicators which show similar trends across the states are education, and ease of doing business. The poverty rates are almost always higher where education is poor.

Increasing local production

Also making a presentation during the colloquium, Dr Joe Abah called for a review of the 1978 land use act which he said is limiting in its provisions. He also stressed that Nigeria needs to improve access to capital, raw materials, lands, and technological innovations so that production capacity can increase significantly.

“All of the richer countries simply produce more, and they produce more things that people want to buy and want to consume. It could be products or services. the higher your production capacity, the richer you are. if you cannot produce, you cannot develop your education or your health sector.”

According to Abah, the cost of governance cannot be reduced without adopting some of the suggestions of the Oronsaye report, and restructuring the system for productivity. He said that “there is also a need to link budget and funding to productivity so that public sectors begin to understand that the more funding they require, the more they are expected to produce as well.”

He also suggested that states should start focusing on their competitive advantage and use same to improve general productivity in their state.

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Other panelists at the colloquium include Mallam Nasir El-Rufai, Governor, Kaduna State, Sen. Abubakar Bagudu, Governor, Kebbi State, Mrs. Hajara Adeola, CEO, Lotus Capital Limited, Mr. Bismarck Rewane, CEO, Financial Derivatives Limited, Dr. Joe Abah, Country Director, DAI, Dr. Yemi Cardoso, Chairman, Citibank Nigeria, with Boason Omofaye as the moderator.

You may watch the colloquium by clicking here.

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Economy & Politics

Output cut: Nigeria leads in OPEC non-compliance with 50 unsold cargoes of crude

Nigeria and Iraq were reported not to have kept to their commitment to the huge production cut deal that had promised to reduce output by 9.7 million barrels of crude oil per day.

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Petroleum Industry Bill to be passed by mid-2020, says Sylva, FG discovers crude oil in north, says there’s more , OPEC, non-OPEC countries to meet as Saudi, Russia price war affects Nigeria’s budget, FG considers fuel price reduction, OPEC deal: Nigeria to generate additional $2.8 billion revenue as FG reacts

As opinions continue to differ on whether OPEC will extend its current oil output cut beyond June, available information has shown that not all members of the oil cartel complied fully with their agreed quotas for the month of May. This is despite the fact that the oil output by OPEC member countries reached its lowest in almost 20 years.

Available data from oilprice.com showed that OPEC members cut their output by 5.91 million barrels per day from the April level, producing 24.77 million barrels per day. This figure also showed a 4.48 million barrel per day of the agreed output cut, thereby representing a 74% compliance level.

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Nigeria and Iraq were reported not to have kept to their commitment to the huge production cut deal that had promised to reduce output by 9.7 million barrels of crude oil per day.

Iraq was able to achieve just 38% compliance of its agreed output cut for the month of May, while Nigeria, which achieved a much lower compliance of the agreed output cut, recorded 19% compliance of what was agreed. Saudi Arabia showed the highest compliance, recording 96% of the agreed output cut.

Some have attributed the noncompliance of some members of OPEC to the agreed output cut, to the contractual obligations and commitment to buyers, given the short timeframe between when the agreement for the output cut was made and its implementation.

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Meanwhile oil exports from Angola and Congo remained steady at high prices on Friday, while Nigerian oil fared lower amid huge inventory of unsold cargoes.

Nigeria continues to face some difficulty in the oil market, primarily due to sluggish demand from Europe; it has around 50 unsold cargoes of crude oil yet to be sold for the months of June and July.

Meanwhile, India has become one of the few buyers for the Nigerian oil. Indian oil firms bought about 5-6 million barrels of Nigerian crude oil last week and has bought about 2 million barrels as at Thursday this week.

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Business News

President Muhammadu Buhari reshuffles NNPC’s board of directors

Note that the former board included the late Chief of Staff to the President, Abba Kyari as a member. Stakeholders have since expected the President to reconstitute a new board to take over.

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President Muhammadu Buhari to address Nigerians on Monday, receives update and recommendations from PTF

President Muhammadu Buhari has approved the reconstitution of the board of the Nigerian National Petroleum Corporation (NNPC) after the expiration of the tenure of the current board.

The newly constituted board members are expected to serve for a tenure of three years, effective immediately. They will take over from the last board, whose 3-year tenure officially ended in 2019. Information about this development is contained in a State House press release that was published on the official twitter handle of the Nigerian Presidency on Saturday morning.

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READ MORE: Construction of ICT Parks nudges Nigeria into digital transformation

READ ALSO: CBN and NIPOST open pilot microfinance branches

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The newly constituted NNPC board is made up of six members from each of the geo-political zones in the country. The members include the following individuals:

  • Mallam Mohammed Lawal, representing the North West
  • Dr Tajudeen Umar from North East
  • Adamu Mahmood  Attah from North Central
  • Senator Magnus Abe from the South-South
  • Dr Stephen Dike from the South East, and
  • Chief Pius Akinyelure from the South West geo-political

READ MORE: Boko Haram: A protracted battle yet to be won?  

Of the six members, three are returning members on the board – Chief Pius Akinyelure, Mallam Mohammed Lawal, and Dr Tajudeen Umar from North East.

Note that the constitution of the new board is considered a welcome development, as it balances the representation of the six geo-political zones on the board. The previous constitution of the board was faulted for not being “balanced”.

READ ALSO: Full text of President Muhammadu Buhari’s 58th Independence day broadcast

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Note that the former board included the late Chief of Staff to the President, Abba Kyari as a member. Stakeholders have since expected the President to reconstitute a new board to take over.

Patricia

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