The revised unemployment and underemployment data recently released by National Bureau of Statistics (NBS), revealed that Nigeria’s official unemployment rate remain unchanged at 23.1% as at Q3 2018 from initial figures communicated in December 2018. This represents an increase of 4.3% from 18.8% in Q3’ 17.
More details: The total number of unemployed persons also grew by 31% to 21 million people in Q3’18 from 16 million in Q3’17. However, underemployment rate (people in the labour force who are employed at less than full-time or regular jobs) improved to 20.1% in Q3 2018 from 21.2% in Q3 2017.
Rising unemployment Rate: Unemployment rate in Nigeria has been on the increase since the economic crisis in 2014, caused by the slump in oil prices. Although, it was expected that the return to economic growth in Q2 2017 following five consecutive quarters (Q1 2016-Q1 2017) of negative growth should provide an impetus to employment, the challenge has been that the growth in the economy has remained below the population growth. The GDP growth of 1.9% recorded in full year 2018 remained below the population growth of 2.6%.
Our perspective: In our view, we do not think the pace of recovery is strong enough to encourage businesses to raise their demand for labour. Consumers wallets on one hand still remains pressured owing to elevated costs of living while businesses continue to grapple with tough operating conditions.
For the Government to overcome the crisis of unemployment in Nigeria, there is the need for more auto centric and pro- growth policies geared towards attracting and improving private sector investment in critical sectors of the economy. Improvement of energy supply and the rehabilitation of the transportation system will also go along way in reducing the high cost of operation faced by businesses, allowing them to divert such resources devoted to energy cost to expansion of their labour force.
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