About 88% of working-age Nigerians, who have no salary-paying jobs, are self-employed in the second quarter of 2023, according to the latest data from the National Bureau of Statistics (NBS).
The figure is slightly higher than the 86% recorded in Q1 of the same year, suggesting that ordinary Nigerians had to create jobs for themselves to wade through the rising economic challenges.
The data also shows that only about 12% of working-age Nigerians were engaged in wage employment in the second quarter of 2023, which is a slight improvement from 11.8% in the previous quarter.
According to the asksource.info site, wage employment includes any salaried or paid job under contract (written or not) to another person, organisation, or enterprise in both the formal and informal economies.
Self-employment predominant among women and in rural areas
The Nigeria Labour Force Survey for Q2 2023 report by the NBS further showed that about 91% of employed women are self-employed while for men, it is 85.2%.
It also noted that self-employment is more common in rural areas.
The report read:
- “The aggregate status in employment comprises two broad categories; employees and the self-employed. Those working for pay in the form of salaries and wages in cash or in-kind, including paid apprentices, are referred to as employees. Own-account workers, contributing family workers, and employers are referred to as self-employed.
- “In Q2 2023, 88.0% of employed Nigerians were primarily self-employed with the remaining 12.0% being primarily engaged as employees. Disaggregation by sex, 85.2% of employed men were self-employed compared to 91.0% of employed women.
- “Disaggregation by location, 80.5% of employed people in urban areas were self-employed compared with 95.3% of employed people in rural areas.”
High Informal Employment in Nigeria
The NBS also stated that Nigeria has extremely high informal employment when compared to developed countries.
With informal employment at 92.7% by Q2 2023, there are more women employed informally.
Also, this type of employment is more common in rural areas, with people without formal education found doing more of informal jobs.
The report read:
- “Informal employment in Nigeria and other developing countries seems to be very high when compared to the developed countries. The rate of informal employment is the share of employed persons in the informal sector and informal employment. The informal employment rate in Q2 2023 was 92.7%.
- “Like the previous two quarters, the rate of women in informal employment is higher than that of men. Although the informality rate is high across all age groups, younger persons (15-24), and persons above 65 years were more informally employed.
- “The rate of informal employment among people living in rural areas is 97.3% while the urban informality rate is estimated at 88%.
- “Educational qualification seems to be negatively associated with informality as findings show that persons with higher qualifications are less likely to be in informal employment. 99.6% of people with no formal education were found to be in informal employment.”
More Insight
Nairametrics earlier reported that Nigeria’s unemployment rate in Q2 2023 experienced a marginal rise from 4.1% to 4.2%, indicating an increase of merely 0.1% when compared to Q1.
The NBS, August, published the Labour force report for Q4, 2022 and Q1 2023, revealing that unemployment dropped to 4.1% in Q1 2023. This is a huge drop from the 33% the statistics body reported in Q4 2020.
However, the improvement was due to changes in methodology rather than government efforts. In its Nigeria Labour Force Survey (4th Quarter 2022 and 1st Quarter 2023) report, the statistic body said it had enhanced its methodology of collecting labour market data through the Nigeria Labour Force Survey in line with International Labour Organisation guidelines.
The body said due to the changes and enhancements it made in its recent survey, it was impossible to do a direct comparison of its recently released results with the old ones.
- It explained that to count as employed, an individual must have worked for at least “one hour in the previous seven days – making them employed at work – or they must typically work for pay or profit, even if they did not do so in the previous seven days – making them employed, but temporarily absent. This approach follows the ILO standard.”
However, the NBS has been criticised for its new methodology, which critics claimed is not a true picture of reality in the country.
In April 2023, KPMG revealed that Nigeria’s unemployment rate increased to 37.7 per cent in 2022 and would further rise to 40.6 per cent because of the continuing inflow of job seekers into the job market. It said unemployment would continue to be a challenge because of slow economic growth and the inability of the economy to absorb the 4-5 million new entrants into the job market every year.
