The National Bureau of Statistics (NBS) has disclosed that a staggering 87% of Nigerians within the working age bracket, who do not have traditional salaried positions, have ventured into self-employment as of the third quarter of 2023.
This marks a marginal decrease from the 88% recorded in the second quarter of the same year. The data suggests a nuanced shift in the Nigerian labour market, with some self-employed individuals either transitioning to salaried roles or facing the unfortunate closure of their enterprises.
Additionally, the NBS report highlights a slight uptick in wage employment among working-age Nigerians, climbing to 12.7% in the third quarter from 12% in the preceding quarter.
This incremental rise reflects a modest but positive change in the employment landscape, indicating a slow but steady workforce absorption into more formal employment sectors.
The statistics underscore a critical aspect of Nigeria’s labour market dynamics, pointing to a robust inclination towards self-employment amid the challenges of securing salaried positions.
This trend not only reflects the entrepreneurial spirit prevalent among Nigerians but also underscores the need for targeted support and policies to nurture and sustain the self-employed sector, which plays a significant role in the nation’s economy.
Self-employment predominant among women and in rural areas
Delving deeper into the intricacies of Nigeria’s employment landscape, the Nigeria Labour Force Survey for Q3 2023, as reported by the NBS, presents a gendered perspective on employment trends.
It reveals that self-employment is notably more prevalent among women than men, shedding light on the gender dynamics within the Nigerian labour market.
This distinction underscores the pivotal role of women in the entrepreneurial fabric of the nation, often navigating the economic terrain through self-initiated ventures.
Furthermore, it emphasizes a significant geographical divide in employment patterns, with self-employment being markedly more common in rural areas compared to urban settings.
This trend is indicative of the economic realities that drive individuals in less urbanized regions to create employment opportunities, often in the absence of formal wage-paying jobs.
The report read:
- “In Q3 2023, 87.3% of employed Nigerians were primarily self-employed with the remaining 12.7% being primarily engaged as employees.
- “Disaggregation by sex, 90.5% of women were engaged as self-employed while 84.2% of men were self-employed. 80.3% of employed people in urban areas were self-employed this is lower when compared with 94.5% of employed people in rural areas.”
High Informal Employment in Nigeria
The NBS report for Q3 2023 brings to light another critical aspect of Nigeria’s labour market: the exceptionally high rate of informal employment, which starkly contrasts with the employment structures in developed countries.
With a staggering 92.3% of the workforce engaged in informal employment, the findings underscore a significant reliance on non-formalized job sectors that often lack the security and benefits associated with formal employment.
Notably, the gender disparity within the informal sector leans heavily towards women, who are disproportionately represented in informal employment compared to their male counterparts.
This trend not only highlights the gendered nature of employment in Nigeria but also raises concerns about the economic vulnerabilities faced by women, who may have limited access to social protections and labour rights prevalent in formal employment settings.
Geographically, the prevalence of informal employment is significantly higher in rural areas, where the formal job market is less accessible or developed.
This scenario is further compounded for individuals without formal education, who are more likely to engage in informal jobs.
The lack of formal education among a substantial portion of the rural workforce limits their employment opportunities to informal sectors, which, while providing livelihoods, may also perpetuate cycles of poverty and hinder economic mobility.
The report read:
- “Informal employment in Nigeria and other developing countries seems to be very high when compared to the developed countries.
- “The share of employed persons in informal employment was 92.3% in Q3 2023 a reduction of 0.4% when compared to 92.7% in the previous quarter. The rate of women in informal employment is significantly higher than that of men.
- “The rate of informal employment among people living in rural areas was 97.2% while the urban informality rate was estimated at 87.5%. Females are more likely to be in informal employment than males.”
More Insights
- Nigeria’s unemployment rate witnessed a slight uptick in the third quarter of 2023, moving from 4.2% to 5%. This change represents a modest increase of 0.8% compared to the second quarter, signalling subtle shifts in the nation’s employment dynamics.
- Also, there is the escalating issue of rural unemployment, which has been exacerbated by insecurity issues plaguing farming regions across the country.
- The disruption in these agricultural heartlands not only affects food production and local economies but also significantly impacts employment opportunities for rural populations.
- As insecurity detaches individuals from their primary source of livelihood, the ripple effects extend beyond immediate economic losses to long-term employment and social stability concerns.