The federal government’s target of a $1trillion economy by 2030 is under threat as unemployment and underemployment rates worsen in the country.
While the nation’s tertiary schools continue to push thousands of graduates into the already saturated labour market, with majority unable to secure jobs, some companies are downsizing as a result of the harsh operating environment, thereby pushing more people into unemployment.
Similarly, some Nigerians in employment are underemployed as their wages or salaries are not enough for their monthly expenses, thereby leaving on loans to survive.
These two critical components, experts said could stand in the way of the government to realise a $1trillion economy.
Nigeria’s unemployment rate has seen fluctuations in recent time as metrics of unemployment continues to worsen income distribution and gross domestic product (GDP) growth of the country’s labour market conditions.
Unemployment, in the country, has reached a tipping point as it trickles down from various sectoral groups down to the informal sector with a comprehensive picture of poor labour participation, increased poverty levels, low purchasing power, widening capacity gaps and poor metrics of income distribution.
READ ALSO: Nigeria’s Unemployment Rate Rises To 4.3%
The National Bureau of Statistics (NBS) report of Q2 2024 indicated that the labour force participation rate stood at 79.5%, with rural areas recording 83.2% compared to 77.2% in urban areas. It revealed that minimal gender disparities were noted, with males at 79.9% and females at 79.1%, reflecting steady engagement across demographics.
The employment-to-population ratio actually increased to 76.1% in Q2 2024 from 73.1% in Q1 2024, with rural areas outperforming urban areas at 80.8% and 73.2%, respectively. However, this figure is not reflecting any major improvement in unemployment on the streets of Nigeria.
FG Must Sustain Environment Of Job Creation – CPPE DG
Commenting on this, the director for Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf said, in other to revive the amount of depleting jobs in the country, there’s need to sustain the environment for job retention.
The economist argued that, many forms of self-employment hardly count as meaningful employment as ongoing reforms have worsened their performance as he cited the real sector’s third-quarter Gross Domestic Product figures.
For the MSMEs, he said, many micro and small enterprises are struggling; that is, if they are still in business. “And if you also look at the GDP data – well, the GDP data ideally should reflect the economy’s health – the big sectors that typically generate jobs are slowing down.
“Agriculture just recorded 1.14 per cent GDP growth, manufacturing recorded less than 1 per cent (a 0.92 per cent GDP growth), trade where we have a lot of informal sector players recorded 0.65 per cent GDP growth. That’s less than 1 per cent.
“Real estate, another major source of employment, recorded 0.68 per cent. So generally, we are looking at key sectors that create jobs that are slowing down compared to last quarter. So, where are the jobs coming from?” he queried.
However, Yusuf urged the federal government and the private sector to consider how to create more jobs and a sustainable environment for job retention.
Small Businesses’ Owners Accuse Economic Managers Of Poor Performance
Similarly, the national president of Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola alluded that unemployment has caused poor labour participation with the downsizing of labour and exit of multinationals from the country.
He pointed out that the current state of the economy, characterised by struggling businesses and dwindling production, “unemployment is on the rise due to mothballing of factories closing down, dwindling production activity and low inventories of unsold goods due low consumer spending.”
He said the reality on ground paints a grimmer picture of economic misalignment and weak macroeconomic indications whereby there’s poor participation in the labour force causing business closures, rising cost and diminishing consumer spending.
The ASBON boss faulted the economic managers for not working to retool the economy by identifying the sectors that will drive job creation for Nigerians.
He also urged government to close the capacity and funding gaps for SMEs, by providing them with the needed funding structure to bolster the informal sector of the economy. He also encouraged manufacturers and industrialists to improve local sourcing through the local content drive and backwards integration, while positing that this will boost the availability of raw materials.
Egbesola said, Nigeria’s unemployment rate and harsh economic conditions, can result from several factors. He cited confluence of factors such as changes in growth in the informal sector Economic pressures have pushed more people into informal or subsistence work, such as trading, farming, or gig-based roles, which are now classified as metrics for employment.
‘Nigeria First’ Policy Will Bring Relief – Manufacturers
On his part, the director-general of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, described the federal government’s ‘Nigeria First’ policy directive as a long-awaited relief to the nation’s manufacturers, adding that, if well implemented, the policy would scale investments, and potentially boost GDP by 56 percent, reduce unemployment by 37 percent, and increase firms’ willingness to employ from 1.5 percent to 22.6 percent.
Ajayi-Kadir expressed the strong belief that the policy would have a multiplier effect on the economy, leading to increased economic activity and enhanced competitiveness of Nigerian industries.
He described the policy, aimed at prioritising patronage of locally made goods and services, as a demonstration of government’s commitment to promoting local industries, boosting economic growth, and creating jobs for Nigerians.
Meanwhile, the director-general of the Nigeria Employers’ Consultative Association (NECA), Mr Adewale-Smart Oyerinde, has expressed uncertainty over the planned jobs creation by federal government
To him, “Have you seen government policies on job creation working? Government policies on job creation in Nigeria have been varied over the years, and while some initiatives have had positive impacts, many have faced challenges in effectively reaching the youth or producing lasting results. There have been efforts at both the federal and state levels to address youth unemployment, but in many cases, the outcomes have not fully lived up to expectations.”
On his part, the secretary-general, Food, Beverage and Tobacco Senior Staff Association (FOBTOB), Comrade Solomon Adebosin, said, ‘If after two years, we are still promising, when will it be actualised?
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