In the third quarter of 2023, Nigeria witnessed a rise in its unemployment rate to 5.0 percent from 4.2 per cent in the previous quarter, as per the latest Labour Force Survey released by the National Bureau of Statistics (NBS) on Monday.
This is as experts have charged the government at the federal and state levels to create a conducive business operating environment to tackle rising unemployment in the country.
The report highlighted a decline in the labour force participation rate among the working-age population to 79.5 per cent in Q3 compared to 80.4 per cent in Q2.
Nigeria had an unprecedented unemployment rate of 33.3 percent in Q4 2020. However, it saw a decline to 4.1 percent in Q1 2023, following a change in methodology by the NBS.
The NBS data that was released on Monday showed that the employment-to-population ratio stood at 75.6 per cent in Q3, indicating a decrease of 1.5 per cent compared to Q2. The combined rate of unemployment and time-related underemployment (LU2) rose to 17.3 percent in Q3 from 15.5 percent in Q2.
Self-employment accounted for about 87.3 per cent of workers in Q3, while the proportion of workers in Wage Employment was 12.7 per cent.
Unemployment among individuals with post-secondary education reached 7.8 per cent in Q3, while youth unemployment (aged 15-24 years) stood at 8.6 percent, marking a 1.4 percent increase compared to Q2.
In urban areas, the unemployment rate rose slightly to 6.0 percent in Q3, up by 0.1 percent from Q2.
“Time-related underemployment in Q3 increased slightly to 12.3 percent, up by 0.5 percent from Q2. The informal employment rate remained high at 92.3 percent in Q3, compared to 92.7 percent in Q2. The NEET Rate, representing the percentage of youth Not in Employment, Education, or Training, was recorded at 13.7 percent in Q3,” the report concluded.
Reacting to the unemployment data, the founder and chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf said: “the unemployment rate obviously is on the rise, and possibly much higher than what the new methodology of NBS is giving, because there has been a lot of controversy around the methodology.
“Out there, if you tell people that unemployment is five per cent, a lot of people will dispute that, because the whole essence of employment is for you to be able to make a living, even if it is only for yourself.”
Yusuf also said that, “but using the current methodology, I do not think the description of employment really will measure to what one expects when somebody is employed.”
According to him, what happens is that the unemployment situation can only be improved if we improve the environment in which businesses are operating, because it is businesses that actually create the jobs, particularly small businesses, and the big ones too are very important, but the small businesses create more jobs.
“But when the cost of operation and cost of logistics keep going up and particularly the inflationary environment, the foreign exchange environment, all of these things are making it difficult for new jobs to be created, and they are also making it difficult for existing jobs to be retained.”
He noted “the way out of this is to improve the macroeconomic environment so that more businesses will thrive, and the existing businesses will be able to retain and even employ more people.
“Then we need to address the issue of insecurity, because a lot of jobs are created in the agricultural sector as well. Insecurity is leading to loss of jobs in the agricultural sector, and worsening the social problems around the country.”
The Manufacturers Association of Nigeria (MAN) recently said, the rise in the Nigerian unemployment rate underscores the persistent harsh operating business environment for manufacturers which was occasioned by escalating energy cost as well as necessary but poorly coordinated subsidy and exchange rate reforms.
The national president of the Association of Small Business Owners of Nigeria (ASBON), Femi Egbesola said: “the reforms are impacting negatively on the micro, small and medium enterprises (MSMEs) and manufacturing sectors, leading to an increase in unemployment.”
He said the tough business environment has eroded the confidence of investors in the country, making some of them leave Africa’s biggest economy, saying that those who are expected to come as new investors are scared of coming, which is affecting the ability to new employment opportunities.
President of the council of Lagos Chamber of Commerce and Industry, Gabriel Idahosa stated that “a lot of businesses especially the small and medium scale ones are not doing well making them either layoff their staff or not hire people, pushing more into the unemployment market.”
Commenting on the latest unemployment figures released by the NBS, analysts at Comercio Partners stressed the need to work towards ensuring that the nation does not further sink into economic hardship.
In an emailed note, the analysts stated that the latest figure “necessitates a judicious approach to prevent exacerbating existing economic strains.
“The Monetary Policy Committee (MPC) confronts the task of assimilating the recent surge in unemployment within the framework of market expectations leaning towards an imminent adoption of a hawkish stance. Consequently, exercising patience and prudence by awaiting critical data points such as the forthcoming Q4 GDP results, slated for release on Thursday, emerges as a sensible strategy before delineating the trajectory for steering the economy,” they pointed out.
On his part, deputy general secretary, Nigeria Labour Congress (NLC), Comrade Chris Onyeka wondered how NBS got that figure in view of the glaring unemployment market in the country, adding that, the social unrest among youth speak volume of the unemployment in the country.
“As far as we are concerned, NBS’ unemployment rate is not in sync with the realities on the ground. The rate of unemployed in Nigeria was rebased by NBS to cover or disguise the damage neoliberal policies have wrought on the nation.”
According to him, “General unemployment is not less than 37 per cent in Nigeria while youth unemployment is around 67 per cent. The truth is that any data that is not a reflection of the reality on the ground, makes a mockery of itself and would not be taken seriously by stakeholders.
Onyeka furthermore said: “Western nations Led by the IMF & WB cannot be forcing certain unacceptable indices on us to cover the disaster that our economy has become. You could see the result of the high unemployment on the youth that are becoming restive and the social unrest including growing crimes all over the nation.”
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