A recently released report by the global professional service firm, KPMG, has estimated Nigeria’s unemployment rate to top 40.6 percent in 2023 from 37.7 percent in the previous year. In the report titled “Global Economic Outlook,” the rate is expected to climb further. It was noted in the report that unemployment in Nigeria is expected to increase on the back of limited investment by the private sector, low industrialization and slower than required economic growth.
Former Statistician-General of the National Bureau of Statistics (NBS) (who is now Chief Economist at KPMG in Nigeria), Dr. Oyeyemi Kale, and Oluwole Adelokun (Associate Director of Strategy and Economics at KPMG in Nigeria) prepared the Nigerian section of the report. The section is titled, “Challenging macroeconomic fundamentals in a transition period.” Nigeria’s slow economic growth is driven by the non-oil sector, while the oil sector has contracted due to challenges such as oil theft, pipeline vandalization, and underinvestment.
Nigeria experiences slow economic growth as GDP growth estimated at 3%.
According to the report, the GDP growth rate was estimated at three percent in 2023. The rate is influenced by the slowdown in economic activity during periods of political transition. Nigeria’s real GDP grew by 3.52 percent year over year in the fourth quarter (Q4) 2022 compared to 2.25 percent recorded in the previous quarter, with an annual growth rate of 3.1 percent for the year against 3.4 percent in 2021. In 2022, growth was driven by the non-oil sector, as continuous recovery in household consumption boosted spending, particularly in the finance and insurance services, telecommunications, and transportation and storage services.
While the non-oil sector grew by 4.84 percent, the oil sector contracted by 19.22 percent, largely attributed to worsening oil theft, pipeline vandalization, underinvestment, and other operational challenges inhibiting oil production. Meanwhile, Nigeria’s unemployment has been trending upward over the years, reaching a record high of 33.3 percent in Q4 2020 according to the last NBS labor report, with over 23.1 million Nigerians out of jobs. This trend is expected to worsen in recent times considering the ripple effect from the COVID-19 pandemic, economic downturn, high inflation, and massive layoffs in the tech space, among others.
CBN raised monetary policy rate to combat inflation.
According to the report, “Unemployment is expected to continue to be a major challenge in 2023 due to the limited investment by the private sector, low industrialization and slower than required economic growth and consequently the inability of the economy to absorb the 4-5 million new entrants into the Nigerian job market every year.” Officially, the NBS recorded an increase in the national unemployment rate from 23.1 percent in 2018 to 33.3 percent in 2020.
Further highlights of the report show the impact of the high inflation environment on the economy, with projections of at least 20 percent in 2023. The KMPG report stated that annual inflation maintained its upward trend throughout 2022 and reached its highest levels in almost two decades and closing the year at 21.34 percent. Food inflation and core inflation has also grown by 23.75 percent and 18.49 percent respectively. To address the rising inflation, the Central Bank of Nigeria (CBN) raised the Monetary Policy Rate (MPR) by a cumulative 500 basis points in 2022 to 17.5 percent and increased the Cash Reserve Ratio (CRR) from 27.5 percent to 32.5 percent. Despite these measures, inflation has remained adamantly high and is predicted to remain above 20 percent in 2023 due to the persistence of the structural and policy issues.
Some insights from the NBS’s last official report.
Apart from the unemployment rates aforementioned, the last official report of the NBS also highlights some details. The total labor force was estimated at 69.67 million, with only 30.57 million fully employed citizens. Unemployed citizens were estimated at 15.9 million, and the total number of unemployed citizens was 23.19 million as of Q4 2020. The NBS has explained that the delay in the release of the report was due to the process involved in enhancing the methodology and implementation of the Nigeria labor force survey. According to the statistical agency, the result from the Q1 2023 Nigerian labor force survey employing the revised technique and approach is scheduled to be released in Q2.
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Nigeria’s unemployment estimated at 40.6%. – Low industrialization and slower economic growth listed as factors. – Express your point of view.
Nigeria’s increasing unemployment rate brings about several challenges that must be addressed by the government and other stakeholders. The government must implement policies that will create more jobs, improve the business environment to attract foreign investment, and provide better opportunities for vocational training and skill acquisition. Only then can we hope to tackle the unemployment crisis and build a more prosperous nation.
Our unemployment rate is always increasing drastically. We really need to do more. We should encourage our youths to take up entrepreneurial skills and sporting activities too. They really need to be empowered. Investing in human capital will yield a return in the capital development of the country.
Low industrialization and slower economic growth listed as factors. Unemployment is one of the major challenge of Nigeria since three decades. Government planning is very poor. They only concentrate on crude oil.
Our unemployment rate keep increasing we have to do something to it creating employment should be our priority so serve people well so they can mange their lives poor economy growth don’t make our country provide employment for the people
The level of unemployment rate in Nigeria now has become alarming and a signal to rise against the challenges. Nigerians are really suffering as the rate increases. People needs to wake up learn new skills and be self employed.
To my own view the stastic may not be correct,I expected it to me more than this because the rate at which people losses job and the japa syndrome, someone can say it should be more.
It’s sad that unemployment is rising in the country and we need to work on that becait is affecting the people’s lives and standards of living.
Lack of private sector investment is a major contributor to rising unemployment in Nigeria, which must be addressed if the country is ever to recover.
Investing in our young people’s entrepreneurial and athletic pursuits will pay dividends for the country’s economic growth and development.
The unemployment rate in Nigeria is ridiculous, but the rate is high because everyone wants to get white collar Job, and to be honest not everyone will get it, so people( youth especially) should learn other skills that can help them
What I felt is responsible for unemployment estimated at 40.6% is bad leadership. When the crops of people in government are more selfish than the need of the country it will result to we are seeing now. Of course,aside the Government not playing their role. the pandemic, inflation, constant terrorism attack especially in the north east and the Ukraine-Russian war were contributory factors to increase rate of unemployment. Except the Government realises the need to do the needful, there will still be pipeline vandalisation, theft, terrorism e.t.c. in the country which will continue to increase the level of unemployment in the land.
Low industrialization and slower economic growth are listed as factors responsible for the 40.6% unemployment rate in the country. The root cause of this is the mismanagement practice and selfish ambition that is not benefiting to the growth and development of the country exhibited by the Government. Nigeria have all it takes to standout as a nation but the deluded government who lack managerial skill are plundering the country to the state of no recovery. Oh! God help us.