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It has been estimated that Nigeria’s unemployment rate will rise to 40.6 per cent this year. This is obtained from the latest unemployment figures released by KPMG, a global professional group that provides audit, tax and advisory services. In its report, ‘Global Economic Outlook’, the KPMG said unemployment in Nigeria will remain a major problem due to limited investment in the economy, low industrialisation and sluggish economic activity.
The inability of the economy to absorb the over five million young school leavers yearly into the labour market will contribute to the problem. As a result of scarcity of funds, the manufacturing sector will not do well. The KPMG’s unemployment forecast tallies with that by the National Bureau of Statistics (NBS). Nigeria’s unemployment rate rose from 23.1 per cent in 2018 to 33.3 per cent in 2020.
The KPMG report has also projected that Nigeria’s Gross Domestic Product (GDP) will grow at a slow pace this year, below the present estimated three per cent due to the political transition, a slowdown in global economy and lack of adequate trade and financial inflows in the economy. The projected rise in employment is hardly surprising considering the poor economic growth.
The causative factors, which are glaring include the inability of the economy to provide jobs for new entrants into the labour market, while fewer jobs are created. The rising unemployment is further fueled by corruption, favouritism and nepotism in both the private and public sectors. According to the National Statistics Institute (ISTAT), women were more affected than men. About 326,000 women reportedly lost their jobs annually, compared to 141,000 men.
The KPMG has also projection that the incoming administration will face challenging environment characterised by fragile and sluggish economic growth, including the volatile foreign exchange market. The World Bank says that the incoming government will face multiple challenges, in both short and long-terms. This includes the planned subsidy removal, growing poverty and others. Although the World Bank has approved for Nigeria $800 million as palliatives for the planned subsidy removal, it is not clear how the government will manage the money, which it says will target 50 million Nigerians.
We think that the palliative for subsidy removal will target more Nigerians than the government is proposing. The International Labour Organisation (ILO) says that the global unemployment will rise as high as 208 million at the end of this year. It also predicted that unemployment rate in Nigeria will likely worsen this year among the youths, as well as an increase in poverty and inequality. These will affect national security if not urgently addressed. In view of the unfavourable global economic outlook, ILO opines that many workers around the world will most likely accept lower paying jobs, sometimes with insufficient hours. According to it, millions of Nigerians and citizens of other sub-Saharan countries will experience job losses this year.
Let all tiers of government design concrete measures to create more jobs. President Muhammadu Buhari had in 2019 promised to lift 10 million Nigerians out of poverty annually. The promise was far from delivered, as millions of Nigerians have been caught up in the poverty and unemployment trap.
The President of African Development Bank (AfDB) Dr. Akinwumi Adesina, last year lamented the high rate of unemployment in the country. He put the figure of unemployed youths at 40 per cent. Available records show that unemployment among young Nigerians (15-34 years) is the highest in the country, with 21.72 million or 42.5 per cent of the estimated 29.94 young Nigerians in the labour market.
Currently, Nigeria has the highest youth population in Africa. According to the 2016 Global Youth Development Index, Nigeria is ranked 158th out of 183 countries in the area of employment opportunities. If this is not addressed, it is estimated that 135 million of active population may be jobless by 2025.
This is based on the annual population growth rate of four per cent, which outpaces economic growth rate of under three per cent. Unemployed graduates can set up new businesses, with access to loans at low interest rates. By creating new businesses and job opportunities entrepreneurship can help drive the economy. According to the AfDB President, the Bank in 2020 approved $170 million for Nigeria to support government’s programme that will expand digital and creative industry. The government must use the fund judiciously. The incoming government must revamp the economy and create more jobs for millions of unemployed Nigerians.
