The International Labour Organisation (ILO) has projected that global unemployment will increase to 208 million at the end of this year. It is also predicted that unemployment rate in Nigeria will likely worsen this year, especially among the youths, as well as an increase in poverty and inequality. These issues will worsen national security if not urgently addressed. According to the ILO, the new data on global unemployment will mark a reversal of the decline in unemployment that was witnessed on a large scale between 2020 and 2022, following the outbreak of COVID-19 pandemic.
Due to the unfavourable global economic outlook, many workers around the world will most likely accept lower paying jobs, sometimes with insufficient hours. With rising prices of essential goods and services, the cost of living crisis will push more people into poverty. There will be a significant decline in income, comparable to what was witnessed during the COVID-19 pandemic era.
The government should evolve some measures to check the looming unemployment crisis. It can also provide the enabling environment for companies to create more jobs. According to econometric models, unemployment rate in Nigeria is projected to hit 45 per cent in 2023, and 43 per cent in 2024. It was 33 per cent in 2022, with youth unemployment at over 50 per cent. The Nigerian Economic Summit Group (NESG) says that unemployment rate for 2023 is projected at 37 per cent. Last year, the National Bureau of Statistics (NBS) revealed that about 133 million Nigerians were multi-dimensionally poor.
The ILO had in its January 2022 report warned that millions of Nigerians and other sub-Saharan countries would grapple with rising unemployment in 2023. For Nigeria, the UN agency stated that despite higher oil prices in the international market, the monetary tightening by the Central Bank of Nigeria (CBN) ostensibly to curb inflationary pressures, could overshoot and lead to higher levels of unemployment. Some experts also opine that the mismanagement of the naira redesign policy will exacerbate the problem.
Undoubtedly, unemployment in Nigeria has been on the upswing in recent years. Last year, the President of African Development Bank (AfDB), Dr. Akinwumi Adesina, decried the high rate of unemployment in the country, especially among Nigerian youths. He put the figure at 40 per cent of the youth population. His data was based on the statistics of second quarter (Q2) of 2020. But, figures from the National Bureau of Statistics (NBS) showed that youth unemployment increased to 53.40 per cent, up from 40.80 per cent as of Q2 of 2020. It had risen to about 50 per cent since 2022.
According to the latest NBS Labour Force Report, the 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 force unemployed, while the national unemployment rate stood at 35 per cent as of December 2020.
Currently, Nigeria has the highest youth population in Africa, where young people account for two-third of the country’s unemployed and underemployment. The 2016 Global Youth Development Index report said Nigeria ranked 158th out of 183 countries in the area of employment opportunities.
Available statistics from the Ministry of Labour and Employment show that a unique feature of the economic growth challenge in the country is the inability to create more jobs. If this problem is not addressed, it is estimated that 135 million of active population may be jobless in the nearest future. This is based on the annual population growth rate of four per cent, which outpaces economic growth rate of just two per cent.
Let there be pragmatic policies that will create incentives for jobless graduates to set up businesses, with access to loans at low interest rates. Digital technology is one area that youths have shown tremendous talent. The AfDB President said the Bank in 2020 approved $170 million for Nigeria to support government’s programme to expand digital and creative industry. It remains to be seen how this fund has been deployed for that purpose. It is expected that the incoming administration will open up the economy so that small and medium enterprises can thrive and create more jobs.