NIGERIA UNEMPLOYMENT HIT 35% IN 2021 – AGUSTO & CO

Nigeria’s unemployment rate rose to 35 percent in 2021, according to a report by a credit rating agency, Agusto & Co. While the statistics office, the National Bureau of Statistics (NBS) is yet to publish the official labour data for the period, the 35 percent by Agusto & Co shows the jobless rate in Africa’s largest economy was up 6.06 percentage points from the 33.3 percent reported in 2020, when the impact of COVID-19 pandemic forced businesses to lay off staff.

At 35 percent, the highest in over a decade, the figure by the credit rating agency is below the 40 percent projected for 2021 by President Buhari’s current chief economic adviser, Doyin Salami. “Unemployment will continue to rise as school leavers join an economy that is weak at creating jobs,” research analysts at Augusto & Co., said.

“The sectors with significant growth use very little labour,” the Presidential Economic Advisory Council said at its sixth regular meeting. Analysis of the latest NBS unemployment report shows that a third of the 69.7 million-strong labour force in Africa’s most populous nation either did nothing or worked for less than 20 hours a week, making them unemployed in 2020. Another 15.9 million worked less than 40 hours a week, making them underemployed.

A high unemployment rate in a country like Nigeria whose economy is described as one that is stagflated (a blend of a high inflation rate and slow economic growth) means poor Nigerians will become poorer in real terms, and the middle class will get thinned out. Before COVID-19, about 80 million of Nigeria’s 200 million people were living on less than the equivalent of $1.90 a day. The pandemic and population growth could see that figure rise to almost 100 million by 2023, notes the World Bank.

Nigeria’s gross domestic product (GDP) may have shown sustained growth over the last four quarters since the exit from the 2020 recession as it grew by 4.03 percent in real terms in the third quarter of 2021, but the labour-intensive sectors that can help employ the country’s graduates have been underperforming, according to BusinessDay findings. Projecting that real GDP per person will remain below what was recorded in 2015, Agusto & Co. said real wages will continue to drop and unemployment will keep rising.

The Federal Government recently launched a plan to tackle Nigeria’s youth unemployment crisis, called the Nigerian Youth Employment Action Plan (NIYEAP 2021-2024). “The public sector lacks the capacity to create sufficient jobs. Their role is to create an enabling and supportive macroeconomic and policy environment that facilitates private sector development,” Damilola Adewale, a Lagos-based economic analyst said.

While the sectors of the Nigerian economy that require less labour have been growing at a pace faster than their peers, the labour-intensive sectors with the potential to reduce the country’s over a decade-high unemployment rate have either been in recession or growing at a sluggish rate.

Due to its labour-intensive nature, Nigeria’s manufacturing sector has been described as one that could help ease the country’s rising unemployment, but due to the harsh operating environment, the sector has continually performed below its potential.

While the impact of COVID-19 is easily blamed for the recent economic woes in Nigeria, an evaluation of the country’s macro-economic indicators before the pandemic exposes how the pandemic only made what was already a bad situation worse.

Nigeria retains a long list of economic reforms that can unlock economic growth and reduce poverty but have been stuck. Decrepit infrastructure and the lack of a functional rail system means Apapa, which houses Nigeria’s main post, remains a crying shame.

Read more at: https://businessday.ng/business-economy/article/nigeria-unemployment-hit-35-in-2021-agusto-co/

 

Author avatar
investor

Post a comment

Your email address will not be published.