Nigeria’s Unemployment Rate Hits 27.1%, and it May Get Worse

Nigeria’s Unemployment  Rate Hits 27.1%, and it May Get Worse

After 20 months, the Nigerian Bureau of Statistics (NBS) has published a report on Nigeria’s unemployment rate. According to the statistics, unemployment rose to 27.1 percent in the second quarter of the year, a four percent increase compared to the third quarter of 2018, when the data was last published.

NBS data on unemployment and underemployment showed that a significant number of Nigerians were out of work during the reference period.

“During the reference period, the computed national unemployment rate rose from 23.1% in Q3, 2018 to 27.1%, while the underemployment rate increased from 20.1% to hit 28.6%. A combination of both the unemployment and underemployment rate for the reference period gave a figure of 55.7%.

“This means that 27.1% of the labor force in Nigeria or 21,764,617 persons either did nothing or worked for less than 20 hours a week, making them unemployed by our definition in Nigeria. This is an additional 836,969 persons from the number in that category in Q3, 2018,” the report stated.

In the state category, Imo State recorded the highest unemployment rate while Anambra scored the lowest.

“In the case of unemployment by state, Imo State recorded the highest rate of unemployment with 48.7%. This was followed by Akwa Ibom with 45.2% and Rivers State with 43.7%. The states with the lowest rates were Anambra, Kwara and Sokoto with 13.1%, 13.9% respectively. In the case of underemployment, Bauchi State recorded the highest rate with 43%, followed by Yobe and Adamawa, both with 38.4%,” the report said.

Breaking it down

However, combining unemployment and underemployment, the state that recorded the higher rate was Imo with 75.1% followed by Kaduna with 72.8%. kwara and Oyo recorded the lowest of the combined rate, 34.2% and 34.5% respectively, the report added.

The youths have the largest share of the labor force and are the most affected by unemployment and underemployment. The number of people willing to work under the age bracket of 15-64 was estimated to be 80,291,893, which is 11.3% lower than it was in Q3 2018. Within this age range, those between 24 and 34 were highest with 23, 328,460 or 29.1%, indicating that only 68.7% of Nigeria’s economically active population is in the labor force as of Q2 2020.

Under educational status, the most impacted people are those whose status is below primary school level. They have an unemployment rate of 46.2%, followed by those with first degree and HND at 40.9%.

The report said those with vocational and commercial qualification have the lowest rate of unemployment at 17.9%.

Under age groupings, those between 15-24 years have the highest unemployment rate at 40.8% followed by those aged between 25-34, with 30.7%. Youth underemployment stood at 35.4% for the second quarter of 2020. Those aged between 55-64 recorded the highest rate of underemployment at 31.6%.

The gender groupings indicated that females are the most impacted with 31.6% rate while males recorded 22.95 during the reference period. Among rural dwellers, 31.5% rate of underemployment rate was recorded while urban dwellers recorded 23.2%.

While most Nigerians believe that the unemployment and underemployment rate is underreported, the increase has been attributed to COVID-19 pandemic that forced many companies to lay off workers, particularly in the second quarter of 2020.

But analysts said that Nigeria was already climbing high on the stairs of unemployment before the outbreak of the pandemic. Nigeria was emerging from a deep recession at the outbreak of coronavirus, which plummeted oil revenue and consequently, deflected the country’s GDP.

The oil market was plunged into crisis as industries were shut down following lockdown measures initiated by governments. The central bank of Nigeria was forced to devalue naira, coupled with existing multiple exchange rates in the country, many companies were forced to leave and many workers were laid off.

Against this backdrop, there is overwhelming concern that Nigeria’s economy will plunge into recession soon, which means, more job losses will be recorded in the last two quarters of the year.

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