Nigeria’s labor force participation rate rose to 79.5% in Q2 2024, according to the latest report of the Nigerian Bureau of Statistics (NBS).

This increase reflects an improving engagement among the working-age population, with near-equal participation rates for males (79.9%) and females (79.1%). The data suggests that gender disparities in workforce engagement are minimal, reflecting progress toward greater gender parity in labor force activities.

Employment rates also showed notable improvements. The employment-to-population ratio increased to 76.1% in Q2 2024, up from 73.1% in Q1. Rural areas led in employment, with a ratio of 80.8%, compared to 73.2% in urban areas. The gap highlights the significant role of agricultural and informal economic activities in rural communities, which remain the backbone of Nigeria’s economy.

For males, the employment-to-population ratio stood at 77.2%, while for females, it was 75%, indicating strong labor participation across genders.

However, the data reveals critical disparities in labor participation based on geography and disability. In rural areas, participation was significantly higher at 83.2%, compared to 77.2% in urban centers. The starkest contrast was observed between individuals with and without disabilities. Only 36.7% of persons with disabilities (PWDs) participated in labor activities, compared to 80% of those without disabilities.

Nigeria’s unemployment rate for Q2 2024 was reported at 4.3%, marking a slight increase from the 4.2% recorded in Q1 2024. Despite this marginal rise, significant differences emerged when analyzing the data by gender and location.

Unemployment among males stood at 3.4%, while females faced a higher rate of 5.1%. Similarly, urban areas recorded a higher unemployment rate of 5.2% compared to 2.8% in rural areas. Youth unemployment also showed improvement, declining from 8.4% in Q1 to 6.5% in Q2 2024, suggesting positive outcomes from initiatives aimed at engaging young Nigerians in economic activities.

The unemployment rate also varied by educational attainment. Individuals with post-secondary education had an unemployment rate of 4.8%, while those with upper secondary education faced a much higher rate of 8.5%. Those with lower secondary education and primary education experienced unemployment rates of 5.8% and 2.8%, respectively.

These figures are said to reflect a complex dynamic where higher educational qualifications do not necessarily translate to better employment prospects, particularly in an economy with limited opportunities in the formal sector.

Self-employment remains a dominant feature of Nigeria’s labor market, accounting for 85.6% of the employed population in Q2 2024. This reliance on self-employment reflects the informal sector’s overwhelming prevalence, often as a necessity rather than a choice.

Rural areas reported an even higher self-employment rate of 94.3%, compared to 79.7% in urban areas. Gender differences were also apparent, with 88.3% of employed females engaged in self-employment compared to 82.2% of males. The overall share of employed persons primarily engaged as formal employees declined from 16% in Q1 2023 to 14.4% in Q2 2024, underscoring a shrinking formal job market.

However, the NBS’s revised methodology for calculating unemployment, adopted in 2023, continues to face significant criticism. While the current figures align with some African countries, many Nigerians argue that they fail to reflect the country’s socioeconomic realities accurately.

Financial analyst Kalu Aja expressed strong criticism over the reported unemployment rate.

“How can anyone seriously and with good conscience say that the unemployment rate in Nigeria is 4%? This doesn’t reflect the struggles of the average Nigerian,” he said.

He further questioned whether NBS staff had considered the realities of unemployment faced by everyday Nigerians.

“Should the Brazilian beef packing company investing $2.5 billion assume only 4% of Nigerians are unemployed? This will guide their planning. And these are official numbers,” he said.

Critics have contended that the unemployment rate fails to account for widespread underemployment and the predominance of low-paying, informal jobs. For many Nigerians, being counted as “employed” under the NBS’s methodology often means engaging in survivalist economic activities that do not provide sufficient income, security, or benefits. This discrepancy paints a more optimistic picture of the labor market than the lived realities of many citizens.

Despite the reported gains in employment and labor participation, analysts believe that the prevalence of self-employment underscores structural weaknesses in Nigeria’s economy. They note that while self-employment can signal entrepreneurship and resilience, it often reflects a lack of formal job opportunities.

Many Nigerians are forced into informal work that offers little long-term stability or growth potential.

It is also noted that the disparities in labor participation and employment outcomes also highlight the need for targeted interventions to address geographic, gender, and ability-based inequalities.

As a solution to the unemployment crisis, many have advocated programs aimed at enhancing rural infrastructure, promoting urban job creation, and supporting PWDs, which could significantly improve labor market outcomes. Furthermore, the government has been urged to align educational programs with labor market demands, essential to bridging the gap between qualifications and job availability.

Nigeria’s public debt stock surged to an alarming N134.30 trillion in the second quarter of 2024, marking a sharp 10.38% increase from N121.67 trillion in the first quarter, according to the latest data from the Debt Management Office (DMO) published by the Nigerian Bureau of Statistics (NBS).

This rapid growth in debt reflects the mounting fiscal challenges facing the country amid dwindling oil revenues, rising global interest rates, and a depreciating naira.

The report highlighted that Nigeria’s external debt reached N63.07 trillion in Q2 2024, while domestic debt rose to N71.22 trillion. Domestic debt accounted for 53.04% of the total public debt, while external debt comprised 46.96%.

Lagos State topped the chart as the most indebted state domestically, with a staggering N885.99 billion, followed by Rivers State at N389.20 billion. At the other end of the spectrum, Jigawa and Ondo States recorded the lowest domestic debts of N1.82 billion and N15.10 billion, respectively.

On the external front, Lagos State again led with $1.20 billion, followed by Kaduna State at $640.99 million. Meanwhile, Yobe and the Federal Capital Territory (FCT) recorded the least external debts, with $20.49 million and $20.85 million, respectively.

Raising the Cost of Debt Servicing

The rising debt has significantly strained Nigeria’s finances. By August 2024, the cost of servicing external debt skyrocketed to N3.8 trillion, exceeding the budgeted N1.83 trillion for the entire year by an alarming N1.97 trillion. This dramatic overshoot reflects a 107.7% increase, largely driven by unfavorable exchange rates, rising global interest rates, and increased borrowing to meet fiscal shortfalls.

The total budget for debt servicing in 2024, including domestic and foreign debts, was set at N7.41 trillion. However, actual payments by August had already reached N5.51 trillion, accounting for 34.4% of the total budget. Domestic debt servicing costs also slightly surpassed the budgeted amount of N3.53 trillion, climbing to N3.6 trillion, an increase of N71 billion.

Declining Oil Revenues Fuel Borrowing

One of the major drivers of Nigeria’s rising debt profile is the shortfall in oil revenue. Oil and gas revenue for 2024 was projected at N20 trillion, but only N9.83 trillion was realized by August—a realization rate of 72.1%. After statutory deductions, net inflows to the Federation Account amounted to N8.5 trillion, falling short of prorated targets by 25.3%.

The underperformance in oil revenue is attributable to persistent challenges such as crude oil theft, production constraints, and global price volatility. These issues have undermined the government’s ability to capitalize on Nigeria’s natural resource wealth, forcing it to increasingly rely on borrowing to fund expenditures.

President Bola Tinubu’s administration is seeking additional loans to bridge the fiscal gap, including a $2.2 billion loan from the World Bank, recently approved by the Senate. While such borrowing may provide short-term relief, experts have warned that it would further compound the long-term challenge of debt sustainability.

The Lagos Chamber of Commerce and Industry (LCCI) said on Friday, that the growing debt profile, currently exceeding 50% of GDP, poses significant risks to economic stability.

“A critical perspective of further borrowing is the risk of losing steam on infrastructure financing as debt servicing alone may rise above what is set aside for capital expenditure in the 2025 federal budget.

“Another concern is the exposure to the external currency shocks that may result from the depreciation of the naira against the dollar in the course of servicing these accumulated debts,” Director-General of LCCI, Chinyere Almona, said in a statement.

Analysts have warned that with a significant portion of government revenue going towards debt repayment, critical investments in infrastructure, healthcare, and education are being sidelined. They note that the rising debt and the associated cost of servicing it pose significant risks to Nigeria’s economic stability.

It is also noted that the reliance on external borrowing exposes Nigeria to exchange rate risks. The naira’s depreciation against major currencies has amplified the cost of servicing foreign debt, further tightening fiscal space.

Experts have called for urgent reforms to reduce the debt burden. Measures include diversifying the economy to reduce dependence on oil revenues, improving tax collection, and curbing wasteful government expenditures.

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