The Nigeria’s 33.3% Unemployment Rate

The Nigeria’s 33.3% Unemployment Rate

Nigeria’s unemployment rose to 33.3% in the Q4 of 2020, according to data released by the Nigerian Bureau of statistics (NBS) on Monday.

The unemployment rate rose from 27.1% in the second quarter 2020 to reach the new height, putting the number of unemployed people in Nigeria at 23.19 million.

The NBS report said that while the unemployment rate rose by 6%, underemployment rate witnessed a decrease.

“During the reference period, the computed national unemployment rate from 27.1% in Q2, 2020 to 33.3% in Q4, 2020, while the underemployment rate decreased from 28.6% to 22.8%. A combination of both the unemployment and underemployment rate for the reference period gave a figure of 56.1%.

“This means that 33.3% of the labor force in Nigeria or 23,187,389 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 1,422,772 persons from the number in that category in Q2, 2020,” the report said.

The total number of people in employment (i.e., people with jobs) during the reference period was 46,488,079. Of this number, 30,572,440 were full-time employed (i.e., worked 40+ hours per week), while 15,915,639 were under-employed (i.e., working between 20-29 hours per week). This figure is 20.6% less than the people in employment in Q2, 2020.

The data highlight a significant rise in unemployment and underemployment among youths, urban and rural dwellers.

The unemployment rate among rural dwellers was 34.5%, up from 28.2% in Q2, 2020, while urban dwellers reported a rate of 31.3% up from 26.4%. In the case of underemployment among rural dwellers, it declined to 26.9% from 31.5%, while the rate among urban dwellers decreased to 16.2% from 23.2% in Q2, 2020.

For the period under review, Q4, 2020, the unemployment rate among young people (15-34years) was 42.5% up from 34.9%, while the rate of underemployment for the same age group declined to 21.0% from 28.2% in Q2, 2020. These rates were the highest when compared to other age groupings.

Under State disaggregation, Imo State reported the highest rate of unemployment with 56.6%, followed by Adamawa and Cross River States with 54.9% and 53.7% respectively. The State with the lowest rate was Osun in the South-West with 11.7%.

For underemployment, the state which recorded the highest rate was Benue with 43.5%, while Lagos State recorded the lowest underemployment rate, with 4.5% in Q4, 2020.

A total number of 12,160,178 did not do any work in the last 7 days preceding the survey, the NBS data said.

With these figures, Nigerian has surpassed South Africa and it’s running after Zambia’s 33.4%, which leads on Bloomberg’s list of 82 countries with rising unemployment rate.

Over the last five years, Nigeria’s labor market has recorded alarming figures of job loss, compounded recently by the decline in oil revenue and emergence of COVID-19, which forced many companies to downsize.

It has become more like a race for Africa’s largest economies. South Africa, which just like Nigeria, fell into recession last year, has 32.5 unemployment rate. Although the two countries share a common problem of insecurity and civil unrest stemming from the rising number of youths without jobs, Nigeria has further concern.

Inflation has been on the rise since August 2019, when the oil-rich nation closed its borders to enforce its food import ban. With inflation at 17.33%, food prices rose above 20% year-on-year in January, stoking the hunger crisis that president Buhari administration’s economic policies have failed to address.

Nigeria has an exploding population of more than 200 million people with over 40% living below the poverty line ($2 per day). The Q4, 2020 unemployment rate means additional 1,422,772 persons may likely be added to the growing number of people fighting extreme hunger in Nigeria.

Dependency has become a survival strategy for those not working. 148.7 million Nigerians are depending on 57.8 million who are working. This means, approximately, only 28% of the population is actually working, and on average, about three persons depend on one working Nigerian, according to data from StatiSense.

The International Monetary Fund said the recovery of Nigeria’s battered economy will be slow. With its current 1.5 growth rate, output will only recover to pre-pandemic levels in 2022, the IMF said.

Oil accounts for 90% of Nigeria’s GDP which plummeted as the oil market came under the weight of the pandemic. Although there has been recent signs of recovery with Brent Crude rising as high as $69 last week, its sustainability is not guaranteed as economies are yet to fully reopen.

With the current economic outlook, the number of people becoming jobless will increase, and with the food import ban and crisis in the north limiting farming activities, inflation will continue to rise as population growth outpaces output expansion.

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