Forecasts indicate that Nigeria’s Unemployment rate is moving closer to 40%

unemployment rate

The benefit of knowing the precise number of Nigerians without work following the COVID-19 outbreak has not been available to data users. The National Bureau of Statistics (NBS) published the most recent official data in the beginning of 2021. The data covered the final quarter of 2020, when COVID-19 was still having an impact on the economy.

Non-governmental organizations have been forced to estimate the figures for the past two years using macroeconomic information and the trend of the economy.

The Nigeria Economic Summit Group (NESG) estimated the country’s unemployment rate at 37% earlier in the year. The analysis stated that the services sector will drive economic growth, which falls short of the momentum needed to create major jobs and predicted the headcount of those living in poverty at 45% for the year.

Leading services firm KPMG predicted last week that this year’s jobless rate would have increased from 37.7% to 40.6 percent.

If the mean of the two major predictions is taken as given, the nation’s projected unemployment rate for the year may be set at 38.8%. KPMG emphasized how the current inflationary pressure has an effect on the economy’s ability to produce. The headline inflation rate reached a multi-decade high of 22.82 percent in February, and the KPMG research predicts that the trend will continue throughout the year.

The monetary policy rate (MPR), which is currently 18%, adds to the high interest burden on the supply-side economy. The real sector’s potential has been hampered by the inefficient power industry and excessive energy costs, among other factors.

Fearing that the performance would be poorer due to the increase in interest rates, the real estate sector left huge gaps in the GDP last year.

The good news is that in two months a new administration will take over. Thus, some economists are hopeful that measures to buck the macroeconomic trend and boost economic activity are already in place.

Alternatively, the constrained climate might push the economy into a tailspin and threaten additional employment. The unemployment rate in the nation increased slightly from 23.1% in 2018 to 33.3% towards the end of 2020.

In the two years since the data were not made public, the figure increased by nearly 10 percentage points. Dr. Muda Yusuf of the Centre for Promotion of Private Enterprise (CPPE) predicted that the employment outlook would be worse than it was last year due to the recent naira redesign, which is said to have had a negative impact on more than 40 million small and medium-sized enterprises (SMEs), which account for the majority of jobs created in Nigeria.

The unemployment rate in Nigeria increased from 27.1% in Q2 2020 to 33.3% in Q4 2022. That was essentially the biggest number of unemployed people ever recorded in that nation. Only 30.57 million people were completely employed out of the estimated 69.67 million people in the labor force.

Since 2020, the NBS has not published any labor statistics. Nonetheless, this is anticipated to occur this year. The statistics agency recently stated that it is attempting to improve the Nigeria labor force survey’s methodology.

“We have started data collection using the new approach since the fourth quarter of the previous year, and we anticipate releasing national results quarterly and disaggregated state-level results by the end of the year,” the statement stated.

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