A Punch news report, citing data from the World of Statistics says Nigeria ranked number one on the list of countries with the highest rate of unemployment at 33.3%, followed by South Africa with 32.9%, and Iran with 15.55%. The lowest rate of unemployment, according to the report, were in countries like Qatar with 0.1% and Cambodia with 0.36%. Nigeria’s unemployment rate has been rising at a fast pace since 2015.
The last reported unemployment rate (Q4 2020) was 33.3%. Unemployment rate in Nigeria averaged 10.63% from 2006 until 2017, reaching a high of 19.70% in the fourth quarter of 2009 (the peak of the global financial crisis) and a record low of 5.10% in the fourth quarter of 2010 (the period of high oil prices). The former Statistician-General of the National Bureau of Statistics had linked the Bureau’s inability to release the unemployment data frequently to lack of funds.
An unemployment rate of 33.3% implied that one and out of every three Nigerians were out of job as of Q4 2020. The economic recession witnessed in 2015-17 had a major impact on Nigerian households, eroding their purchasing power and driving joblessness nationwide.
Although the exit from recession in Q2 2017 was expected to translate into improved consumer spending, following five consecutive quarters of negative growth, the pace of recovery was not strong enough to encourage businesses to raise their demand for labour.
Still stuttering from the hit of that recession, the onset of the global pandemic worsened the situation and drove the country into another recession in Q3 2020. Though unemployment figures haven’t been released since Q4 2020, what is certain is that conditions have worsened and we expect the numbers to have deteriorated significantly.
In our view, the government needs to urgently address the menace of rising prices and galloping unemployment. One of the factors that has been identified overtime as a major cause of unemployment is the absence of an enabling environment for businesses to thrive.
The spate of insecurity, rise in consumer prices, and a shrinking household income are major problems. The government needs to improve business conditions by completely ending insecurity, and improving primary infrastructure that would aid commerce. We also believe that improved private sector investment will be required to address the issue of unemployment.
Source CSL Research
