Posted Thu, Nov 28, 2024 9:58 AM

Nigeria’s unemployment rate bucks a rising streak in 2024Q2

The unemployment rate stood at 4.3 percent in the second quarter of 2024, reversing the rising trend in the previous three quarters. Similarly, the underemployment rate fell from 10.6 percent in 2024Q1 to 9.2 percent in 2024Q2. As expected, the unemployment rate was higher in urban centres than in rural settlements. Despite the decline in the unemployment rate, Nigeria’s misery index rose to 38.3 percent in 2024Q2 from 26.7 percent and 36.9 percent in 2023Q2 and 2024Q1, respectively. This suggests that many Nigerians are still experiencing a cost of living crisis, with more than half of the population living in poverty.

        Data: NBS; Chart: NESG Research

Moreover, persons with post-secondary education have a lower unemployment rate than those with only secondary education. This suggests that a negative correlation exists between human capital development and unemployment, reflecting the potency of higher education in unlocking job opportunities for labour market entrants. Meanwhile, unemployment is still prevalent among young people. Hence, labour market entrants, including youths and graduates, should be empowered with hands-on and soft skills that would enhance employability.

In addition, the formal sector accounts for only 7.0 percent of employment opportunities, and about 86 percent of Nigerians are engaged in self-employment and non-paid jobs. This suggests the need for the government at all levels to create an enabling environment to improve the ease of doing business in Nigeria for more businesses. A business-friendly climate could enhance the productivity of the informal sector players, and incentivise businesses to formalise and voluntarily remit taxes, thereby improving the country’s tax revenue collection.