Job market faces challenges as unemployment rate climbs to 5% in Q3, 2023

…Informal Employment Rate soars to 92.3% — NBS

By Sodiq Adelakun

In a concerning economic development, Nigeria’s unemployment rate has witnessed a notable increase in the third quarter of 2023.

The National Bureau of Statistics (NBS) reported that the rate jumped by 0.8 percent, from 4.2 percent in the second quarter to 5.0% in the third.

The details were outlined in the ‘Nigeria Labour Force Survey Q3 2023,’ released on Monday by the NBS, which serves as the repository for the nation’s official statistics.

The report highlights a troubling shift in the employment landscape, with the employment-to-population ratio falling to 75.6 percent, a decline of 1.5  percent from the previous quarter.

Moreover, the broader measure of labor underutilization, which includes both unemployment and time-related underemployment, rose sharply.

The combined rate, known as LU2, escalated to 17.3 percent in the third quarter, up from 15.5 percent in the second quarter, signaling that a larger segment of the workforce is not being utilised to its full potential.

This uptick in unemployment is a significant concern for Africa’s largest economy, as it grapples with various socio-economic challenges, including inflation and reduced economic activity in certain sectors.

The government and policymakers are expected to respond to this latest indicator of economic distress with measures aimed at stimulating job creation and supporting the affected populations.

“About 87.3 percent of workers were self-employed in Q3 2023.

“The proportion of workers in Wage Employment in Q3 2023 was 12.7 percent.

“The unemployment rate increased significantly in Q3 2023 at 5.0 percent. This is an increase of 0.8 percent from Q2 2023.

“The rate of unemployment among persons with post-secondary education was 7.8 percent in Q3 2023,” part of the report read.

It added that the unemployment rate for youth between the ages of 15 and 24 years was recorded at 8.6 percent in Q3 2023 while the informal employment rate in Q3 2023 was 92.3 percent.

The report added, “The unemployment rate in urban areas was 6.0% in Q3 2023, a slight increase of 0.1 percent from Q2 2023.

“Time-related underemployment in Q3 2023 was 12.3 percent, showing a slight increase of 0.5 percent from the rate recorded in Q2 2023. This shows an increase of 1.4 percent compared to the rate in Q4 2022.

“4.1 percent of the working-age population was in subsistence agriculture in Q3 2023. Informal employment rate in Q3 2023 was 92.3 percent, while Q2 2023 was 92.7 percent.

“Percentage of youth Not in Employment, Education or Training was 13.7 percent in Q3 2023.”

Recall Nigeria’s inflation rate last Thursday climbed to 29.90 percent in January 2024 from 28.92 percent recorded in the previous month.

The 0.98 percent increase shows that the inflation rate in the country is yet to slow down.

The NBS revealed this in its ‘Consumer Price Index.’

The development adds more pressure on the Central Bank’s monetary policy committee to sharply raise interest rates at a February  26-27 meeting — its first in seven months.

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