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Another Pick-up in Unemployment

Proshare

Tuesday, December 20, 2016 9:20 AM /FBNQuest Research

The latest unemployment/underemployment watch from the National Bureau of Statistics (NBS) reveals that the labour force (population of working age between the ages of 15 and 64) increased to 108 million in Q3 2016 from 106.7 million recorded in Q2.

At the same time, the unemployment rate accelerated to 13.9% from 13.3%. The recent International Labour Organisation (ILO) forecast of a global unemployment rate of 5.9% for both 2016 and 2017 implies that Nigeria’s unemployment rate of 13.9% is already significantly higher than average.

Within the labour force, 27.1 million people were either unemployed or underemployed, compared with 26.1 million in Q2 2016.

As for the 2534 age group (which falls under the youth population per the NBS definition), the unemployment rate increased to 15.0% in Q3 from 14.5% recorded in Q2. Additionally, the underemployment rate for the same category rose to 20.8% in Q3 from 20.5% over the same period.

Given that rural jobs are predominantly in agriculture, and are often seasonal, attention tends to focus on unemployment in urban areas, particularly white-collar positions in the formal economy.

To assist in reducing the unemployment rate, policymakers have flagged entrepreneurship as a solution. There are many gaps to be filled within Nigeria’s economy, opportunities for skilled graduates to develop their own small businesses.

However, Nigeria’s business climate is generally unfavorable, particularly for start-up firms including SMEs. Several bottlenecks obstruct business growth and expansion, which discourages graduates from venturing down the entrepreneurship route.

The FGN has set out to create three direct job creation and training schemes under its programme of social welfare intervention. The N-Power Teacher Corps initiative aims to engage 500,000 unemployed graduates for two years.

The targeted number amounts to 5% of the working population. There are concerns surrounding the next phase for the successful applicants once the stipulated time frame of two years elapses, given the high possibility that some of these candidates would then rejoin the ranks of the unemployed or underemployed.

Globally, the highest unemployment rates in data shown in this NBS report include Djibouti (54.0%) and Kenya (40.0%) while the lowest include Qatar (0.2%), Cambodia (0.5%) and Thailand (1.2%).

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