Nigeria’s Unemployment Rises by 5% in Q3 2023 Due to Subsidy Removal

Nigeria witnessed a 5% increase in its unemployment rate during the third quarter of 2023, primarily attributed to a cost of living crisis in the aftermath of the government’s removal of a popular yet expensive petrol subsidy, as revealed by the latest report from the National Bureau of Statistics (NBS).

The country’s unemployment rate surged from 4.2% in the previous quarter. President Bola Tinubu defended two key reforms – the elimination of foreign exchange controls and subsidies – asserting that while these changes might cause short-term hardships, they are essential to attract investment and strengthen government finances.

According to the NBS report, the labor force participation rate in Nigeria was 79.5% in Q3 2023, down from 80.4% in Q2 2023. The unemployment rate increased to 5.0%, marking a rise of 0.8% from the second quarter. The employment-to-population ratio stood at 75.6% in Q3, witnessing a 1.5% decrease compared to Q2.

For the age group of 15 to 24, the unemployment rate increased from 7.2% to 8.6%, while urban unemployment saw a slight uptick from 5.9% to 6% in the previous quarter.

Notably, Nigeria, with over 200 million citizens, is Africa’s most populous country. However, decades of high unemployment have resulted from population growth outpacing economic expansion.

Despite a revision in the government’s methodology in early 2023 that led to a decline in the unemployment rate from a record 33% in Q4 2020, underemployment persists, with 87% of workers being self-employed.

The percentage of workers in the informal economy remained stable at 92.3%, while the workforce participation rate marginally decreased to 79.5% from 80.4% in Q2.

In addition to rising unemployment, Nigeria’s headline inflation rate reached 29.90% in January 2024, the highest level since mid-1996, according to data from the National Bureau of Statistics.

Correspondent

Correspondent

Leave a Reply

Your email address will not be published. Required fields are marked *