Economic Indicators Highlight Persistent Challenges in Labour Market
The latest data from the National Bureau of Statistics (NBS) has once again highlighted Nigeria’s ongoing economic struggles, with youth unemployment and other key indicators showing little improvement. According to the Nigerian Economic Summit Group, the youth unemployment rate stood at 6.5 percent in the second quarter of 2024, marking the highest unemployment rate among Nigerians aged 15–24 and 25–34. This follows a more alarming 8.4 percent youth unemployment rate in Q1 2024, while the overall national unemployment rate was 4.3 percent in Q2 2024.
Unemployment, particularly among the youth, is a crucial measure of economic stability. A high youth unemployment rate suggests that young Nigerians are finding it increasingly difficult to secure jobs, which could have long-term consequences on productivity, social stability, and economic growth.
Slow Growth and High Inflation Projected for 2025
In a recent economic outlook report, the NBS projected that Nigeria’s real GDP growth in 2025 will be moderate, while inflation is expected to remain high, albeit easing slightly compared to 2024. Estimates place the average inflation rate between 31.81 percent (bull case) and 37.16 percent (bear case), depending on economic conditions.
Youth unemployment for 2025 is expected to hover around 6.5 percent, based on the latest Q2 2024 figures, while the overall unemployment rate is anticipated to remain at 4.3 percent.
Government’s Response and the Need for Urgent Action
The federal government has launched several initiatives aimed at reducing youth unemployment, including skills development programs and job creation schemes. However, analysts argue that these efforts have not been sufficient to reverse the trend, given the structural issues in the economy, such as slow industrial growth, weak private-sector investment, and a challenging business environment.
The persistent youth unemployment crisis has raised concerns about potential social unrest. Historical patterns in other nations, such as Sri Lanka, Chile, Ecuador, and Colombia, show that sustained high youth unemployment rates often lead to protests and political instability.
One such warning sign was seen in Nigeria’s nationwide protests on October 1, 2024, which called for urgent action on youth employment and economic reforms. In response, President Bola Tinubu proposed a 30-day youth conference to address the issue, but its implementation remains uncertain.
Education as a Long-Term Solution to Unemployment
Experts argue that a fundamental way to tackle unemployment and poverty is through education and skills development. The World Bank’s education strategy emphasizes that investment in education drives economic growth, enhances innovation, and improves social cohesion. The institution notes that globally, every extra year of schooling increases hourly earnings by 9 percent, underscoring the long-term benefits of education in addressing economic disparities.
While short-term government interventions are necessary, economic analysts stress that Nigeria needs a comprehensive national strategy to address youth unemployment. This includes revamping the education system, investing in vocational training, fostering entrepreneurship, and creating an enabling environment for businesses to thrive.
Conclusion
As Nigeria navigates its economic challenges, the government and private sector must take decisive action to prevent worsening youth unemployment. Without bold reforms, the country risks prolonged economic stagnation, increasing poverty, and potential social unrest.
The time for urgent intervention is now.