PricewaterhouseCoopers says Nigeria’s unemployment rate can rise to 30 per cent by the last quarter of the year amid slow economic growth.
The consulting firm, in its September economic alert publication, estimated that unemployment could reach 28 per cent in third quarter from 27 per cent in second quarter of 2020.
Analysts at PwC led by the Partner and Chief Economist, Dr Andrew Nevin, noted that an estimated real Gross Domestic Product of about N280,000 was required to absorb a single employed person from Q2 2020 to Q4 2020 due to the economic effects of COVID-19.
According to him, the estimates were reached based on an assumption that the GDP would shrink by 5.4 per cent.
According to analysts, the labour force can grow to over 80 million while the number of employed persons will shrink by 2.14 million by Q4 2020.
A National Bureau of Statistics report had put Nigeria’s unemployment rate for Q2 2020 at 27 per cent, four percentage points higher than the 23 per cent reported in Q3 2018.
According to the survey, the underemployment rate was 29 per cent, which was higher than the 20 per cent recorded in Q3 2018.
When combined, the NBS said 52 per cent of the labour force was either without jobs or working below their potential.
PwC said some of the factors responsible for the rise in the unemployment and underemployment rates include the low level of industrialisation in the country, slow economic growth, low employability and quality of the labour force.
It added that slow implementation of the national labour policy, as well as lack of coordinating labour policies at the subnational level, were other factors.
The firm noted further that it was difficult to solve the high rate of unemployment in the country, noting that a commitment to the labour programmes contained in the National Economic Sustainability Plan (NESP) and the National Employment Policy was a start.
The Federal Government had unveiled the NESP which aimed to create five million jobs in the agriculture sector; 1.8 million jobs through mass housing strategy; 250,000 jobs through solar power strategy ad 774,000 jobs through the national public works programme.
It, however, said the labour programmes alone were not sufficient to absorb the huge number of unemployed Nigerians coupled with the new population that was expected to join the labour force in the coming years.
PwC said, “Fiscal labour initiatives can only complement economic reforms that promote industrialisation and the growth of MSMEs in reducing unemployment. Industrialisation and the entrepreneurial drive are crucial to solving the unemployment crisis in Nigeria.
“And again, both factors are preconditioned on the performance of the economy and government’s willingness to ease the process of doing business.”
The analysts suggested that improving the skills of the Nigeria labour force could reduce the unemployment rate.
They said such reforms should extend to the educational institutions in the country, targeting improvement in the quality of the curriculum, especially in the light of STEM and the fourth industrial revolution.