Nigeria’s unemployment rate in the first quarter of 2024 rose to 5.3%, a slight increase of 0.3 percentage points from the 5.0% recorded in the third quarter of 2023, according to the National Bureau of Statistics (NBS) survey for Q1 2024.
This uptick highlights ongoing challenges within the country’s labor market, which has struggled with structural issues, inflation, and the impact of economic reforms.
Gender and Location Breakdown
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The NBS report revealed that male unemployment was lower at 4.3%, while females faced a higher unemployment rate of 6.2%, underlining the persistent gender disparity in Nigeria’s labor market.
Regionally, the survey showed that urban areas experienced a higher unemployment rate of 6.0%, compared to rural areas, which had a lower rate of 4.3%. The contrasting unemployment figures between urban and rural locations are indicative of the differences in job availability, economic opportunities, and labor dynamics across the country.
Youth and Educational Attainment
One of the notable trends from the report is the slight drop in youth unemployment, which declined to 8.4% in Q1 2024 from 8.6% in Q3 2023. Youth unemployment remains a major concern, given that Nigeria has one of the largest youth populations globally.
When the unemployment rate was assessed based on educational attainment, individuals with higher levels of education fared better in the labor market. Post-graduates had the lowest unemployment rate at 2.0%, while individuals with post-secondary education faced a rate of 9.0%. Those with secondary education had a 6.9% unemployment rate, while those with only primary education experienced a lower rate of 4.0%.
Labor Force Participation and Employment-to-Population Ratio
In terms of labor force participation, the NBS reported a rate of 77.3% for Q1 2024. This reflects the percentage of working-age Nigerians who are either employed or actively seeking employment. Notably, rural areas had a significantly higher participation rate at 82.5%, compared to 74.0% in urban centers. This rural-urban divide may stem from the fact that many rural Nigerians engage in informal or subsistence work, which drives up participation rates in these areas.
The employment-to-population ratio, which measures the proportion of the working-age population that is employed, dropped to 73.2% in Q1 2024, down from 75.6% in Q3 2023. For males, the ratio stood at 74.2%, while females had a slightly lower ratio at 72.3%. Rural areas had a higher employment rate at 78.9%, compared to 69.5% in urban regions. Both urban and rural employment rates experienced declines from the previous quarter.
Self-Employment and Shifts in Employment Patterns
Self-employment continues to dominate Nigeria’s labor market, though the proportion of self-employed individuals fell from 86% in Q1 2023 to 84% in Q1 2024. This decline may reflect a slow but growing shift toward more formal employment structures as the proportion of employed persons working as employees rose from 12.7% in Q3 2023 to 16.0% in Q1 2024.
However, self-employment remains particularly high among women, with a rate of 87.9% compared to 79.9% for men. Similarly, self-employment was more prevalent in rural areas (91.9%) than in urban centers (78.2%), a pattern that aligns with the predominance of informal and agricultural work in rural Nigeria.
Underemployment and Discouraged Job Seekers
A positive trend highlighted in the report is the decline in underemployment, which dropped to 10.9% in Q1 2024, down from 12.3% in Q3 2023. The NBS defines underemployment as individuals who work less than 40 hours a week but are willing and available to work more hours. This decrease suggests an improvement in the availability of more stable and full-time jobs in some sectors.
The underemployment rate was higher among women (12.5%) compared to men (8.5%), and it also remained elevated in rural areas (11.8%) relative to urban centers (9.7%). The prevalence of underemployment, particularly in rural regions, highlights the challenges many Nigerians face in securing adequately compensated and sufficient work, especially in informal and subsistence-driven economies.
The report also noted a growing number of discouraged job seekers, those who have stopped actively seeking employment. This figure rose from 3.1% in Q3 2023 to 3.6% in Q1 2024, with a rate of 3.4% for males and 3.8% for females. The increase in discouraged workers is concerning, as it points to a deepening sense of frustration and hopelessness among segments of the workforce, especially in the face of limited job opportunities.
A Mirror of Challenging Economy
The rise in unemployment and underemployment, coupled with the challenges in labor force participation, reflect Nigeria’s broader economic struggles. High inflation, fiscal imbalances, and a volatile business environment continue to hamper job creation, despite various government initiatives aimed at addressing unemployment. Additionally, structural issues such as poor infrastructure, weak industrial output, and volatile exchange markets, have stifled economic growth and employment opportunities.
The informal sector still dominates Nigeria’s economy, and while self-employment offers a lifeline for many, it is often characterized by low productivity and vulnerability to economic shocks. The country’s ongoing reforms, aimed at improving the business climate, increasing foreign investment, and boosting local production, are expected to address the long-term employment challenges.
Economists note that the modest improvements in employment metrics, such as the drop in underemployment, offer some hope, but the overall picture underscores the need for comprehensive policies that address both immediate labor market challenges and the structural issues stifling Nigeria’s economic potential.