Nigeria count cost of recession, four in ten people in the workforce are unemployed or underemployed -stats office
* 2018 GDP growth estimated at 2.1 pct -IMF
* Nigeria economy still dependent on oil industry
* Government efforts to diversify away from oil struggling
Abuja, Nigeria. Dec. 22, 2017 (AltAfrika)-Nigeria is counting the cost of recession . Though, it may be Africa’s biggest economy, but four out of every ten people in the country’s workforce were unemployed or underemployed by the end of September, the government statistics office said on Friday.
The regional power climbed out of its first recession in a quarter of a century in the second quarter, but economic growth remains sluggish. That has lead to a drought of work opportunities, contributing to a cycle of poverty that drives Nigeria’s yawning wealth inequality as well as social unrest.
“A return to economic growth provides an impetus to employment,” Nigeria’s National Bureau of Statistics (NBS) said in a report released on Friday.
“However, employment growth may lag, and unemployment rates worsen especially at the end of a recession and for many months after,” the stats office said, adding that it expects unemployment to peak in the fourth quarter of 2017.
By the end of September, Nigeria’s economically active or working population was 111.1 million people, said the NBS.
Unemployment has increased to 18.8 percent of that population from 16.2 percent at the end of June, it said.
The combined proportion of people unemployed or underemployed was 40 percent at the end of September, up from 37.2 percent by the end of June, said the NBS report.
Earlier this month, ratings agency Fitch cut its 2017 economic growth forecast for Nigeria to 1 percent from 1.5 percent.
The administration of President Muhammadu Buhari, who campaigned on vows to fix Nigeria’s economy, has struggled to follow through with plans to reduce the country’s dependence on oil.
Much of Nigeria’s recovery since the second quarter has been driven by crude production, which accounts for roughly two-thirds of government revenues, despite the government’s assertions they are investing in infrastructure and key industries such as agriculture to drive employment and boost growth.
Meanwhile, the International Monetary Fund, IMF says despite exiting recession, Nigeria economy remains vulnerable, the Fund said on Friday, after conducting a review of Africa’s largest economy.
The regional power climbed out of its first recession in a quarter of a century in the second quarter, but economic growth remains sluggish. That has contributed to a cycle of poverty that drives Nigeria’s yawning wealth inequality as well as social unrest.
“Overall growth is slowly picking up but recovery remains challenging,” the IMF said in a statement about the review.
Macroeconomic and structural reforms remain urgent to contain any vulnerability, it said.
“In the absence of new policies, the near-term outlook remains challenging,” the IMF said.
The IMF made broadly similar statements earlier this year, a sign that little progress had been made.
The administration of President Muhammadu Buhari, who campaigned on vows to fix Nigeria’s economy, has struggled to follow through with plans to reduce the country’s dependence on oil.
Much of Nigeria’s recovery since the second quarter has been driven by crude production, which accounts for roughly two-thirds of government revenues, despite the government’s assertions they are investing in infrastructure and key industries such as agriculture to drive employment and boost growth.
“Growth is expected to continue to pick up in 2018 to 2.1 percent, helped by the full year impact of greater availability of foreign exchange and higher oil production, but to stay relatively flat in the medium term,” said the IMF.
Low oil prices, security issues and a lack of policy all threaten the country’s economic recovery, the lender said.
