The National Bureau of Statistics (NBS) has reported a rise in Nigeria’s employment rate to 5.3%, with male unemployment at 4.3% and female unemployment higher at 6.2%, 9am News Nigeria reports. Urban areas are experiencing a higher rate of unemployment at 6.0%, compared to 4.3% in rural regions.
Analysts attribute the soaring unemployment levels to the collapse of many small and medium enterprises and the exit of multinational companies from Nigeria. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, explained that these shutdowns result from shifting consumer spending habits. Ike Ibeabuchi, another analyst, highlighted the significant impact of these closures on Nigeria’s economy, stating, “When companies shut down or exit a market, they go with their jobs, and the economy suffers.”
The Manufacturers Association of Nigeria (MAN) reported that 767 manufacturing firms shut down in 2023 alone, with 335 more facing distress. Multinational corporations like Sanofi-Aventis, GlaxoSmithKline, and Kimberly-Clark have halted operations in Nigeria, citing unfavorable business conditions.
Tobi Ehinmosan, a macroeconomic analyst at FBNQuest Capital, noted that energy costs and foreign exchange losses have forced many companies to downsize and implement cost-saving measures. Economist Samson Simon added that high interest rates and inflation have made it difficult for businesses to expand, further contributing to the economic crisis.
The NBS acknowledged that the exchange rate crisis has severely affected producers who rely on importing raw materials, leading to job cuts. Bloomberg recently ranked the naira among the worst-performing currencies globally, further compounding the challenges facing the economy.
Tunde Abidoye, a financial analyst at FBNQuest, warned that rising unemployment could slow economic growth as people reduce spending, exacerbating Nigeria’s economic woes.
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