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Economy Generated 187,226 Jobs in Q3



A man walks past job seekers as they fill out job applications for recruiters during a job fair in New York
  • Economy Generated 187,226 Jobs in Q3

The Nigerian economy added 187,226 new jobs in the third quarter of 2016 (Q3 2016), from 155,444 jobs in the previous quarter, the National Bureau of Statistics (NBS) has stated.

Also, labour productivity for the quarter rose to N713.7 per hour, compared to N636.3 per hour in the second quarter.

Notwithstanding the employment generation report, which was released alongside the labour productivity index by the NBS monday, the data came amid rising unemployment of 13.9 per cent during the quarter under review.

The NBS further stated that the economy needed to generate 2.6 million jobs annually to hold down the current unemployment rate, as the country’s labour force is estimated to grow at over 2.6 million per annum.

According to the job creation report, employment generation was insufficient to meet the ever-growing labour market, leading to the continuous rise in the level of unemployment in the country.

NBS said the huge number of unemployed was a reflection of the current economic realities, as only few businesses are growing and employing while many others are shedding jobs.

It further noted that both the public and private sectors are currently finding it difficult to create jobs due to the economic crisis, adding that most states are currently finding it difficult to pay the salaries of existing workers.

According to the NBS, “In the third quarter of 2016, the total number of jobs generated rose to 187,226, from the 155,444 generated in quarter two, representing an increase of 20.4 per cent quarter-on-quarter, but a decline of 60.6 per cent year-on-year.

“The formal sector recorded 49,587 jobs, representing a 26.5 per cent share of new jobs in quarter three while the informal sector recorded a larger share of new jobs, compared to the previous quarter, reporting a figure of 144,651 jobs and representing 77.3 per cent of new jobs in quarter three.

“The public sector again recorded a negative growth in employment, with a figure of -7,012 in quarter three. The reported negative growth in public sector job numbers over the last year has not been entirely surprising, as many state governments across the country have struggled to pay salaries, hence restricting the number of new intakes and in some instances placing a complete embargo on new employment into the public service.”

The report said despite negative economic growth, net jobs created were still positive in both the formal and informal sectors as more jobs were created despite job losses especially through informal low paying jobs.

On labour productivity for the quarter, the NBS said the overall level was low, compared to the same period last year as a result of several challenges that generally impacted on output and labour, and indirectly on labour productivity, which kept it below optimal levels.

It said: “Investment in the economy was still relatively low, though some government investments were recorded during the quarter, the volume of private investment and foreign direct investments was still considerably low compared to previous years.

“Power was relatively stable throughout the quarter, which partly accounted for the increase in labour productivity. Though there was a contraction in the economy in the third quarter in real terms accompanied by an increasing unemployment rate, the growth in labour productivity implies a gradual increase in labour efficiency employed in the economy.”

The labour productivity index also showed that the agriculture sector recorded a growth of 4.5 per cent, the highest among any major economic activity, as the third quarter was the harvest season in the Nigerian calendar.

The report added that other labour intensive sectors such as human health and social services, as well as accommodation and food services, also accounted for the most jobs created in Q3 2016.

Labour productivity refers to the quantity of manpower input required to produce a unit of output. High above productivity can be an important signal of the improvement in the real income (wages of workers).

Also, the manufacturing sector of the economy recorded an expansion in new orders in December after eleven months of contraction, the Purchasing Managers’ Index (PMI) report released by the Central Bank of Nigeria (CBN), has shown.

The new orders index stood at 45.1 points in November but increased to 51.8 points in the month under review, with five sub-sectors recording expansions in new orders.

The increase was reflective of increased demand for consumer goods during the yuletide season.

The sub-sectors that recorded increased orders last month were cement; food, beverage and tobacco products; textiles, apparel, leather and footwear; paper products; and fabricated metal products.

The plastics and rubber products sub-sector remained unchanged, while 10 sub-sectors recorded a decline in orders.

Notwithstanding, the manufacturing employment index in the month of December stood at 48.6 points, indicating a drop in employment for the twenty-second consecutive month.

However, the PMI showed a slowdown in contraction in manufacturing employment, compared to the preceding month.

The report stated: “Of the 16 sub-sectors, nine recorded a contraction in employment in the following order: computer and electronic products; electrical equipment; appliances and components; printing and related support activities; furniture and related products; chemical and pharmaceutical products; primary metals; fabricated metal products; and non-metallic mineral products.”

Nevertheless, the manufacturing raw materials inventory index indicated an expansion in raw materials inventory in December at 51.6 index points.

The manufacturing and non-manufacturing PMI report on businesses is based on data compiled from purchasing and supply executives.

Survey responses indicate whether there is a change or no change in the level of business activities in the current month compared with the previous month.

New orders for non-manufacturing showed a slowing contraction in December at 46.6 index points while the composite PMI for the non-manufacturing sector declined for the twelfth consecutive month.

The index stood at 47.1 points, indicating a slowing contraction, compared to the previous month.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Unemployment To Push More Nigerians Into Poverty – NESG



Nigerian Economic Summit Group- Investors King

On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.

The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.

It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.

“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.

“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”

The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.

“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.

According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.

The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.

It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”

According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.

It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.

“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.

“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”

The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.

It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.

“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.

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IMF Queries FG Strategies On Fuel Subsidy, Unemployment, Inflation



IMF - Investors King

The International Monetary Fund has raised the red flag over Nigeria’s resumption of petrol subsidy payments, describing it as injurious to the economy.

It also reiterated the importance of introducing a market-based fuel pricing mechanism and deployment of well-targeted social safety nets to cushion any adverse impact on the poor.

In a report produced after a virtual meeting with Nigerian authorities from June 1 to 8, the IMF also expressed concerns over the rising unemployment and inflation rates, even as it admitted that real Gross Domestic Product was recovering.

The IMF team, led by Jesmin Rahman, further hailed the Central Bank of Nigeria for its efforts at unifying the exchange rate by embracing needed reforms.

The Fund said: “Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.

“The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilisation.

“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.

“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.

“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.”

The IMF also recognised that tax revenue collections were gradually recovering but noted that with fuel subsidies resurfacing, additional spending for COVID-19 vaccines and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP.

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Nigeria-South Africa Trade Hits $2.9bn




The volume of trade between Nigeria and South Africa hit $2.9 billion last year with expectation of it rising further with the African Continental Free Trade Area (AfCFTA) agreement.

Nigeria’s Consul General, Malik Abdul, in a statement noted that Nigeria accounts for 64 per cent of South Africa’s trade in West Africa and is one of his country’s top three sources of crude oil.

He further added that in 2020, South Africa imported R35 billion ($2.48 billion) worth of goods, predominantly crude oil from Nigeria and exported R6 billion ($425milion) to Nigeria.

He stated: “South Africa is currently among the top 10 per cent of investors in Nigeria, globally and Nigeria is South Africa’s 10th biggest export market in Africa and thirty-second globally. Nigeria accounts for 64 per cent of South Africa’s trade with West Africa and is one of South Africa’s top three sources of crude oil.

“Also, Nigeria in 2020 was South Africa’s top import market in Africa and sixth globally, after China, Germany, USA, India and Saudi Arabia. Over the past year, South Africa imported $2.48 billion worth of goods predominantly crude oil from Nigeria and exported $425 million worth to Nigeria.”

Also, the consulate said his embassy issued a total of 10,341 passports to Nigerian citizens in South Africa between March 2020 and May 2021.

The consul general further said the Mission had 404 unclaimed passports, and advised all those whose passports were processed and pending from August 2020 to come for collection.

Abdul added that the consulate was working to clear all COVID-19 lockdown backlog of applications, urging members of the public to exercise patience while the mission was resolving the backlogs.

On the re-introduction of administrative fees and charges for lost passports, Abdul said that the step was taken to harmonise and standardise consular services following approval from the Ministry of Foreign Affairs, Abuja.

The Mission had increased the fees for lost passports from R1,500 to R2,000, and admin charges of R120 for data capturing.

“On this issue, the Mission could not unilaterally impose any charges without headquarters’ approval or consent.

“The admin fees of R120 pertains to all services rendered by the two Missions,” he said.
According to the Nigerian envoy, the decision was taken to remove disparities in all consular services, noting that visa fees have also been harmonised.

On penalty for lost passports, Abdul disclosed that 484 Nigerian passports were reported missing at the mission between August 2020 and May 2021 with request for re-issue.

Abdul said it was discovered that there were criminal undertones and immigration rules infractions associated with the ‘so-called’ lost passport declarations.

“In line with practice in other Missions, there was a need to impose fines to deter people from engaging in such infractions.

“At such an astronomical rate of loss declarations, the option will be to refer such losses to Nigeria for processing.

“This will save the booklet for genuine requests of re-issue and thereby reducing the backlog and pressure on the Mission,” the envoy said.

Abdul disclosed that the consulate had received a directive to embargo processing of lost passports pending further instructions from the headquarters.

The consul general then accused some Nigerian groups in South Africa of, “peddling lies and outright falsehoods” against the Mission and his person.

“These disgruntled elements have gone ahead to incite fellow Nigerians with intent to sabotage the Mission.

“Moreover, a lie and falsehoods often repeated amounts to a propaganda which can be misinterpreted by the gullible and undiscerning as truth,” he said.

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