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Nigeria’s Unemployment Rate Jumps to 23.1% in Q3

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  • Nigeria’s Unemployment Rate Jumps to 23.1% in Q3

The high unemployment rate in Nigeria has taken a new turn in the third quarter (Q3) of 2018 despite efforts by the current administration to enhance job creation and deepen growth.

The number of economically active people (between age 15-64) rose from 111.1 million in Q3 of 2017 to 115.5 million in Q3, 2018, according to a Labour Force Statistics released by the National Bureau of Statistics (NBS) on Wednesday.

The total number of people in the labour force, those who are able and willing to work, increased from 75.94 million in Q3 2015 to 80.66 in Q3 2016; 85.1 million in Q3 2017 and 90.5 million in Q3, 2018.

The total number of people with jobs rose from 68.4 million in Q3 2015, to 68.72 million in Q3 2016, to 69.09 million in Q3 2017 and 69.54 million in Q3 2018.

While the number of people in full-time employment, those working at least 40 hours a week, climbed from 51.1 million in the same quarter of 2017 to 51.3 million in Q3 2018.

The total number of people in part-time employment or underemployment, which decreased from 13.20 million in Q3 2015 to 11.19 million in Q3 2016, increased from 18,02 million filed in Q3 of 2017 to 18.21 million in the third quarter of 2018.

The total number of unemployed persons, those that did nothing at all or worked less than 20 hours a week rose from 17.6 million recorded in Q4 of 2017 to 20.9 million in Q3 2018.

However, out of the 20.9 million classified as unemployed, the NBS said 11.1 million of the number did some form of work but with far too few hours to be officially tagged employed. The remaining 9.7 million did nothing as 8.8 million of that number were first-time job seekers that have never worked before.

Therefore, putting the national unemployment rate at 23.1 percent in the third quarter of 2018, up from the 18.8 percent filed in Q3 2017.

Again, the combined number of unemployment and underemployment rates rose to 43.3 per cent in the quarter, a 3.3 per cent increase when compared to 40 per cent of Q3, 2017.

The youths unemployment rate declined slightly from 30.50 per cent in the second quarter of 2018 to 29.7 per cent in the third quarter. Still, higher than the 25.5 per cent filed in Q3, 2017. Youths underemployment stood at 25.7 per cent in Q3, 2018.

The combined number of youths either unemployed or underemployed rose to 55.4 per cent in the quarter, higher than the 52.6 per cent from the same period of 2017. Another indication of rising youth unemployment and underemployment when compared to the national combined rate of 43.3 per cent.

Despite six consecutive quarters of economic growth, Nigeria has failed to enhance new job creation and sustained old ones. A substantial number of the 9.7 million unemployed Nigerians said they were previously employed but lost their jobs due to harsh economic condition.

The economy grew at 1.81 per cent in the third quarter but that has failed to translate to job security or new job creation, not even numerous capital projects were able to absorb enough workers to ease growing unemployment rate.

Rising unemployment rate, falling forex reserves, high-interest rates, and weak consumer confidence in the economy are some of the factors impacting growth in recent months, and with the global oil price trading at $58 a barrel, far below the $86 attained in October, Nigeria may struggle even more in 2019 if global economy continued to slow amid protectionism.

President Buhari earlier today presented the 2019 proposed budget of N8.8 trillion to the joint session of the senate and house of representative. Again, funding remained a concern as national debt as already risen to over $73 billion.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Economy

South Africa’s Inflation Rate Holds Steady in May

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South Africa's economy - Investors King

South Africa’s inflation rate remained unchanged in May, increasing the likelihood that the central bank will maintain current borrowing costs.

According to a statement released by Statistics South Africa on Wednesday, consumer prices rose by 5.2% year-on-year, the same rate as in April.

The consistent inflation rate is expected to influence the decision of the six-member monetary policy committee (MPC), which is set to meet in mid-July. The current benchmark rate stands at 8.25%, a 15-year high, and has been held steady for six consecutive meetings.

Central Bank Governor Lesetja Kganyago has repeatedly emphasized the need for inflation to fall firmly within the 3% to 6% target range before considering any reduction in borrowing costs.

“We will continue to deliver on our mandate, irrespective of how our post-election politics plays out,” Kganyago stated earlier this month in Soweto. “The only impact is what kind of policies any coalition will propose. If the policies are not sustainable, we might not have investment.”

While money markets are assigning a slim chance of a 25-basis point rate cut in July, they are fully pricing in a reduction by November.

Bloomberg Africa economist Yvonne Mhango anticipates the rate-cutting cycle to begin in the fourth quarter, supported by a sharp drop in gasoline prices in June and a rally in the rand.

The rand has appreciated more than 3% since Friday, following the ANC’s agreement to a power-sharing deal with business-friendly opposition parties and the re-election of President Cyril Ramaphosa.

In May, the annual inflation rates for four of the twelve product groups remained stable, including food and non-alcoholic beverages.

However, transport, alcoholic beverages and tobacco, and recreation and culture saw higher rates. Food prices increased by 4.3% in May, slightly down from 4.4% in April, while transport costs rose by 6.3%, up from 5.7% and marking the highest rate for this category since October 2023.

The central bank’s cautious stance on monetary policy reflects its ongoing concerns about inflation.

Governor Kganyago has consistently voiced worries that the inflation rate is not decreasing as quickly as desired. The MPC’s upcoming decision will hinge on sustained inflationary pressures and the need to balance economic stability with fostering growth.

As South Africa navigates its economic challenges, the steady inflation rate in May provides a measure of predictability for policymakers and investors alike.

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Economy

Ghana Reports Strong 4.7% GDP Growth in First Quarter of 2024

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Ghana one cedi - Investors King

Ghana’s economy showed impressive growth in the first quarter of 2024 with the Gross Domestic Product (GDP) expanding by 4.7% compared to the same period last year, according to Government Statistician Samuel Kobina Annim.

This represents an increase from the 3.8% growth recorded in the previous quarter and should provide a much-needed boost to the ruling New Patriotic Party (NPP) as the nation approaches the presidential elections scheduled for December 7.

The positive economic data comes amidst a challenging backdrop of fiscal consolidation efforts under a $3 billion International Monetary Fund (IMF) rescue program.

The government has been working to control debt through reduced spending and restructuring nearly all of its $44 billion debt.

This includes ongoing negotiations with private creditors to reorganize $13 billion worth of bonds.

The latest GDP figures are seen as a vindication of the NPP’s economic policies, which have been under fire from the main opposition party, the National Democratic Congress (NDC).

The opposition has criticized the government’s handling of the economy, particularly its fiscal policies and the terms of the IMF program, arguing that they have imposed undue hardship on ordinary Ghanaians.

However, the 4.7% growth rate suggests that the measures taken to stabilize the economy are beginning to yield positive results.

Analysts believe that the stronger-than-expected economic performance will bolster the NPP’s position as the country gears up for the presidential elections.

“The growth we are seeing is a testament to the resilience of the Ghanaian economy and the effectiveness of the government’s policies,” Annim stated at a press briefing in Accra. “Despite the constraints imposed by the debt restructuring and IMF program, we are seeing significant progress.”

The IMF program, which is designed to restore macroeconomic stability, has necessitated tough fiscal adjustments.

These include cutting government expenditure and implementing structural reforms aimed at boosting economic efficiency and growth.

The government’s commitment to these reforms has been crucial in securing the confidence of international lenders and investors.

In addition to the IMF support, the government has also been focused on diversifying the economy, reducing its reliance on commodities, and fostering sectors such as manufacturing, services, and technology.

These efforts have contributed to the robust growth figures reported for the first quarter.

Economic growth in Ghana has been uneven in recent years, with periods of rapid expansion often followed by slowdowns.

The current administration has emphasized sustainable and inclusive growth, seeking to ensure that the benefits of economic progress are widely shared across all segments of the population.

The next few months will be critical as the government continues its efforts to stabilize the economy while preparing for the upcoming elections.

The positive GDP growth figures provide a strong foundation, but challenges remain, including managing inflation, creating jobs, and ensuring the stability of the financial sector.

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Economy

World Bank Commits Over $15 Billion to Support Nigeria’s Economic Reforms

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The World Bank has pledged over $15 billion in technical advisory and financial support to help the country achieve sustainable economic prosperity.

This commitment, announced in a feature article titled “Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms,” underscores the international lender’s confidence in Nigeria’s recent bold reforms aimed at stabilizing and growing its economy.

The World Bank’s support will be channeled into key sectors such as reliable power and clean energy, girls’ education and women’s economic empowerment, climate adaptation and resilience, water and sanitation, and governance reforms.

The bank lauded Nigeria’s government for its courageous steps in implementing much-needed reforms, highlighting the unification of multiple official exchange rates, which has led to a market-determined official rate, and the phasing out of the costly gasoline subsidy.

“These reforms are crucial for Nigeria’s long-term economic health,” the World Bank stated. “The supply of foreign exchange has improved, benefiting businesses and consumers, while the gap between official and parallel market exchange rates has narrowed, enhancing transparency and curbing corrupt practices.”

The removal of the gasoline subsidy, which had cost the country over 8.6 trillion naira (US$22.2 billion) from 2019 to 2022, was particularly noted for its potential to redirect fiscal resources toward more impactful public investments.

The World Bank pointed out that the subsidy primarily benefited wealthier consumers and fostered black market activities, rather than aiding the poor.

The bank’s article emphasized that Nigeria is at a turning point, with macro-fiscal reforms expected to channel more resources into sectors critical for improving citizens’ lives.

The World Bank’s support is designed to sustain these reforms and expand social protection for the poor and vulnerable, aiming to put the economy back on a sustainable growth path.

In addition to this substantial support, the World Bank recently approved a $2.25 billion loan to Nigeria at a one percent interest rate to finance further fiscal reforms.

This includes $1.5 billion for the Nigeria Reforms for Economic Stabilization to Enable Transformation (RESET) Development Policy Financing, and $750 million for the NG Accelerating Resource Mobilization Reforms Programme-for-Results (ARMOR).

“The future can be bright, and Nigeria can rise and serve as an example for the region on how macro-fiscal and governance reforms, along with continued investments in public goods, can accelerate growth and improve the lives of its citizens,” the World Bank concluded.

With this robust backing from the World Bank, Nigeria is well-positioned to tackle its economic challenges and embark on a path to sustained prosperity and development.

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