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Unemployment Rates Highest in South-South States

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  • Unemployment Rates Highest in South-South States

The data released by the National Bureau of Statistics on Friday revealed the high rate of unemployment rates across the South-South states despite huge oil exploration in the states.

According to the report that listed unemployment rates for every region in the country during the third quarter of 2018, states in the Southern part of the nation recorded the highest unemployment rates during the period.

Breaking down the unemployment report into six Geopolitical Zones in the country.

Geopolitical Zones Unemployment Rates Unemployment Percent
North Central states 3,204,235 27%
The North Eastern States 2,61,971 22%
North West states 3,871,637 24%
South East states 2,871,659 23%
South Southern states 5,385,608 32%
South West states 2,978,537 14%
Total unemployed Nigerians 20,927,648 23.1%

From the data, Southern states of the country recorded the highest unemployment rate with 5.4 million unemployed people or 32 per cent of the total number of unemployed Nigerians.

With the labour force of 16.7 million people, substantial internally generated rated revenue and billions of naira in monthly allocations, one would expect a better job number from the Southern states.

In fact, Akwa Ibom and Rivers, two of Nigeria’s richest states recorded 37 per cent and 36.4 per cent unemployment rates, respectively.

On the other hand, South West region created the most jobs despite its huge population. The labour force population was put at 21.4 million, with the number of unemployed persons standing at about 3 million or 14 per cent during the period under review. The lowest among the six geopolitical zones.

New job creation remained low across the Nigerian federation, especially among the youths with unemployment/underemployment rate of 55.4 per cent, higher than the national rate of 43.3 per cent.

World Bank, in a recent report titled ‘Pathways to Better Jobs in IDA Countries,’ stated that unemployment is not the main problem in low-income nations like Nigeria but huge underemployment due to too many idle hours is responsible for poverty in those economies.

The report further stated that people work in low-income nations because they cannot afford otherwise. Therefore, overqualified highly skilled employees are willing and ready to take up any available job just to get by.

The high underemployment rate in Nigeria validated the World Bank position that economic growth (GDP) in International Development Association (IDA) nations does not translate to job creation except it is an inclusive growth that is labour intensive.

Therefore, until Federal Government enhanced economic productivity through job creation, high underemployment and poverty will continue to undermine national growth.

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

Nigeria, China Collaborate to Bridge $18 Billion Trade Gap Through Agricultural Exports

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In a concerted effort to address the $18 billion trade deficit between Nigeria and China, both nations have embarked on a collaborative endeavor aimed at bolstering agricultural exports from Nigeria to China.

This strategic partnership, heralded as a landmark initiative in bilateral trade relations, seeks to narrow the trade gap and foster more balanced economic exchanges between the two countries.

The Executive Director of the Nigerian Export Promotion Council (NEPC), Nonye Ayeni, revealed this collaboration during a joint meeting between the Council and the Department of Commerce of Hunan province, China, held in Abuja on Monday.

Addressing the trade imbalance, Ayeni said collaborative efforts will help close the gap and stimulate more equitable trade relations between the two nations.

With Nigeria importing approximately $20.4 billion worth of goods from China, while its exports to China stood at around $2 billion, representing a $18 billion in trade deficit.

This significant imbalance has prompted officials from both countries to strategize on how to rebalance trade dynamics and promote mutually beneficial economic exchanges.

The collaborative effort between Nigeria and China focuses on leveraging the vast potential of Nigeria’s agricultural sector to expand export opportunities to the Chinese market.

Ayeni highlighted Nigeria’s abundant supply of over 1,000 exportable products, emphasizing the need to identify and promote the top 20 products with high demand in global markets, particularly in China.

“We have over 1,000 products in large quantities, and we expect that the collaboration will help us improve. The NEPC is focused on a 12-18 month target, focusing on the top 20 products based on global demand in the markets in which China is a top destination,” Ayeni explained, outlining the strategic objectives of the collaboration.

The initiative not only aims to reduce the trade deficit but also seeks to capitalize on China’s growing appetite for agricultural products. Nigeria, with its diverse agricultural landscape, sees an opportunity to expand its export market and capitalize on China’s increasing demand for agricultural imports.

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Economy

IMF Urges Nigeria to End Fuel and Electricity Subsidies

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In a recent report titled “Nigeria: 2024 Article IV Consultation,” the International Monetary Fund (IMF) has advised the Nigerian government to terminate all forms of fuel and electricity subsidies, arguing that they predominantly benefit the wealthy rather than the intended vulnerable population.

The IMF’s recommendation comes amidst Nigeria’s struggle with record-high inflation and economic challenges exacerbated by the COVID-19 pandemic.

The report highlights the inefficiency and ineffectiveness of subsidies, noting that they are costly and poorly targeted.

According to the IMF, higher-income groups tend to benefit more from these subsidies, resulting in a misallocation of resources. With pump prices and electricity tariffs currently below cost-recovery levels, subsidy costs are projected to increase significantly, reaching up to three percent of the gross domestic product (GDP) in 2024.

The IMF suggests that once Nigeria’s social protection schemes are enhanced and inflation is brought under control, subsidies should be phased out.

The government’s social intervention scheme, developed with support from the World Bank, aims to provide targeted support to vulnerable households, potentially benefiting around 15 million households or 60 million Nigerians.

However, concerns persist regarding the removal of subsidies, particularly in light of the recent announcement of an increase in electricity tariffs by the Nigerian Electricity Regulatory Commission (NERC).

While the government has taken steps to reduce subsidies, including the removal of the costly petrol subsidy, there are lingering challenges in fully implementing these reforms.

Nigeria’s fiscal deficit is projected to be higher than anticipated, according to the IMF staff’s analysis.

The persistence of fuel and electricity subsidies is expected to contribute to this fiscal imbalance, along with lower oil and gas revenue projections and higher interest costs.

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Economy

IMF Warns of Challenges as Nigeria’s Economic Growth Barely Matches Population Expansion

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The International Monetary Fund (IMF) has said Nigeria’s growth prospects will barely exceed its population expansion despite recent economic reforms.

Axel Schimmelpfennig, the IMF’s mission chief to Nigeria, who explained the risks to the nation’s economic outlook during a virtual briefing, acknowledged the strides made in implementing tough economic reforms but stressed that significant challenges persist.

The IMF reaffirmed its forecast of 3.3% economic growth for Nigeria in the current year, slightly up from 2.9% in 2023.

However, Schimmelpfennig revealed that this growth rate merely surpasses population dynamics and signaled a need for accelerated progress to enhance living standards significantly.

While Nigeria has received commendation for measures such as abolishing fuel subsidies and reforming the foreign-exchange regime under President Bola Tinubu’s administration, these reforms have not come without costs.

The drastic depreciation of the naira by 65% has fueled inflation to its highest level in nearly three decades, exacerbating the cost of living for many Nigerians.

The IMF anticipates a moderation of Nigeria’s annual inflation rate to 24% by the year’s end, down from the current 33.2% recorded in March.

However, the organization cautioned that substantial challenges persist, particularly in addressing acute food insecurity affecting millions of Nigerians with up to 19 million categorized as food insecure and a poverty rate of 46% in 2023.

Moreover, the IMF emphasized the importance of maintaining a tight monetary policy stance to curb inflation, preserve exchange rate flexibility, and bolster reserves.

It raised concerns about proposed amendments to the law governing the central bank, fearing that such changes could undermine its autonomy and weaken the institutional framework.

Looking ahead, Nigeria faces several risks, including potential shocks to agriculture and global food prices, which could exacerbate food insecurity.

Also, any decline in oil production would not only impact economic growth but also strain government finances, trade, and inflationary pressures.

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