Unemployment Rate to Rise Above 30% by the Fourth Quarter of 2020 – PwC

Slow economic growth amid rising uncertainties is expected to push Nigeria’s unemployment rate above 30 per cent in the final quarter of the year.

The PricewaterhouseCoopers (PwC) stated in its September economic alert publication.

According to the report, the unemployment rate in Africa’s largest economy could hit 28 per cent in the third quarter ended September 30, up from 27.1 per cent recorded in the second quarter of the year.

Chief Economist, Dr Andrew Nevin, the Chief Economist, Pwc, explained that due to the negative impacts of COVID-19 on the economy, an estimated real Gross Domestic Product of around N280,000 was needed to absorb a single employed person from Q2 2020 to Q4 2020.

Speaking on how the company arrived at the estimates, he said it was based on the prediction that the economy would contract by 5.4 per cent.

The analyst also noted that Nigeria’s labour force would exceed 80 million while the number of employed people will reduce by 2.14 million in the fourth quarter of the year.

The consulting firm identified the weak industrialisation, slow economic growth, low employability and quality of the labour force as some of the factors responsible for the persistent rise in the unemployment and underemployment rates in the country.

This is despite the Federal Government starting a programme that would create around five million jobs in the agriculture sector, create another 1.8 million jobs through mass housing, 250,000 jobs through solar power and 774,000 jobs through the national public works programme under the National Economic Sustainability Plan and the National Employment Policy.

PwC said the labour programme alone would not be enough to ease the rising unemployment rate in Africa’s largest economy but it was a good start.

The consulting firm said, “Fiscal labour initiatives can only complement economic reforms that promote industrialisation and the growth of MSMEs in reducing unemployment. Industrialisation and the entrepreneurial drive are crucial to solving the unemployment crisis in Nigeria.

“And again, both factors are preconditioned on the performance of the economy and government’s willingness to ease the process of doing business.”