FREE

https://vetivaonline.com/Research/ReportDownload/5141

Nigeria’s unemployment and underemployment rates rose from 13.9% and 19.7% to 14.2% and 21.0% respectively in the final quarter of 2016. In a deteriorating labour market, underemployment became an even bigger concern. There was a net increase of 1.5 million members of the labour force failing to secure full-time employment and of these, 75% became underemployed, with only a quarter becoming fully unemployed. This may signal a shift towards more part-time contracts or firms’ preference to cut worker hours rather than downsize their workforce. More worryingly, the number of workers in full-time employment dropped for the 6th straight quarter and is now at the lowest level since 2013.

Amidst another GDP contraction in Q1’17 and consistently sub-50 employment PMI readings until April, we do not see evidence of an improved labour market so far this year. In fact, we expect the labour market to remain tight for most of the year even as the wider economy rebounds. Oil & Gas – a primary growth driver this year – will not contribute significantly to job growth given its relatively small size and the agriculture sector is likely to pick up the slack once more. A stronger rebound in services and manufacturing is required to drive sustainable job creation. Meanwhile, consumer demand will be slow to pick up this year amidst lower real wages and still-fragile confidence. All things considered, real change, perhaps through ERGP implementation, is needed to resuscitate a sickly labour market.