BrazilPopulation growth is only likely to increase unemployment in Nigeria
A high population, massive debt levels and unemployment are causing severe stagnation in Nigeria’s economic growth, as the country looks to diversify its economy beyond the oil trade. Analysts at Stears Business predict that unemployment will persist under the current economic conditions.
The growth rate in the population currently exceeds growth in the country’s GDP, which constitutes a major reason for predictions that unemployment will persist. “Unemployment will remain an issue even when the economy begins to boom, simply because of the rapid rate of population growth,” said Michael Famoroti, an economist at Stears Business.
The problem of rapid population growth has been a prominent one in the Nigerian context, prompting global financial institutions such as the International Monetary Fund to suggest that the country should focus on growth in income per capita, given that it is expected to be the third largest population on the planet by 2050.
A report from the Boston Consulting Group in 2016 revealed how despite substantial economic growth in the country over the last two decades, the lack of equitability in this growth has led to a scenario with low employment and labour force participation, and consequently low access to education and healthcare.
As a result, the country has a substantial population, a large portion of which lives in extreme hardship and is restless with the social and economic conditions in the country. Among a range of other factors, Nigeria’s economic woes can be attributed to a disproportional reliance on the oil and gas sector.
Nigeria is the biggest exporter of oil in Africa, and crude oil accounts for nearly 70% of the government’s income. 90% of the country’s foreign currency reserves have also been built up through the oil trade, which meant catastrophe for the country in 2014 when global oil prices plummeted.
A report from global professional services firm Deloitte last year revealed that the country’s economy had stabilised to some extent since the dip in prices, having returned to a growth rate of 1% for that year. Nevertheless, the report highlighted the income inequality, and reaffirmed Stears’ prediction that unemployment will remain high in the current economic scenario.
