The National Bureau of Statistics (NBS) has reported a significant shift in Nigeria’s labor market, with self-employment decreasing to 84 percent in the first quarter (Q1) of 2024, down from 86 percent in the same period in 2023.
This change highlights a growing trend toward formal employment in the country.
In its report released on Tuesday, NBS noted that the share of Nigerians engaged in salaried employment increased from 12.7 percent in Q3 2023 to 16 percent in Q1 2024, suggesting that more Nigerians are transitioning from self-employment to structured, wage-paying jobs. Despite this shift, a large proportion of the workforce remains self-employed, especially in rural areas where 91.9 percent of the labor force is self-reliant compared to 78.2 percent in urban areas.
The shift has been more pronounced among males, with 79.9 percent still engaged in self-employment compared to 87.9 percent among females, signaling a gender divide in the types of employment pursued.
Despite the growth in formal employment, the employment-to-population ratio, a key indicator of workforce participation, fell to 73.2 percent in Q1 2024, a decrease from 75.6 percent recorded in Q3 2023. This ratio measures the proportion of the working-age population that is employed.
The report showed that rural areas maintain a higher employment rate at 78.9 percent, although this marks a decline from 80.7 percent in Q3 2023. In urban areas, employment also fell to 69.5 percent, down from 71.1 percent.
Amid these shifts, Nigeria’s unemployment rate slightly increased to 5.3 percent in Q1 2024, compared to 5 percent in Q3 2023. This rise reflects the growing pressures on the economy and the labor market’s ability to absorb new entrants.
Gender disparities remained evident, with unemployment among males at 4.3 percent, while females experienced a higher rate of 6.2 percent. Geographically, urban unemployment was higher at 6 percent, while rural areas saw a lower rate of 4.3 percent.
Interestingly, the youth unemployment rate showed a marginal improvement, decreasing from 8.6 percent in Q3 2023 to 8.4 percent in Q1 2024. This decline suggests that some younger Nigerians are finding opportunities, though challenges in the labor market persist.
The NBS report paints a mixed picture for Nigeria’s labor market. While formal employment opportunities are on the rise, the overall employment rate is falling, and unemployment remains a challenge. These trends indicate that while some progress is being made, Nigeria must address the structural challenges that continue to hinder widespread job creation, especially in urban centers. The drop in self-employment also points to the need for more sustainable and diversified employment solutions to support the growing population.