Why a 40.6% unemployment rate hurts more young Nigerians

A percentage rate of 40.6% means that out of a total of 100, 40.6 of them represent the quantity being referred to.

For example, if we are talking about a 40.6% unemployment rate in a country like Nigeria?, it means that out of 100 people in the labor force, 40.6 of them are unemployed. Similarly, if we are talking about a 40.6% interest rate on a loan, it means that the borrower will be charged 40.6% of the loan amount as interest.

In summary, a percentage rate of 40.6% represents a proportion or fraction of a whole, where the percentage value (40.6 in this case) is the numerator and 100 is the denominator.

Global audit and tax advisory firm, KPMG, projected that Nigeria’s unemployment rate is expected to rise to  40.6% as compared to 2022’s 37.7%.

KPMG detailed this forecast in its International Global Economic Outlook report – H1 2023 on Tuesday, where it stated that “unemployment is expected to continue to be a major challenge in 2023 due to the limited investment by the private sector, low industrialization, and slower than required economic growth and consequently the inability of the economy to absorb the 4-5 million new entrants into the Nigerian job market every year”.

The report also revealed in part that there are expectations for GDP to continue to grow at a relatively slow pace of 3% in 2023 owing to the slowdown in economic activity that typically characterizes periods of political transition in Nigeria.

Furthermore, the spillover from an expected slowdown in the global economy in 2023 and its trade and financial flow implications are expected to drag
on GDP.

“Additionally, growth will be negatively affected by the Naira Redesign Policy introduced in Q4 2022 and Q1 2023 and its implications on key non-oil sectors like manufacturing, trade, accommodation and food services, transportation, and other services, further slowing down overall GDP growth in 2023,” the report read.

High unemployment rates in Nigeria can be particularly harmful to young Nigerians for several reasons. Firstly, young people are typically the most affected by unemployment, as they often lack the work experience and qualifications that are required to secure employment in a competitive job market. This can make it difficult for them to find work and build a career, which can have long-term consequences for their financial stability, social status, and wellbeing.

Secondly, high unemployment rates can lead to increased levels of poverty and inequality, which can disproportionately affect young people who may have fewer resources and support networks than older adults. This can lead to a range of negative outcomes, including poor health, low educational attainment, and reduced opportunities for social and economic mobility.

Finally, high unemployment rates can have broader social and economic consequences for the country as a whole, as they can lead to increased crime rates, reduced levels of economic growth and productivity, and a loss of talent and skills from the workforce. This can be particularly damaging in Nigeria, which has one of the largest and fastest-growing youth populations in the world.

In summary, high unemployment rates in Nigeria can have significant negative consequences for young Nigerians, including reduced job prospects, increased poverty and inequality, and broader social and economic problems. Addressing these issues will require a concerted effort from government, civil society, and the private sector to create more opportunities for education, training, and employment, and to build a more inclusive and dynamic economy that can provide for the needs and aspirations of all Nigerians, regardless of their age or background.

According to the World Bank, in 2020, the youth population in Nigeria (between the ages of 15-34) was estimated to be around 104 million, which is approximately 50.3% of the total population of the country.

This high percentage of young Nigerians makes it even more critical to address issues such as unemployment, poverty, and economic hardship, as failure to do so could have far-reaching consequences for the country’s future development and prosperity. It also highlights the need to invest in education, skills development, and job creation initiatives that can provide opportunities for young Nigerians to realize their full potential and contribute to the country’s economy and growth.

A 40.6% unemployment rate in Nigeria would be a very high rate of unemployment, and it would have a particularly negative impact on young Nigerians for several reasons:

1. Lack of job opportunities: Young Nigerians are often the most affected by high unemployment rates as they are just entering the workforce and are competing with more experienced job seekers. With so many people vying for a limited number of jobs, it can be difficult for young Nigerians to secure meaningful employment opportunities.
2. Economic hardship: Unemployment can lead to economic hardship, which can affect young Nigerians in several ways. With no steady income, it can be difficult for them to pay for basic needs like housing, food, and healthcare, and this can lead to poverty and other forms of economic disadvantage.
3. Social exclusion: High unemployment rates can lead to social exclusion and a sense of disconnection from society, which can be particularly damaging for young Nigerians. Being out of work for extended periods of time can lead to feelings of frustration, hopelessness, and low self-esteem, which can have long-term consequences for mental health and wellbeing.
4. Skills atrophy: Young Nigerians who are unable to find work or remain unemployed for an extended period may face a decline in their skills and qualifications, which can make it even harder for them to secure employment in the future.

In summary, a high unemployment rate of 40.6% in Nigeria would disproportionately affect young Nigerians, making it more difficult for them to secure meaningful employment opportunities, leading to economic hardship, social exclusion, and the atrophy of skills and qualifications.