NESG projects Nigeria’s unemployment rate to hit 37% in 2023

The Nigerian Economic Summit Group (NESG) says the country’s unemployment rate is may to rise to 37 percent in this year.

The private sector-led think-tank made the projection in its latest 2023 macroeconomic outlook report titled, ‘Nigeria in transition: recipes for shared prosperity’.

The projected rate is almost 4 percentage points higher than the National Bureau of Statistics (NBS) unemployment rate of 33.3 percent as at fourth quarter (Q4) 2020.

Launching the 2023 outlook report, NESG said the country’s poverty headcount will increase to 45 percent.

“The unemployment rate will increase to 37 percent and the poverty headcount will amplify to 45 percent due to weak performance in the job-elastic sectors, low labour absorption of sectors that will drive growth, and population growth estimated at 3.2 percent will lead to a decline in real per capita income,” the report reads.

NESG said real gross domestic product (GDP) growth is expected to moderate to 2.98 percent, while economic growth would be subdued in 2023 due to strains on investment and low productivity in critical sectors.

“The services sector will drive economic growth, but this growth will not be strong enough to generate significant jobs,” the report adds.

“As a result, unemployment will remain unabated. Economic growth will be supported by election-related spending and improvement in the oil sector.”

NESG said the country’s inflation rate is expected to average 20.5 percent in 2023.

According to the group, inflationary pressure is expected to remain elevated, driven by structural, cost, and monetary factors.

It added that food inflation would remain the fundamental driver of inflation due to the enduring impact of flooding, increased production costs due to increased cost of credit, insecurity and displacement.

Also, existing fuel shortages and the removal of fuel subsidies would continue to increase the core components, especially transportation.

As efforts to contain crude oil theft in Nigeria intensify, the group said crude oil production would average 1.35 million barrels per day (mbpd) in 2023.

“This represents an improvement over the 1.15mbpd in 2022 but is 20 percent lower than the 2023 budgetary oil production of 1.69mbpd,” NESG said.

“The outcome is an improvement in government capital expenditure to N2.35 trillion representing a budget implementation rate of 43.9 percent.”