ABUJA, December 2, 2019—Nigeria’s economy is recovering gradually from the 2016 recession, with growth projected to pick up from 1.9 percent in 2018 to 2 percent in 2019 and 2.1 percent in 2020-21, according to the latest World Bank Nigeria Economic Update (NEU). This growth outlook is vulnerable to external and domestic risks, including geopolitical and trade tensions that may affect inflows of private investment. With population growth (estimated at 2.6 percent) outpacing economic growth, per capita incomes are falling.
According to the report, Nigeria has the opportunity to advance reforms to mitigate these risks amid growing public demand for greater economic opportunities.
The report, Jumpstarting Inclusive Growth: Unlocking the Productive Potential of Nigeria’s People and Resource Endowments, shows that Nigeria created about 450,000 new jobs in 2018, partially offsetting the loss of jobs in the previous year. Nigeria’s labor force is growing rapidly and while over five million Nigerians entered the labor market in 2018, the number of unemployed people increased by 4.9 million in the last year.
Some states are showing progress such as Enugu, Lagos, Ondo and River, and have reduced unemployment. In the year following the recession between 2017 and 2018, 10 states have seen an increase in the number of jobs created, but these were not enough to absorb the new generation entering the labor force.
Recent government efforts to boost job creation include improvements in regulations to start and operate a business. Nigeria improved its ranking in the Doing Business index from 169th in the world in 2017 to 131st in 2019. Other efforts include the recent launch of the Central Portal for Government Services to increase transparency and support the development of the digital economy. In July 2019, the government signed the Africa Continental Free Trade Area agreement. The government has also taken measures to enhance social protection systems.
“Reforms would help achieve faster, more inclusive, and sustained growth with jobs,” said Shubham Chaudhuri, The World Bank Country Director for Nigeria. “Building on recent efforts, the report identifies priorities of action that can increase fiscal revenues and improve the quality of spending to manage oil-sector volatility, invest in human capital and infrastructure, and improve the business climate to unlock private investment and tackle Nigeria’s jobs challenge.”
The report discusses strategies to boost the productivity and resilience of the Nigerian economy: leveraging trade integration to harness the benefits of the Africa Continental Free Trade Area; improving the efficiency of spending in education; monitoring the impact of conflict to protect the poor and vulnerable; and leveraging digital technologies to diversify the economy and create jobs for young workers.