The National Bureau of Statistics (NBS), in its latest Q2 2024 Labor Force Survey, has revealed that 85.6% of Nigeria’s working-class population is self-employed. This underscores the prominent role of self-employment in the country’s labor market, reflecting structural and economic shifts affecting employment patterns.
Key Findings from the NBS Report:
- Self-Employment Dominates:
- Self-employed individuals account for 85.6% of Nigeria’s workforce, a slight increase from 84% in Q1 2024, though a drop from 88% in Q2 2023.
- Self-employment remains especially common in rural areas where it stands at 94.3%, compared to 79.7% in urban areas. This is largely due to the agricultural and trade sectors, which dominate rural economies.
- Gender and Self-Employment:
- Women are more likely to be self-employed, with 88.3% of females in self-employment, compared to 82.2% of males.
- However, men tend to dominate wage-based employment, a factor that reflects broader gender inequalities in formal labor markets.
- Informal Employment:
- Informal employment continues to predominate, making up 93% of the total employment in Nigeria in Q2 2024, a slight increase from 92.7% in Q1 2024.
- Workers without formal education make up 99% of informal employment, while those with post-secondary education have a significantly lower informal employment rate of 26.6%. This highlights the link between educational attainment and the likelihood of accessing formal employment.
- Rural-Urban Divide in Employment:
- Informal employment rates are higher in rural areas (97.5%) compared to urban areas (90%). The NBS attributes this rural-urban disparity to the higher prevalence of agriculture and small-scale enterprises in rural areas, where formal job opportunities are fewer.
- Economic Activity and Workforce Engagement:
- The employment-to-population ratio increased to 76.1% in Q2 2024 from 73.2% in Q1 2024, signaling a more engaged workforce.
- The labor force participation rate rose slightly to 79.5% in Q2 2024, marking a steady recovery in economic activity, especially in informal and self-employment sectors.
- Unemployment Rate:
- The unemployment rate decreased to 4.3% in Q2 2024, a 1 percentage point drop from 5.3% in Q1 2024, though it rose slightly compared to the previous year.
Implications for Nigeria’s Labor Market:
- Self-Employment and Informality: The dominance of self-employment, especially in rural areas, highlights the ongoing reliance on informal work. This impacts the provision of social protections like pensions, healthcare, and unemployment benefits, which are typically more accessible in formal employment sectors.
- Gender and Employment: The higher prevalence of self-employment among women and the lower formal employment rates for women suggest that more focused interventions are needed to promote gender equity in access to formal jobs and entrepreneurial opportunities.
- Education and Employment: The data confirms that higher educational attainment leads to a lower likelihood of engaging in informal employment. Thus, improving access to education and skills training will be critical in providing pathways to more stable, formal jobs.
- Regional Disparities: The rural-urban divide emphasizes the need for policies that enhance job creation in rural areas, particularly in formal sectors, to bridge these employment gaps.
In conclusion, while self-employment remains a significant aspect of Nigeria’s labor market, addressing the challenges related to informality, education, gender disparities, and regional inequalities will be essential for creating a more inclusive and sustainable labor market in the country.
