Company Closures Worsen Youth Unemployment Crisis

Company Closures Worsen Youth Unemployment Crisis

The recent surge in company closures in Nigeria has intensified concerns about rising youth unemployment, as multinational corporations exit the country amid a challenging business environment……. CONTINUE READING

Nigeria, with its significant youthful population—nearly 70% under the age of 30—has long been viewed as having economic potential. However, the reality paints a troubling picture as many young Nigerians remain unemployed and under-skilled despite optimistic economic forecasts.

Recent data shows a minor drop in the national unemployment rate, from 33.3% in 2021 to 32.5% in 2023. Yet, the number of youths neither employed nor engaged in education or training continues to climb.

In 2023, the Manufacturing Association of Nigeria reported that 767 manufacturing companies shut down and 335 faced distress due to economic difficulties like inflation, volatile exchange rates, and a deteriorating investment climate.

Economist Dr. Vincent Nwani highlighted that the departure of multinationals has resulted in a loss of N94 trillion in output over five years. He warned that without significant changes to address insecurity, illegal taxation, corruption, and foreign exchange instability, more companies may exit Nigeria.

The issue of youth unemployment is compounded by several factors. A decline in the unemployment rate does not necessarily indicate an increase in job opportunities but may reflect a drop in job seekers or a shift to informal, low-paying jobs. The underemployment rate, showing people working less than 40 hours a week or in jobs below their skill level, remains high.

The National Bureau of Statistics reported that Nigeria’s labour force participation rate was 80.4% in Q2 2023, with an employment-to-population ratio of 77.1%. The combined unemployment and underemployment rate was 15.5%, while the unemployment rate slightly increased to 4.2%.

A major cause of the unemployment crisis is the mismatch between educational qualifications and job market demands. Many graduates are ill-prepared for modern jobs due to outdated curricula that emphasize theoretical over practical skills. High education costs also limit access to higher education and vocational training.

Moreover, Nigeria’s economy, heavily reliant on the oil sector, offers limited job opportunities. Sectors like agriculture and manufacturing are underdeveloped, and poor infrastructure and limited credit access further hinder job creation.

The lack of opportunities can lead to criminal activities, including drug abuse, armed robbery, and internet fraud, contributing to political instability and violence. Young women face additional barriers due to cultural norms and gender biases, often forced into early marriages or domestic roles.

Experts warn that the growing number of youths not in education, employment, or training (NEET) could lead to severe consequences like increased poverty, social exclusion, and mental health issues.

Human resources consultant Mr. Tolu Adedayo emphasized the need for a comprehensive employment plan and better alignment between education and market demands. He suggested supporting entrepreneurship through soft loans and grants, improving vocational training, and updating educational curricula.

HR Analyst Victor Oyesina echoed these sentiments, calling for urgent reforms in the education system, increased investment in digital infrastructure, and stronger partnerships between government, private sector, and international organizations to drive job creation.

Addressing Nigeria’s youth unemployment crisis requires a multi-faceted approach involving all stakeholders to ensure every young Nigerian has the opportunity to build a better future.

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