With over 170 million people and a high rate of population growth, Nigeria needs to create 40 to 50 million additional jobs between 2010 and 2030. To reduce poverty and promote more inclusive growth, these jobs need to be more productive and provide higher incomes than the country’s jobs today. Three new World Bank reports focus on this challenging agenda.

The report “More, and More Productive, Jobs for Nigeria” provides a detailed overview of jobs, workers, and employment opportunities, while “Understanding and Driving Private Sector Growth in Nigeria” studies constraints and drivers of firm-level growth and implications for employment.” The third report “Skills for Competitiveness and Employability” examines the demand in priority economic and job growth sectors and how to ensure that Nigerians have the right skills.  

“Understanding where people work, constraints to firm growth, and the skills needed is fundamental for formulating appropriate policies,” says Rachid Benmessaoud, World Bank Country Director for Nigeria. “The solid, detailed diagnostics in these reports are critical inputs to developing education and jobs strategies for Nigeria.”

The reports show that “two Nigerias” seem to be emerging: one in which high and diversified growth provides more job and income opportunities, and one in which workers are trapped in traditional subsistence activities. The reports also show a geographic divide, with northern Nigeria having low levels of education access and high youth underemployment than the South. Although skills required in Nigeria remain mostly manual, the South is experiencing more demand for the cognitive skills required by the new knowledge economy.

According to the studies, the majority of adult Nigerians are employed but locked into low-productivity and low-income work, with no job or income security. The studies find that half of working Nigerians are in small-holder farming and another 30 percent working as self-employed in small or micro household enterprises in the non-agricultural sector. Their work is not enough to escape poverty, or attain middle class status for their households.

The reports call for attention to key areas for the country’s education, competitiveness, and jobs agenda. Among the solutions they offer:

First, a transition into more productive employment requires more skills. Nigeria needs to improve basic skills levels. Some 30 percent of youth have not completed more than primary education. Beyond basic skills, better policies and programs would improve access and market relevance of technical vocational education and training. Better job market information and facilitation would strengthen job accreditation and certification and expand opportunities for school-to-work transition. At the same time, informal short programs could help existing workers upgrade skills and become more employable.

Second, the private sector generates employment but firm growth is too small to absorb a large number of Nigerians. About 4 million microenterprises are capable of generating wage jobs, indicating that the informal sector should not be overlooked in development strategies. The formal sector appears to have an even greater potential to grow and generate employment but is limited by low productivity especially in northern Nigeria. The biggest gains to productivity would come from reducing crime, improving access to credit, reducing losses due to power outages, and increasing use of the Internet.

Third, a focus on agriculture is critical, as it will remain the largest employer for the foreseeable future. But there is a disconnect. Agriculture contributed 22 percent to GDP in 2012, but employed half of the working population. Raising agricultural productivity – incorporating small farmers in value chains, increasing access to markets, inputs, and technology would both help raise income opportunities for small holder farmers and simultaneously tap into the significant potential for domestic agriculture and agribusinesses in Nigeria.

Fourth, the reports advocate programs that reduce income volatility over the short term. Safety nets are needed to prevent people from falling into poverty and to protect economic development over the longer term. A coherent framework and institutional set-up for social safety nets is needed.

Finally, efforts to identify appropriate employment policies must be based on reliable data and rigorous analysis. Insufficient and poor quality data is still a constraint in monitoring jobs in Africa’s most populous country.

Jobs in Nigeria: Closing the gaps in a polarized labor market

The latest World Bank Group report for Africa’s most populous country provides an in-depth analysis of Nigeria’s labor market, noting the diversity across geographic areas, sectors, and demographic groups.

“More, and More Productive Jobs for Nigeria: A Profile of Work and Workers,” examines Nigeria’s complex labor market to explore how better jobs and income-earning opportunities can form the basis for more diversified growth, more evenly distributed poverty reduction, and social cohesion. The findings point to a distinct polarization that will require an accelerated structural transformation to significantly increase productive employment opportunities.

“Nigeria is facing a real challenge when it comes to creating enough good jobs for the many new entrants to the job market, and it was important to have reliable data to better understand all the various dimensions of this phenomenon,” said Kathleen Beegle,  World Bank lead economist and co-author of the report.

The report notes that “business as usual” gross domestic product (GDP) growth is fostering the emergence of “two Nigerias” one in which high and diversified growth provides more job and income opportunities to a small share of the population, and one in which workers are trapped in a low-productivity and traditional subsistence activities. This polarization was also observed geographically with the report revealing a divide between northern Nigeria, which has low levels of education access and high youth underemployment, and southern Nigeria, where jobs and income opportunities are concentrated.

This geographic divide also has sectoral dimensions, with two thirds of the population in the North East occupied in agriculture, compared to less than one in five in the South East. Despite the fact that half of working Nigerians are in smallholder farming, agriculture only contributed to 22% of GDP in 2012. In addition, half of those working in agriculture belong to the poorest 40% of the population compared to only 17% of wage workers.

The report calculates that given the country’s rapidly growing population, it will require 40 to 50 million additional jobs to employ its population. The transformation of employment opportunities will need to be balanced and inclusive to also address the gender gap in the labor market and youth unemployment.

However, the report notes that higher employment rates are not a silver bullet to reducing poverty.  A majority of the population works, although most work in low-productivity, low-income jobs that allow them to consume what they produce or live off of modest profits from what they sell, according to the report. Thus, the report emphasizes the importance of the quality of Nigeria’s employment opportunities to ensure that the population can move towards attaining middle income status.

The report offer a series of solutions to address Nigeria’s job challenges, including: 

• In education, Nigeria needs to improve basic skills levels and build better policies and programs that would boost access and market relevance of technical vocational education and training

• In agriculture, increase access to markets, inputs, credit, and technology.

• To help grow private businesses and increase their employment capacity, Nigeria will need to improve the business climate. The biggest gains in productivity would come from reducing crime, improving access to credit, reducing losses due to power outages, and increasing use of the internet.

• A coherent framework and institutional set-up for social safety nets is needed to prevent people from falling into poverty and protect economic development over the long term.