The National Bureau of Statistics (NBS) has disclosed that a staggering 87% of Nigerians within the working age bracket, who do not have traditional salaried positions, have ventured into self-employment as of the third quarter of 2023.
This represents a small decline from the 88% reported in the second quarter of the same year. The data reveals a nuanced shift in the Nigerian employment market, with some self-employed individuals shifting to salaried positions others facing the sad demise of their businesses.
Furthermore, the NBS report shows a modest increase in pay employment among working-age Nigerians, up to 12.7% in the third quarter from 12% the previous quarter.
This gradual increase shows a minor but positive change in the job environment, reflecting a slow but consistent shift of the workers into more formal employment sectors.
The figures highlight an important feature of Nigeria’s labour market dynamics, indicating a strong preference for self-employment despite the difficulties of obtaining salaried positions.
This rise not only highlights Nigerians’ entrepreneurial spirit, but also emphasises the importance of targeted support and policies to cultivate and sustain the self-employed sector, which is critical to the country’s economy.
Self-employment is predominant among women and in rural areas.
The Nigeria Labour Force Survey for Q3 2023, as reported by the NBS, delves further into the complexities of Nigeria’s employment sector, providing a gendered perspective on job developments.
It demonstrates that self-employment is far more common among women than males, giving light on gender dynamics in Nigeria’s labour market.
This distinction emphasises the critical role of women in the nation’s entrepreneurial fabric, with many traversing the economic terrain through self-initiated companies.
Furthermore, it highlights a large regional disparity in employment patterns, with self-employment being far more widespread in rural areas than in cities.
This trend reflects the economic realities that lead people in less urbanised areas to develop work options, even in the lack of conventional wage-paying occupations.
According to the study, “In Q3 2023, 87.3% of employed Nigerians were primarily self-employed with the remaining 12.7% being primarily engaged as employees.”Disaggregated by gender, 90.5% of women were self-employed, compared to 84.2% of males. 80.3% of employed people in urban regions were self-employed, which is lower than 94.5% in rural areas.”
The NBS report for Q3 2023 highlights another significant facet of Nigeria’s labour market: the extremely high rate of informal work, which contrasts sharply with employment patterns in industrialised countries.
With 92.3% of the workforce working in informal settings, the statistics highlight a considerable reliance on non-formalized job sectors that frequently lack the security and perks associated with formal employment.
Notably, the gender difference in the informal sector favours women, who are overrepresented in informal employment compared to their male counterparts.
This tendency not only shows the gendered structure of employment in Nigeria, but it also raises worries about women’s economic vulnerabilities, as they may have restricted access to the social protections and labour rights that are common in formal job situations.
Rural locations have a substantially greater proportion of informal work, as the official job market is less accessible or developed.
This situation is exacerbated for people without formal education, who are more prone to work in informal jobs.
A significant section of the rural workforce lacks formal education, limiting their employment possibilities to informal sectors that, while supporting livelihoods, may also perpetuate cycles of poverty and impede economic mobility.
“Informal employment in Nigeria and other developing countries seems to be very high when compared to the developed countries.
“The share of employed persons in informal employment was 92.3% in Q3 2023 a reduction of 0.4% when compared to 92.7% in the previous quarter. The rate of women in informal employment is significantly higher than that of men.
“The rate of informal employment among people living in rural areas was 97.2% while the urban informality rate was estimated at 87.5%. Females are more likely to be in informal employment than males.”
Nigeria’s unemployment rate increased slightly in the third quarter of 2023, increasing from 4.2% to 5%. This adjustment indicates a 0.8% increase over the second quarter, indicating small changes in the nation’s employment dynamics.
In addition, there is the growing issue of rural unemployment, which has been compounded by insecurity in farming districts across the country.
Disruption in these agricultural heartlands has a huge influence on rural residents’ employment options, as well as food production and local economies.
As insecurity separates people from their principal source of income, the consequences go beyond immediate economic losses to long-term employment and societal stability issues.