Unemployment rate in Nigeria could hit 30 per cent in the fourth quarter due to the impact of the COVID-19 pandemic, PricewaterhouseCoopers (PwC Nigeria), has alerted.
The firm’s internal models also estimate that unemployment could reach 28 per cent in third quarter before adding another two per cent in the fourth quarter to hit the projected 30 per cent.
The global tax audit firm, said its estimate was based on the assumptions that an estimated real Gross Domestic Product (GDP) of about N280, 000 was required to absorb a single employed person from second quarter to fourth quarter of this year.
Some of the factors that account for the rise in unemployment and underemployment, the company said, include low level of industrialisation in the country, slow economic growth, and low employability and quality of the labour force.
The report, which was authored by PwC’s Partner and Chief Economist Andrew Nevin and its Manager Omomia Omosomi, as well as Junior Economist Michael Ogunremi, stated the consequences of the high unemployment rate.
They listed them as fall in aggregate demand and supply, continued dependence on imports due to lower domestic productivity and output, fall in household income, which is likely to further widen the income inequality gap.
The warning came just as the World Bank projected that the pandemic would push between 88 million and 115 million people into extreme poverty this year. The total figure could rise to 150 million by 2021, depending on the severity of the economic contraction.
World BankGroup President David Malpass said: “The pandemic and global recession may cause over 1.4 per cent of the world’s population to fall into extreme poverty.”
World Bank said eight out of 10 ‘new poor’ will be in middle-income countries. Many of the new poor will be in countries that already have high poverty rates. A number of middle-income countries will see significant numbers of people slip below the extreme poverty line.
PwC’s update on Nigeria’s rising unemployment rate, was contained in its report titled: “Nigeria economic alert”, which provided an analysis of Nigeria’s latest unemployment figures from the National Bureau of Statistics (NBS).
The NBS Labour Force Survey said Nigeria’s unemployment rate was 27 per cent in second quarter, – four percentage points higher than the 23 per cent reported in third quarter of 2018.
