The dwindling oil market, the uprising in the north, Fulani-Herdmen clash in the south, rising inflation, and loopholes in the tax administration are some of the issues the Nigerian government already grapple with. Despite these underlining challenges, in recent times, revenue from taxes is fast becoming the nation’s major stay.
This major stay is now set to face a new threat courtesy of the new alarming unemployment rate. Recently, Bloomberg reported that unemployment in Nigeria; Africa’s largest economy, surged to the second-highest on a global list of countries.
Suffice to note by another publication of the National Bureau of statistics is that this surge was a result of consistent job loss to a tune of 33.3% in the fourth quarter of 2020. This is up from 27.1% in the second quarter of 2020.
Taxmobile.Online also learnt from the report that third of the 69.7 million-strong labour force in Africa’s most-populous nation either did nothing or worked for less than 20 hours a week, making them unemployed, according to the Nigerian definition. Another 15.9 million worked less than 40 hours a week, making them underemployed.
These grim stats has made Nigeria surpass Africa on a list of 82 countries whose unemployment rates are tracked by Bloomberg. Namibia still leads the global list with 33.4%.
More insight on Nigeria unemployment rate
It is no cheering news that Nigeria’s jobless rate has more than quadrupled over the last five years as the economy went through two recessions.
Other grim stats
The lack of jobs adds to pressure on consumers in a country where food prices rose more than 20% year-on-year in January and authorities struggle to bring insecurity driven by violent insurgency attacks and kidnappings under control.
Nigeria’s finances were knocked by last year’s drop in the price of oil, which accounts for 90% of foreign-exchange earnings and about half of the government income.
More than 60% of Nigeria’s working-age population is younger than 34.
Unemployment for people aged 15 to 24 stood at 53.4% in the fourth quarter, and at 37.2% for people aged25 to 34. The jobless rate for women was 35.2% compared with 31.8% for men.
Nigeria is expected to be the world’s third-most-populous country by 2050, with over 300 million people, according to the United Nations.
For the tax administration, if this data continues to surge, there will be an outright deduction on Personal Income Tax through PAYE as the government by extant Nigerian laws cannot tax unemployment. In a time where the government looks towards revenue from taxes to shore up its revenue base, something strategic has to be done and on time to salvage the situation.
As a solution to this menace, the Director-General of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala, has recently proposed during her first working visit to Nigeria, the expansion of Nigeria’s manufacturing scale.
According to her, more manufacturing of the country’s abundant raw materials will lead to more creation of jobs which will reduce the exportation of jobs that should benefit the army of unemployed Nigerians.
In her words,
“We have to start moving towards more manufacturing. We have to start looking towards adding more value to the products we now have. Why is that important? This is so that we can create more jobs and trade more. You can trade more if you produce more and add more value. Let’s not export our jobs to the outside.