Nigeria's unemployment rate rises to 13.3%

Nigeria's equities market kicked off the last month of the year on a positive note, with the oil share index recording a nine basis point increase to close at 25,265.08 points. The market capitalization also saw a rise of 2.2 billion NARA to settle at 8.7 trillion NARA, while the year-to-date loss eased to 11.8%. The uptrend in the benchmark index was driven by renewed interest in oil and gas banking stocks, resulting in mixed performance across sectors. The oil and gas index led sector gainers with a 3% increase, fueled by a sustained rally in companies like Mobil and Uandoh. The banking index also advanced by 0.3% due to renewed buying interest in banks such as Guaranty Trust Bank and UBA. On the contrary, the consumer goods index fell by 0.5%, and the insurance index slid by 0.1%, with sell-offs in CCNN dragging the industrial goods index lower. Jim Tewe, CEO of Inspiro Consulting, discussed Nigeria's unemployment rate, which rose to 13.3% in the second quarter of 2016. He anticipates the release of the third-quarter unemployment figures and the labor productivity report and shared insights on what to expect from these Q3 figures. Tewe highlighted the transition phase Nigeria is going through, suggesting that while the unemployment rate may remain similar to the previous quarter or see a slight decrease, it will take time for structural investments, monetary policy stability, and other factors to take effect. He emphasized the need to focus on long-term gains despite the short-term challenges. In the last quarter, Tewe noted a significant increase in the informal sector, particularly in professional services, as many manufacturing industries faced challenges due to import dependence and forex constraints. He mentioned government initiatives like tax incentives for small businesses and emphasized the importance of absorbing more people into the formal sector through such measures. Addressing the decline in employment numbers in the oil and gas sector, Tewe stressed the negative impact of reduced capacity on service-based firms within the industry. He called for a balance in the sector to drive more employment opportunities, emphasizing the need for investment in areas like agriculture, manufacturing, and infrastructure. One of the crucial sectors for Nigeria's economy is oil, with a high dependence on exports. While exports rose in the third quarter, there was still a significant number of imports for machinery and transportation. Tewe highlighted the government's plans to invest in local refineries and other sectors beyond oil to drive economic growth. Regarding youth employment and the attractiveness of the agriculture sector, Tewe mentioned the availability of capital and technology in modernizing the sector, making it more appealing to the youth. He advocated for exploring new opportunities and leveraging regional collaborations to enhance agricultural productivity. In conclusion, Tewe emphasized the importance of diversifying the economy away from oil and investing in sectors that can drive sustainable growth. While challenges persist, strategic investments in areas like agriculture, manufacturing, and infrastructure are crucial to reducing unemployment and spurring economic development in Nigeria.