Nigeria Labour Force Survey Q1 2024: Employment and Underemployment Overview

The Q1 2024 Nigeria Labour Force Survey (NLFS) presents a complex picture of employment, underemployment, and labour force participation in the country. The report, conducted by the National Bureau of Statistics (NBS), provides critical insights into key metrics such as employment-to-population ratio, labour force participation, informal employment, and the unemployment rate. This article will break down these results, offering a clear overview of the labour market dynamics and trends emerging this quarter.

Overview of Labour Force Participation

The labour force participation rate measures the proportion of the working-age population that is either employed or actively seeking employment. In Q1 2024, this rate declined to 77.3%, down from 79.5% in Q3 2023. This drop indicates that fewer people of working age were involved in the labour force compared to previous quarters. Disaggregated by location, the participation rate stood at 82.5% in rural areas and 74.0% in urban areas, indicating that rural communities still have a higher labour force participation compared to urban areas.

Employment-to-Population Ratio

The employment-to-population ratio indicates the percentage of the working-age population that is employed. For Q1 2024, this ratio was 73.2%, a decline from 75.6% in Q3 2023. When broken down further:

• Males had an employment-to-population ratio of 74.2%, whereas females stood at 72.3%.
• Rural areas had a higher employment ratio (78.9%) compared to urban areas (69.5%).

Unemployment and Underemployment

The unemployment rate increased slightly in Q1 2024, reaching 5.3% from 5.0% in Q3 2023. This rise reflects a tightening labour market where fewer opportunities might have been available. Specific details include:

• Unemployment among males was 4.3%, whereas females experienced a higher rate of 6.2%.
• Urban unemployment remained steady at 6.0%, while rural areas experienced a slight increase to 4.3%.

Time-related underemployment—where people work fewer hours than they are willing and available to work—declined to 10.6% from 12.3% in Q3 2023. This reduction suggests an improvement in the availability of work hours or better job matching in Q1 2024.

Informal Employment and Wage Status

Informal employment remains a significant component of Nigeria’s labour market. The informal employment rate increased marginally from 92.3% in Q3 2023 to 92.7% in Q1 2024. Informality remains more prevalent among individuals with lower levels of educational attainment. In Q1 2024:

• 92.7% of employment was informal, with females being more likely (96.4%) to be in informal employment compared to males (88.7%).
• Rural areas had an informal employment rate of 97.6%, while urban areas recorded 89.0%.

Regarding employment types, self-employment remained dominant at 84%, though it dropped slightly from previous quarters, highlighting an increase in wage employment opportunities, which rose to 16% in Q1 2024, up from 12.7% in Q3 2023.

Youth Labour Market Challenges

The survey also sheds light on the challenges faced by young people in the labour market:

• The youth unemployment rate (ages 15-24) was 8.4% in Q1 2024, a slight decrease from 8.6% in Q3 2023.
• The NEET rate (youth not in education, employment, or training) increased to 14.4% from 13.7%, highlighting ongoing challenges for youth engagement in productive activities. Females recorded a higher NEET rate of 15.9%, while males had a rate of 13.0%.

Sectoral Employment Insights

• Agricultural Employment: In Q1 2024, 4.5% of the working-age population was involved in subsistence agriculture, up from 4.1% in Q3 2023, indicating slight growth in people working to sustain their households.
• Employment-to-Population Ratio by Sector: The employment ratio was notably higher in rural areas due to the prevalence of agricultural work and subsistence farming, which continues to provide livelihood options for a significant portion of the population.

Key Labour Market Challenges

• Discouraged Job Seekers: In Q1 2024, 3.6% of people outside the labour force were classified as discouraged job seekers, compared to 3.1% in Q3 2023. This increase shows more individuals giving up on searching for jobs, potentially due to lack of qualifications, experience, or available opportunities that match their skills.
• Underutilisation Measures (LU2-LU4): Measures of labour underutilisation—which include combinations of unemployment, underemployment, and those not participating but willing to work—remained significant, indicating a labour market that still has inefficiencies and areas for potential improvement.

Visual Insights into Labour Market Trends

Conclusion

The Q1 2024 results of the Nigeria Labour Force Survey show that while there are areas of improvement, such as reduced underemployment, the labour market still faces significant challenges. Rising unemployment, a higher rate of discouraged job seekers, and increased informal employment remain obstacles that need addressing. Targeted interventions in formal job creation, youth empowerment, and skill training are essential for tackling these labour market inefficiencies and promoting sustainable growth.

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