Nigeria will need to create 5 million jobs annually for the next 10 years to cover its unemployment gap, the International Monetary Fund has said.
In a report Monday, the lender said creating that number of jobs will absorb the country’s projected 54 million new entrants in the labour force over the next decade.
The Fund also said the nation needs to embrace more open trade and good policies to rejuvenate growth.
Nigeria’s unemployment rate rose to 27.1 per cent in the second quarter of 2020, increasing from 23.1 per cent in the third quarter of 2018.
The unemployment rate has continued to increase over a decade.
The dire unemployment situation, which some believe is more severe than reported, has been made worse by the coronavirus pandemic, which has led to shutdown of businesses.
“Nigeria will need to create at least 5 million new jobs each year compared to nearly 2 million job losses each year on average in the last five years,” the IMF said in its Article IV report on Nigeria.
The IMF welcomed the idea of higher growth relying moreon labour-intensive manufacturing, light manufacturing and agro-processing.
The IMF proposed the African Continental Free Trade Agreement (AfCFTA) be used to tackle unemployment.
“The recently ratified African Continental Free Trade Agreement (AfCFTA) holds huge prospects for job-rich growth through regional trade and economic integration,” the report said.
Nigeria joined 53 other countries in Africa on January 1 to set in motion the world’s biggest trade bloc.
The trade will speed up easy and efficient intra-continental trade, marked by few restrictions and less complex checks of goods across national borders and ports of entry for participating nations.
It said to unlock the potential of the AfCFTA follow up actions are needed.
“Keeping borders open, while stepping up measures to address security concerns including smuggling, is not only critical to ensuring the flow of goods and services that enables price stability and growth but is expected to have a positive signaling effect on the business environment in Nigeria,” it said.
“Implementing trade enabling reforms, such as speeding up customs clearing time, and removing regulatory bottlenecks, are key to improving Nigeria’s international competitiveness,” it concluded.