BUSINESS DAY
Nearly half of Nigerians are poor, despite an unemployment rate of five percent, a new report by the World Bank has said.
The report titled ‘Why do so many Nigerian workers remain poor?’ showed a correlation between the type of employment, whether wage or self-employment and levels of poverty.
“Poor and non-poor Nigerians are about equally likely to work. To escape poverty, it is more important what someone does, rather than whether they work,” the report said.
Using the survey of the latest Nigeria Labour Force Survey (NLFS) by the National Bureau of Statistics (NBS), the Washington lender noted that the type of work Nigerians do is more crucial than just having a job.
It said wage jobs offer a significantly lower poverty rate compared to other types of work, but they are scarce, with only 15 percent of Nigerians holding such positions.
“However, wage jobs are scarce in Nigeria. Only around 15.0 percent of employed Nigerians engage primarily in a paid wage job or an apprenticeship,” the report said.
It added that education, while helpful for obtaining wage work, is not a guaranteed path out of poverty. Less than half of Nigerians with post-secondary education manage to secure a wage job.
Furthermore, most wage jobs lack essential benefits like written contracts, social security contributions, and paid leave. Additionally, most jobs, regardless of wage status, don’t require high skill levels, even for those with higher education.
Only one in 10 workers are managers, (associate) professionals, technicians, or clerical support workers—occupations which use advanced skill levels.
“Moreover, most wage workers do not receive additional job benefits. Less than half of Nigerian wage workers have written contracts, only around one-quarter work for employers that make social security contributions, and just one-fifth have paid leave,” the report said.
The authors of the report stated that the dominance of small businesses employing fewer than five people further limits the demand for high-skilled labour, as complex management and specialization are less prevalent in such settings, highlighting limited access to finance and infrastructure restricts these businesses from growing and creating more high-skill jobs.
Not surprisingly, most of these jobs are held by Nigerians with post-secondary education. However, even among them, more than half are not able to land such a job. Thus, either the skills acquired by post-secondary education do not match the needs of employers, or such jobs are too scarce in Nigeria’s economy.
Underemployment, defined as working less than desired hours, is another significant challenge. Around 13 percent of employed Nigerians fall into this category, highlighting the struggle to find sufficient work hours to meet income needs.
“Not only the nature of the job matters but also how many hours one can find work. Many employed Nigerians cannot get enough hours of work to meet their income needs.
“Around 13.0 percent of employed Nigerians work less than 40 hours per week but are willing and able to work more—they are underemployed. While nearly one-quarter of employed Nigerians take on secondary jobs to supplement their incomes, many others are not able to find a secondary job.
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