Nigeria’s current unemployment rate is 33.3 percent, according to figures from the National Bureau of Statistics (NBS), but KPMG is predicting that the crisis will rise further to 40.6 percent in 2023.
In its report titled “Global Economic Outlook,” the professional services firm said the figure is based on its estimates.
“Unemployment is expected to continue to be a major challenge in 2023 due to the limited investment by the private sector, low industrialization, and slower than required economic growth, and consequently the inability of the economy to absorb the 4–5 million new entrants into the Nigerian job market every year,” KPMG said in the report.
Although it lagged, the National Bureau of Statistics recorded an increase in the national unemployment rate from 23.1% in 2018 to 33.3% in 2020.
“We estimate that this rate has increased to 37.7% in 2022 and will rise further to 40.6% in 2023.”
According to KPMG, Nigeria’s GDP will continue to grow at a relatively slow three percent annual rate in 2023.
This, in the report, is due to the typical slowdown in economic activity that characterizes periods of political transition in Nigeria.
Based on the firm, the spillover from an expected slowdown in the global economy, as well as the implications for trade and financial flows, will likely drag on the country’s GDP.
KPMG said that key non-oil sectors such as manufacturing, trade, accommodation, food services, and transportation would be negatively affected by the naira redesign policy introduced by the Central Bank of Nigeria (CBN), further slowing down overall GDP growth in 2023.
“Nevertheless, we expect telecommunications, trade services, as well as an expected recovery in the oil sector, on account of measures being taken to tackle security issues, to drive our forecast of 3% growth in 2023,” the firm said.
KPMG further projected that the incoming administration would face a deeply rooted and challenging environment characterized by fragile and slow economic growth and challenges in the foreign exchange market.
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