A recent report published by the African Development Bank sheds light on a concerning reality: despite being employed, a significant portion of Nigeria’s workforce continues to grapple with poverty.
According to the Nigeria Country Diagnostic Note 2023, approximately 34.3% of Nigerian workers aged 15 and older are categorized as the “working poor,” living below the poverty line.
The document highlights the plight of many workers who find themselves trapped in poverty due to the prevalence of low-skilled and low-wage jobs across the country.
Over the period from 2012 to 2022, the working poverty rate remained stubbornly high, fluctuating around 35%, with a slight increase attributed to the impact of the COVID-19 pandemic in 2020.
One striking revelation from the report is the decline in output per worker, indicating a significant challenge to Nigeria’s economic productivity. From an 8.7% growth rate in 2013, the output per worker plummeted to a concerning decrease of 0.8% in 2022.
This decline not only reflects economic hardships but also suggests that many firms struggle to adapt their workforce to changing economic conditions, potentially exacerbated by factors such as strong labor unions and skill mismatches.
Education emerges as a critical factor in economic mobility, yet it remains a substantial barrier for many in Nigeria. The report indicates that a staggering 60% of employed Nigerians lack basic education, relegating them predominantly to low-paying informal sector and agricultural jobs.
Moreover, the disparity in educational attainment further limits opportunities for better employment, with only a small fraction of the workforce achieving higher education levels.
The prevalence of skill mismatches and educational inadequacies not only affects individual workers but also poses a broader challenge to the country’s economic progress.
Despite some progress in reducing overall poverty rates, with the income poverty rate dropping from 62.2% in 2009 to 40.1% in recent years, significant issues such as poverty severity and the poverty gap persist.
Looking ahead, the report emphasizes the importance of prioritizing educational enhancements and economic diversification to lift more Nigerians out of poverty and mitigate the vulnerabilities associated with economic shocks.
With an estimated annual need of N3.7 billion to eradicate poverty, addressing these underlying challenges will be crucial in charting a path towards a more inclusive and prosperous future for Nigeria.
