The International Monetary Fund (IMF), has said the Nigerian government cannot end unemployment in the country if it continues to lose millions of jobs instead of creating jobs.
According to a report the financial institution on Monday, it would take the creation of at least, 5 million jobs annually for the next 10 years, for the country to cover its unemployment gap. It 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.
Meanwhile, the IMF's proposal that Nigeria devalues the Naira by at least, 10%, saying a clear exchange rate policy is needed to instill near-term confidence and bring long-term gains, was rejected by the Nigerian government over concerns that doing so, could worsen economic concerns like inflation.
The IMF in its report, had estimated that a 10 percent devaluation could push the inflation rate up by up to 2.5 percentage points, but the impact could be less if the parallel market rate is already reflected in the prices of imported goods.
The IMF said experience from other countries that have undergone exchange rate adjustment generally shows less pass-through and often a more transient impact on inflation, and some targeted support is likely needed to minimize the impact on the poor.