GDP growth masks Nigeria’s deepening youth jobs crisis

By Arthur Eriye

Nigeria’s economy is recording its strongest growth in years; however, these gains have yet to translate into broad-based employment, as millions of young Nigerians continue to struggle to secure decent and sustainable jobs. The widening gap between economic expansion and job creation has renewed concerns about the inclusiveness of the country’s growth trajectory and its capacity to absorb a rapidly expanding labour force.

Recent statistics from the National Bureau of Statistics (NBS) indicate that the nation’s real Gross Domestic Product (GDP) increased by 3.89 percent year-on-year in the first quarter of 2026, building on the robust economic momentum observed in late 2025. This growth has primarily been fueled by the services sector, including telecommunications, finance, and enhancements in oil production.

Nevertheless, economists have  expressed  concerns regarding the quality of this growth, as it has not resulted in adequate employment opportunities, especially for young Nigerians entering the workforce annually.

Nigeria boasts one of the youngest populations in the world, with over 70 percent of its estimated 230 million citizens under the age of 35. Each year, hundreds of thousands of graduates from universities, polytechnics, and colleges anticipate finding jobs, only to face a labor market that cannot accommodate them.

The National Bureau of Statistics Labour Force Survey reveals that the youth unemployment rate for Nigerians aged 15 to 24 was 6.5 percent in the second quarter of 2024, while broader labor underutilization remains considerably higher, indicating widespread underemployment, irregular work, and informal employment.

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Although the updated labor survey methodology has yielded lower official unemployment figures compared to earlier estimates, labor economists warn that these figures do not fully reflect the extent of job insecurity. Many young Nigerians categorized as employed are involved in low-paying informal jobs, ride-hailing services, street trading, or short-term digital gigs that offer minimal income stability.

According to estimates from the International Labour Organization (ILO), informal employment continues to represent a significant majority of jobs in Nigeria, resulting in millions of workers lacking social protection, pensions, or stable income.

Analysts highlight that this situation clarifies why economic growth has not substantially alleviated poverty, despite favorable GDP statistics.

“The economy is expanding, yet the sectors that are propelling this growth are not generating jobs at the necessary scale,” stated economist and former NBS Statistician-General Yemi Kale, who has consistently cautioned that youth unemployment poses both an economic and national security threat.

The services sector, which accounts for over half of Nigeria’s GDP, has increasingly been influenced by telecommunications, finance, and digital services. Although these sectors are productive, they typically demand specialized skills and employ a smaller number of workers compared to agriculture or manufacturing.

Manufacturing, known for its ability to create significant employment opportunities, continues to face challenges due to high borrowing costs, inconsistent electricity supply, escalating logistics costs, and fluctuations in foreign exchange rates.

The Central Bank of Nigeria’s stringent monetary policy, aimed at controlling inflation, has also resulted in higher lending rates, making it more costly for businesses to expand and limiting their ability to hire more employees.

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Small and medium-sized enterprises (SMEs), which represent the majority of employment in Nigeria, continue to identify access to finance, excessive taxation, and infrastructure shortcomings as significant barriers to their growth.

Meanwhile, agriculture—the country’s largest employer—has been disrupted by insecurity, flooding, climate-related shocks and rising production costs, limiting its capacity to absorb unemployed youths.

The challenge is compounded by a growing mismatch between education and labour market needs. Employers increasingly report shortages of technical, vocational and digital skills even as graduate unemployment remains widespread.

Industry experts argue that stronger collaboration between universities and employers is necessary to align academic curricula with evolving workplace requirements.

Nigeria’s expanding digital economy has created new opportunities in software development, fintech, business process outsourcing and content creation. Yet experts believe these sectors alone cannot absorb the millions of young people joining the labour force annually.

Development economists maintain that sustainable employment growth will require accelerated industrialisation, increased investment in manufacturing, agriculture, renewable energy, construction and infrastructure.

The World Bank has similarly contended that Nigeria needs to create millions of productive jobs in the upcoming decades to match its swiftly increasing population and alleviate poverty.

Nevertheless, for many young Nigerians, the situation continues to involve extended job searches, underemployment, or migration in pursuit of better prospects.

Analysts caution that unless economic growth is paired with enhanced investment in labour-intensive industries, improved educational outcomes, superior infrastructure, and policies that promote private-sector job creation, GDP growth alone will have minimal impact on alleviating the unemployment challenges faced by Nigeria’s youthful demographic.

As Nigeria’s economic recovery gains traction, policymakers must shift their focus from the pace of GDP growth to the capacity of that growth to generate sustainable employment.