Employment and Job Creation in Nigeria: An Overview

INTRODUCTION

Nigeria, Africa’s most populous country, has a rapidly growing workforce, with over 200 million people and a median age under 20 years. Employment and job creation remain central to Nigeria’s economic development, social stability, and poverty reduction. However, despite the country’s abundant human capital and natural resources, unemployment rates have remained persistently high, especially among youth.

With an estimated population of over 220 million (2025), is Africa’s largest economy and most populous nation. Its labor force is expanding rapidly, with an estimated 70 million people currently active in the workforce and an annual addition of approximately 2.5 million new job seekers. Addressing unemployment and underemployment is critical for Nigeria’s socioeconomic stability and inclusive growth.

Current Employment Landscape

The Nigerian labor market is characterized by a large informal sector, where about 65-70% of workers are engaged in informal jobs lacking social protections. Formal sector employment is limited, and many jobs are low-paying or underemployed. The National Bureau of Statistics reported that unemployment in Nigeria reached over 33% in recent years, with youth unemployment even higher, hovering around 40%.

Key Challenges to Employment

Rapid Population Growth and Workforce Expansion: The young and growing population creates pressure for job creation that outpaces economic growth.
Skill Mismatch: Many graduates lack the technical and vocational skills demanded by the labor market.
Economic Volatility: Fluctuations in oil prices, Nigeria’s main revenue source, impact job creation in other sectors.
Informal Economy Dominance: Most Nigerians work in small-scale trading, agriculture, or informal services, which offer limited income growth and job security.
Insufficient Industrialization: Low levels of manufacturing and industrial development restrict formal employment opportunities.
Infrastructure Deficits: Poor power supply, transportation, and technology infrastructure hinder business growth and employment.

Insecurity and Instability: Conflicts and insecurity displace workers and disrupt economic activities.

Opportunities for Job Creation

Despite challenges, several sectors hold significant potential for employment generation:

Agriculture: Modernizing agriculture can create millions of jobs in farming, processing, and agribusiness.
Information and Communication Technology (ICT): Nigeria’s growing tech ecosystem offers jobs in software development, digital marketing, and startups.
Manufacturing: Expanding local manufacturing can absorb semi-skilled labor and reduce import dependence.
Creative Industries: Nollywood, music, and arts generate employment and contribute significantly to GDP.
Renewable Energy: Investments in solar and clean energy sectors offer emerging employment opportunities.
Entrepreneurship and SMEs: Supporting micro, small, and medium enterprises (MSMEs) can drive job creation and economic diversification.

Government and Stakeholder Initiatives

The Nigerian government has launched various programs aimed at boosting employment:

National Youth Service Corps (NYSC): Offers recent graduates a year of service with potential job placements.
YouWin!, N-Power, and Graduate Internship Schemes: Focus on youth empowerment, skills development, and entrepreneurship support.
Economic Recovery and Growth Plan (ERGP): Emphasizes diversification and job-rich growth.
Agricultural and Industrial Policies: Target job creation through modernization and industrialization.

The Way Forward

To effectively tackle unemployment and drive sustainable job creation, Nigeria must:

Invest heavily in education and vocational training aligned with market needs.
Promote economic diversification beyond oil to sectors with high employment elasticity.
Enhance infrastructure to support business growth.
Foster an enabling environment for startups and MSMEs through easier access to finance and regulatory reforms.
Encourage innovation and technology adoption across sectors.
Strengthen social protection and labor market policies to safeguard workers.

Conclusion

Employment and job creation in Nigeria remain both a challenge and an opportunity. With a youthful population ready to contribute, strategic investments, policy consistency, and multi-sector collaboration are vital to unlocking Nigeria’s full employment potential and ensuring inclusive economic growth.

CURRENT EMPLOYMENT SITUATION AND KEY STATISTICS

National Unemployment Rate:

According to the National Bureau of Statistics (NBS) Labor Force Survey Q4 2024, Nigeria’s overall unemployment rate stands at about 33.3%.

Youth Unemployment:

The youth unemployment rate (ages 15-35) is approximately 40%, reflecting a severe challenge as nearly 60% of Nigeria’s population is under 25.

Underemployment:
Many Nigerians are underemployed, often engaged in jobs below their skill level or part-time work without adequate income.

Informal Sector Employment:

Over 65% of Nigerians work in the informal sector, including agriculture, petty trading, and informal services, which lack job security and social protection.

Labor Force Participation Rate:

Estimated at around 55%, with women participating at a significantly lower rate than men (women ~44%, men ~65%)

3. CHALLENGES AFFECTING EMPLOYMENT AND JOB CREATION

a. Rapid Population Growth

Nigeria’s population growth (~2.6% annually) leads to a surge of young job seekers that the economy struggles to absorb.

b. Education and Skill Mismatch

Many graduates lack vocational and technical skills demanded by the labor market, leading to high graduate unemployment.

c. Economic Dependence on Oil

The oil sector contributes about 9% to GDP but accounts for less than 1% of employment, limiting job creation impact.

d. Infrastructure Deficits

Inadequate power supply, transport, and digital infrastructure increase costs for businesses, limiting expansion and hiring.

e. Security Concerns

Conflicts, kidnappings, and instability in regions like the North East and parts of the Middle Belt disrupt economic activities.

f. Regulatory and Business Environment Constraints

Bureaucracy, corruption, and policy inconsistencies deter investments needed for job creation.

4. SECTORAL FOCUS FOR JOB CREATION

4.1 Agriculture

Current Role: Agriculture employs about 35% of the labor force but remains largely subsistence-based.

Potential:

Modernization could create millions of jobs in farming, agro-processing, storage, logistics, and export.

The sector’s contribution to GDP is around 22%, with opportunities in value chain development.

Challenges: Low mechanization (<10%), poor access to finance, and post-harvest losses (~30%).

4.2 Information and Communication Technology (ICT)

Current Role: The ICT sector contributes about 15% to GDP and employs an estimated 1.5 million people directly and indirectly.

Opportunities:

Nigeria is Africa’s leading tech hub with a burgeoning startup ecosystem (over 700 active startups).

Jobs in software development, fintech, e-commerce, digital marketing, and data analytics are rapidly growing.

Support Needed: Increased investment, skills training, digital infrastructure expansion.

4.3 Manufacturing and Industrial Sector

Current Role: Manufacturing accounts for about 10% of GDP and employs roughly 5 million workers.

Opportunities:

Light manufacturing (food and beverages, textiles, cement) can absorb semi-skilled labor.

Industrial parks and special economic zones offer potential for cluster-based job growth.

Challenges: Power shortages, import competition, and lack of incentives.

4.4 Creative and Entertainment Industries

Current Role: Nollywood (film industry), music, fashion, and arts contribute over 4% to GDP.

Employment: The creative sector employs approximately 2 million people across production, distribution, and marketing.

Growth Drivers: Digital platforms, youth engagement, and global cultural export.

4.5 Renewable Energy

Emerging Sector: Solar, wind, and biomass energy investments are increasing, particularly off-grid solutions.

Job Potential: Estimated 100,000+ direct and indirect jobs over the next decade in installation, maintenance, and manufacturing.

4.6 Micro, Small, and Medium Enterprises (MSMEs)

Role: MSMEs contribute over 48% of GDP and employ about 70% of the workforce.

Challenges: Limited access to credit, lack of business development services, and regulatory hurdles.

Potential: With supportive policies, MSMEs can drive decentralized job creation and innovation.

5. GOVERNMENT AND STAKEHOLDER INTERVENTIONS

Programs and Policies:

N-Power: Youth empowerment through skills development and job placements. Has trained over 500,000 youths.

YouWin!: Grants for youth entrepreneurs, supporting over 10,000 startups.

Economic Recovery and Growth Plan (ERGP): Focus on diversification and employment generation.

Agricultural Transformation Agenda: Modernization and value addition for job creation.

National Social Investment Programmes (NSIP): Includes conditional cash transfers and skills acquisition.

6. The Way Forward: Recommendations

Invest in Technical and Vocational Education and Training (TVET): Align curriculum with labor market needs to close the skills gap.
Diversify the Economy: Accelerate growth in agriculture, manufacturing, ICT, and creative sectors.
Improve Infrastructure: Enhance power supply, transport, and digital networks to stimulate business growth.
Enhance Access to Finance: Expand credit facilities and financial inclusion, especially for MSMEs and youth entrepreneurs.
Create Enabling Business Environment: Simplify regulations, strengthen institutions, and ensure policy stability.
Promote Innovation and Technology Adoption: Support agri-tech, fintech, and digital startups.
Strengthen Social Protection: Support unemployed youth with targeted programs and safety nets.

Address Security Issues: Invest in peacebuilding and security to protect economic activities.

7. Conclusion

Employment and job creation remain Nigeria’s most pressing economic and social challenges. Addressing these requires coordinated efforts from government, private sector, civil society, and development partners. By focusing on strategic sectors and improving the enabling environment, Nigeria can harness its demographic dividend and achieve inclusive, sustainable economic growth.

POLICY BRIEF:

Enhancing Employment and Job Creation in Nigeria

Issue:

Nigeria faces a high unemployment rate of over 33%, with youth unemployment nearing 40%. Rapid population growth, skills mismatch, economic dependence on oil, infrastructure deficits, and insecurity continue to constrain job creation. The country’s largely informal labor market limits social protections and stable income generation, threatening economic growth and social stability.

Context

Nigeria’s labor force is expanding by approximately 2.5 million annually, driven by a youthful population.
Over 65% of workers are in the informal sector.
Key sectors like agriculture, manufacturing, ICT, and creative industries offer job creation potential but remain underdeveloped.
Existing government programs (N-Power, YouWin!, ERGP) have made progress but require scaling and coordination.

Key Challenges

Skills Gap: Mismatch between education outputs and labor market needs.
Economic Concentration: Over-reliance on oil revenues limits diversification.
Infrastructural Deficiencies: Power outages and poor transport hamper business growth.
Insecurity: Conflicts disrupt economic activities, especially in the North.
Limited Access to Finance: MSMEs and startups face credit constraints.
Regulatory Burdens: Complex business environment discourages investment.

Policy Recommendations

1. Strengthen Technical and Vocational Education and Training (TVET)

Revise curricula to align with market demands.
Expand apprenticeship and internship programs with private sector partnerships.

2. Promote Economic Diversification and Sectoral Development

Invest in modern agriculture and agro-processing to create rural jobs.
Support manufacturing clusters and special economic zones.
Foster ICT and creative economy growth through innovation hubs and funding.

3. Improve Infrastructure and Connectivity

Prioritize investments in stable electricity supply and transport networks.
Expand broadband and digital infrastructure nationwide.

4. Enhance Access to Finance for MSMEs and Startups

Establish youth-friendly credit facilities and guarantee schemes.
Encourage fintech solutions to improve financial inclusion.

5. Simplify Regulatory Frameworks and Improve Business Climate

Streamline business registration and licensing processes.
Strengthen anti-corruption measures and institutional transparency.

6. Implement Robust Social Protection and Labor Market Policies

Expand cash transfers and unemployment benefits linked to skills training.
Promote formalization of informal sector workers.

7. Address Security and Stability Issues

Invest in conflict resolution and community policing to safeguard economic zones.
Provide targeted support to displaced workers and vulnerable populations.

Actionable Plan

Goal	Action Steps	Lead Agencies	Timeline	Indicators
Enhance skills development	Revise TVET curricula; launch apprenticeship programs	Ministry of Education, Labor	1-3 years	% graduates with market-ready skills
Diversify economy	Fund agri-tech, manufacturing zones, and creative hubs	Ministry of Agriculture, Industry, ICT	2-5 years	Job creation rate in targeted sectors
Improve infrastructure	Expand power generation and distribution; upgrade roads	Ministry of Power, Transport	3-7 years	Reduction in power outages, transport costs
Expand MSME financing	Launch credit schemes; partner with banks and fintech	Central Bank, Ministry of Finance	1-2 years	Volume of loans disbursed to MSMEs
Streamline business processes	Digitize registration; reduce licensing time	Corporate Affairs Commission	1 year	Average business registration time
Strengthen social protection	Scale up cash transfers linked to training	Ministry of Humanitarian Affairs	1-2 years	Number of beneficiaries receiving support
Enhance security	Fund community policing; conflict mitigation programs	Ministry of Interior, Security	Ongoing	Reduction in conflict-related disruptions

Conclusion

Nigeria’s employment crisis requires urgent, coordinated policy action across sectors. Prioritizing skills development, economic diversification, infrastructure improvement, and an enabling environment for businesses will drive sustainable job creation and harness the country’s demographic dividend.

POLICY BRIEF:

HARNESSING THE ICT SECTOR FOR EMPLOYMENT AND JOB CREATION IN NIGERIA

Issue:

The ICT sector in Nigeria is one of the fastest-growing segments of the economy, contributing about 15% to GDP and generating roughly 1.5 million jobs. Despite this growth, challenges such as inadequate digital infrastructure, skills shortages, limited access to finance, and regulatory bottlenecks hinder the sector’s full potential to create sustainable employment.

Context

Nigeria’s ICT ecosystem includes startups, telecom operators, software developers, fintech companies, and digital content creators.
The sector has been pivotal in driving innovation, financial inclusion, and entrepreneurship.
Youth dominate the ICT workforce, offering a critical opportunity to address high youth unemployment.
Nigeria hosts over 700 tech startups, mostly concentrated in Lagos, Abuja, and Port Harcourt.
Digital transformation is a national priority under the Nigeria Digital Economy Policy and Strategy (2020–2030).

Key Challenges

Skills Gap: Shortage of qualified ICT professionals with advanced coding, cybersecurity, and data analytics skills.
Infrastructure Deficit: Inadequate broadband penetration, unstable power supply, and limited rural connectivity.
Access to Finance: Startups and SMEs face difficulty securing venture capital and credit.
Regulatory Environment: Complex and sometimes unclear policies on data privacy, cybersecurity, and digital taxation.
Limited Innovation Ecosystem: Need for more incubators, accelerators, and research partnerships.
Brain Drain: Talented ICT professionals migrate abroad due to better opportunities.

Policy Recommendations

1. Strengthen ICT Education and Skills Development

Integrate coding, data science, and cybersecurity in secondary and tertiary curricula.
Support vocational ICT training centers and online learning platforms.
Promote internships and mentorships linking students with tech firms.

2. Expand Digital Infrastructure and Connectivity

Invest in nationwide broadband expansion targeting underserved and rural areas.
Improve power reliability through renewable energy solutions for ICT hubs.
Encourage public-private partnerships for infrastructure development.

3. Facilitate Access to Finance for ICT Startups

Create government-backed innovation funds and grant programs.
Provide tax incentives for angel investors and venture capital firms investing in tech.
Promote fintech solutions to ease credit access for ICT entrepreneurs.

4. Streamline Regulatory Frameworks

Develop clear policies on data protection, cybersecurity, and digital taxation aligned with global best practices.
Establish a one-stop digital business registration platform.
Enhance enforcement mechanisms for intellectual property rights.

5. Foster Innovation and Research Ecosystems

Support the creation and scaling of tech incubators and accelerators.
Fund research collaborations between universities and industry.
Encourage participation in global tech forums and partnerships.

6. Implement Retention Strategies for ICT Talent

Develop competitive remuneration packages and career progression pathways.
Facilitate diaspora engagement programs to attract back skilled Nigerians.
Promote a conducive work environment including flexible work policies.

Actionable Plan

Goal	Action Steps	Lead Agencies	Timeline	Indicators
Enhance ICT skills and education	Revise curricula; fund vocational centers; promote internships	Ministry of Education, ICT Ministry	1-3 years	Number of certified ICT graduates; internship placements
Expand broadband and power	Partner with telecoms; invest in rural broadband and solar power	Ministry of Communications, Power	2-5 years	Broadband coverage percentage; power uptime in ICT hubs
Improve startup financing	Launch innovation funds; provide tax breaks; support fintech	Ministry of Finance, CBN	1-2 years	Volume of funds disbursed; startups financed
Simplify digital regulations	Draft clear ICT laws; create online registration portal	Ministry of ICT, NCC	1 year	Number of startups registered online; policy adoption
Promote innovation ecosystem	Support incubators and research; fund university partnerships	Ministry of Science & Tech	2-4 years	Number of startups incubated; research projects funded
Retain ICT talent	Design retention incentives; launch diaspora programs	Ministry of Labor, Diaspora Affairs	1-3 years	Rate of skilled worker retention; diaspora returnees

Conclusion

The ICT sector is a strategic driver of job creation and economic diversification in Nigeria. Targeted policies enhancing skills development, infrastructure, financing, regulation, and innovation will unlock its full potential, helping to reduce unemployment and empower Nigeria’s youth.

POLICY BRIEF:

UNLOCKING AGRICULTURE FOR EMPLOYMENT AND ECONOMIC GROWTH IN NIGERIA

Issue:

Agriculture employs about 35% of Nigeria’s labor force and contributes roughly 22% to GDP, yet remains largely subsistence-based with low productivity and limited value addition. Challenges like poor mechanization, inadequate infrastructure, limited access to finance, and post-harvest losses restrict its potential to generate sustainable employment and drive economic diversification.

Context

Nigeria’s population growth and rising food demand increase pressure on the agricultural sector to expand production and create jobs.
Agriculture provides livelihoods for over 70 million Nigerians, mostly smallholder farmers.
The sector has significant potential for value chain development in crops, livestock, fisheries, and agro-processing.
Government initiatives like the Agricultural Transformation Agenda and Anchor Borrowers Program aim to modernize agriculture and boost job creation.

Key Challenges

Low Mechanization and Technology Adoption: Over 90% of farming is manual, leading to low productivity and limited scale.
Inadequate Infrastructure: Poor rural roads, storage facilities, and unreliable power increase post-harvest losses (~30%).
Limited Access to Finance: Smallholder farmers and agribusinesses face difficulties obtaining credit and inputs.
Weak Extension Services: Insufficient training and advisory support limit adoption of best practices.
Market Access and Price Volatility: Farmers struggle with inconsistent prices and limited access to domestic and export markets.
Land Tenure Issues: Unclear land ownership discourages investment and long-term planning.
Climate Change Impact: Increased droughts and floods threaten crop yields and farmer livelihoods.

Policy Recommendations

1. Promote Mechanization and Technology Integration

Subsidize affordable mechanized tools and equipment for smallholders.
Support research and deployment of climate-smart and precision agriculture technologies.

2. Invest in Rural Infrastructure

Upgrade rural road networks and storage/processing facilities to reduce losses.
Expand rural electrification with renewable energy solutions to power agro-processing.

3. Improve Access to Finance and Inputs

Expand and deepen agricultural credit schemes with flexible terms.
Encourage partnerships with private sector input suppliers and agro-dealers.

4. Strengthen Agricultural Extension Services

Increase funding and capacity for extension agents.
Leverage ICT for digital advisory and farmer education platforms.

5. Enhance Market Systems and Value Chains

Develop farmer cooperatives and aggregation platforms to improve bargaining power.
Facilitate access to domestic and export markets through infrastructure and trade policies.

6. Reform Land Tenure Systems

Implement transparent and secure land registration and titling programs.
Promote inclusive land use policies encouraging youth and women participation.

7. Support Climate Adaptation and Resilience

Promote drought-resistant crops and sustainable farming practices.
Establish early warning systems and disaster relief mechanisms for farmers.

Actionable Plan

Goal	Action Steps	Lead Agencies	Timeline	Indicators
Increase mechanization	Subsidize equipment; promote tech adoption	Ministry of Agriculture, SMEs	2-4 years	% increase in mechanized farms; crop yields
Upgrade rural infrastructure	Build roads, storage, processing centers; rural electrification	Ministry of Works, Power	3-6 years	Km of roads built; reduction in post-harvest losses
Expand agri-finance access	Scale credit schemes; incentivize private sector lending	Central Bank, Ministry of Finance	1-3 years	Volume of agri-loans; # farmers accessing credit
Strengthen extension services	Recruit/train extension workers; develop digital platforms	Ministry of Agriculture	1-2 years	Number of farmers reached; platform usage
Improve market access	Support cooperatives; develop aggregation and export hubs	Ministry of Trade, Agriculture	2-4 years	Farmer incomes; export volumes
Reform land tenure	Implement land titling and registration systems	Ministry of Land and Survey	3-5 years	% of land formally titled; investments in agriculture
Enhance climate resilience	Promote climate-smart crops; establish early warning systems	Ministry of Environment, Agriculture	2-4 years	Adoption of climate-smart practices; crop losses due to weather

Conclusion

Agriculture remains a cornerstone of Nigeria’s economy and a vital source of employment. By prioritizing mechanization, infrastructure, finance, extension services, market development, land reform, and climate resilience, Nigeria can transform its agricultural sector into a vibrant engine for inclusive growth and sustainable job creation.