90% of Nigeria’s Workforce Engaged in Informal Sector, Says German Agency

•NBS: 90% of workers work in insecure environment

Onyebuchi Ezigbo in Abuja

The German International Development Agency – Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) has noted that there are more workers employed by organisations in the informal sector and in potentially unprotected work environment in Nigeria.

It cautioned that high underemployment rates were hindering the country’s progress.

Quoting the Nigeria Bureau of Statistics (NBS), GIZ- GmbH which is a German federal enterprise engaged in the implementation of Skills Development for Youth Employment – SKYE” in Nigeria stated that, “there is a high rate of people working in the informal sector in Nigeria and in a potentially unprotected work environment estimated to be at above 90 percent of the total workforce.”

Speaking at a 2-day conference organised by GIZ GmbH, a German federal enterprise with worldwide operations and held Monday and Tuesday in Abuja, Team Leader of GIZ SKYE, Dr. Detlef Barth, said there was a corresponding high rate of underemployment that results in frustration among youths in the country.

While speaking on the topic: “Addressing Labour Market Challenges through Delivery of Innovative Employment Services,” Barth said the conference aimed at adopting sustainable models drawn from best practices observed in other regions and establishing structured and sustainable working groups between ministries, private sector and international organisations on specific topics.

“I stand before you today with a sense of purpose and urgency, recognising the important role that innovative employment services play in addressing the challenges of Nigeria’s labor market.

“In Nigeria nearly two-thirds of the 220 million people are under the age of 25. According to a former Minister of Education the future of Nigeria, both as a nation and a key player on the African continent, depends on its youth.

“But high unemployment and underemployment rates hinder their progress. The Nigerian National Bureau of Statistics reported a youth unemployment rate of almost 54 percent in 2022.

“Also, the high rate of people working in the informal sector and therefore in a potentially unprotected work environment is estimated by the NBS to be at above 90 percent of the total workforce.

“This goes along with a high rate of underemployment. These are not mere numbers but human and social tragedies. Human capital is not utilised and a generation of frustrated young people might be the consequence,” he said.

The conference which sought to find innovative solutions to address the pressing challenges within Nigeria’s labour market was put together in collaboration with the Federal Ministry of Labour and Employment.

The GIZ SKYE programme aimed to use the conference as a starting point for a more youth and practice-oriented PES in Nigeria.

Barth, said the first objective of the conference was the exploration of best practices within Public Employment Services (PES), adding that there was need to investigate and identify optimal practices that can be adapted and implemented to the context in Nigeria.

In addition, he said second objective was to facilitate multi-stakeholder engagement and commitment at this conference and beyond.

“Our third objective centers on the presentation and discussion of strategic direction plans and overarching topics. We will delve into the National Employment Policy, the Youth Employment Action Plan, job matching in other countries and PES in relation to migration. This is crucial to understand PES from different angles to strengthen it,” he said.

Panelists at the conference stated that since search for employment opportunities was one key motivation for migration, it was necessary for appropriate information to be provided for those leaving the country and wanting to make hay way abroad.