Nigeria’s unemployment rate has decreased to 4.3% in the second quarter of 2024, reflecting positive trends in the country’s labour market. According to the National Bureau of Statistics (NBS), this marks a drop from 5.3% in Q1 2024 and a recovery from 5.0% in Q3 2023.

The report reveals several key improvements: the Labour Force Participation Rate rose to 79.5%, up from 77.3% in the previous quarter, indicating higher workforce engagement. Additionally, the Employment-to-Population Ratio improved significantly, reaching 76.1% in Q2 2024, compared to 73.2% in Q1 2024, showing that a greater portion of the working-age population is now employed.

Self-employment continues to dominate the job market, with 85.6% of total employment attributed to this sector, up from 84% in the prior quarter. Informal employment also saw a slight increase, rising to 93.0%, underscoring the ongoing reliance on informal jobs in the Nigerian economy.

The unemployment rate in urban areas decreased to 5.2% from 6.0% in Q1 2024, while rural areas saw a more pronounced drop to 2.8% from 4.3%. This reflects the significant role of agriculture and informal activities in rural employment compared to the urban reliance on formal and service-based jobs.

Youth unemployment (ages 15–24) also improved, dropping to 6.5% from 8.4% in Q1 2024. However, the report highlights gender disparities in the labour market, with female unemployment at 5.1%, compared to 3.4% for males, suggesting a need for gender-targeted employment policies.

Additional data on labour underutilisation shows positive trends: time-related underemployment dropped to 9.2% in Q2 2024 from 10.6% in Q1, and overall labour underutilisation (LU2) decreased to 13.0% from 15.3%. Metrics for LU3 and LU4, which reflect potential labour force participation, also showed declines, reaching 5.9% and 14.5%, respectively.

Overall, the latest NBS report suggests a gradual but steady recovery in Nigeria’s labour market, with a notable reduction in unemployment and improvements in workforce engagement across multiple sectors.

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is expected to maintain its aggressive stance on inflation control as it convenes today for its final meeting of the year. This follows the trend set at the September meeting, where the MPC raised the Monetary Policy Rate (MPR) by 50 basis points to 27.25%, citing concerns over core inflation, increasing money supply, fiscal deficits, and rising food prices.

While headline inflation had shown signs of decline during the last MPC meeting, core inflation remained stubbornly high due to rising energy costs and other structural factors. CBN Governor Olayemi Cardoso acknowledged the federal government’s efforts to improve security in farming regions and noted their initiatives to address food supply shortages, such as the duty-free import window for food commodities. He also expressed optimism that the opening of the Dangote refinery would help reduce transportation costs and alleviate food price pressures in the short to medium term.

Despite these efforts, inflation is once again on the rise, prompting analysts to predict that the MPC will stick to its hawkish approach. Analysts at Afrinvest highlighted several challenges, including rising inflation, weaker Purchasing Managers’ Index (PMI) data, fiscal deficits, and expansion in money supply. The latest PMI data for October showed a dip, with the composite PMI falling to 49.6 from 50.5 in September, signaling a slowdown in economic activity. The contraction in the industry sector, particularly in food, beverage, and tobacco production, was notable, with rising production costs exacerbated by the depreciation of the naira.

Additional concerns include energy price hikes (+2.2% month-on-month), foreign exchange volatility, and increasing national debt, which has reached N134.3 trillion, about 52% of GDP. With projections indicating the national debt could surpass N150 trillion by 2025, these factors will weigh heavily on the MPC’s decision.

Analysts suggest that, given the persistent inflationary pressures, the MPC will likely raise the MPR by at least 25 basis points in today’s meeting, aiming to attract foreign investment and maintain a positive real interest rate. Meristem Securities also anticipates a 50 basis points hike to 27.75%, as the committee focuses on stabilizing the naira and controlling inflation while balancing fiscal challenges.

Overall, the MPC’s final meeting of the year will be crucial in determining the direction of Nigeria’s monetary policy in the face of escalating inflation and economic pressures.

The Federal Government’s electricity subsidy expenditure has skyrocketed to ₦1.91 trillion in the first 11 months of 2024, according to a recent report by the Nigerian Electricity Regulatory Commission (NERC).

The report also revealed that electricity distribution companies (Discos) collected ₦1.23 trillion in revenue between January and September 2024, surpassing the ₦1.08 trillion collected in 2023.

Subsidy Breakdown

An analysis of NERC’s monthly supplementary orders highlighted a consistent rise in subsidy spending despite eliminating subsidies for Band A customers. The ₦1.91 trillion incurred from January to November 2024 marks a 204.15% increase from ₦628.61 billion in 2023.

• Q1 2024: ₦633.30 billion
• Q2 2024: ₦380 billion
• Q3 2024: ₦518.55 billion (a 36.46% increase from Q2)
• October–November 2024: ₦380.06 billion, even amid frequent national grid collapses.

Despite removing Band A subsidies, which raised tariffs above ₦200/kWh, the Federal Government continues to cover the gap between cost-reflective tariffs and the actual end-user rates through subsidies.

Rising Generation Costs and Government Commitment

The cost of power generation surged from ₦63.8/kWh in January to ₦117.27/kWh in November 2024. According to Power Minister Chief Adebayo Adelabu, this increase has further strained the government’s budget, which allocated ₦2.9 trillion to subsidize the power sector in 2024. Subsidies now primarily cover generation costs payable to the Nigerian Bulk Electricity Trading Plc (NBET) by Discos.

The government’s policy aims to transition to cost-reflective tariffs while shielding less-privileged consumers. However, concerns remain as subsidies for Bands B to E accumulate due to non-payment by the government, as noted by Sunday Oduntan, Executive Director of the Association of Nigerian Electricity Distributors.

Improved Revenue Collection by Discos

Despite subsidy challenges, Discos recorded significant revenue growth in 2024, collecting ₦1.23 trillion between January and September, achieving a 79.34% collection efficiency. Monthly revenues showed steady improvement:

• January: ₦95 billion (₦130.92 billion billed)
• June: ₦150.86 billion (₦176.57 billion billed)
• September: ₦171.58 billion (₦225.80 billion billed).

With this trajectory, 2024’s revenue collections are set to surpass previous years, including ₦526.8 billion in 2020, ₦761.2 billion in 2021, ₦828.1 billion in 2022, and ₦1.1 trillion in 2023.

While electricity revenue collection is on the rise, the increasing subsidy obligations and higher generation costs pose significant financial challenges for the Federal Government, underscoring the urgent need for a sustainable tariff system.

The Dangote Petroleum Refinery has reduced the price of Premium Motor Spirit (PMS), commonly known as petrol, by 2%, lowering it from N990 to N970 per litre. This price adjustment, announced over the weekend, is part of the company’s initiative to appreciate Nigerians for their support.

Anthony Chiejina, Group Chief Branding and Communications Officer of Dangote Petroleum Refinery, highlighted the significance of this gesture in a statement, saying:

“As the year draws to a close, this reduction is our way of expressing gratitude to the Nigerian people for their unwavering support in realizing the refinery project. It also reflects our appreciation for the government’s backing, as we aim to enhance domestic enterprise for the benefit of all.”

Chiejina reassured consumers of the refinery’s commitment to delivering high-quality, environmentally friendly, and sustainable petroleum products. He also emphasized that the refinery is focused on increasing production to meet and exceed Nigeria’s fuel demand, thereby addressing concerns about supply shortages.

Meanwhile, oil marketers under the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have initiated negotiations with the $20 billion Dangote Refinery. Billy Gillis-Harry, Chairman of PETROAN, confirmed the discussions, noting the importance of clear terms for the business relationship.

“We are negotiating concrete terms, including agreed quantities, pricing, and logistics on a daily, weekly, or monthly basis. This ensures seamless operations while minimizing delays and high operational costs,” he stated.

In a related development, members of the Major Energy Marketers Association of Nigeria (MEMAN) have begun lifting petrol directly from the Dangote Refinery. This follows federal government approval, allowing marketers to bypass the Nigerian National Petroleum Company Limited (NNPCL) in the supply chain.

The Dangote Refinery’s price reduction and expanded distribution efforts signify its commitment to stabilizing Nigeria’s fuel market and supporting local enterprises.