Employment Intensity of Growth in Nigeria: Implication for Development
Employment Intensity of Growth in Nigeria: Implication for Development

Summary/Abstract: Nigeria in the recent past recorded high growth performance, averaging 6.5% between 2000 and 2017. The growth feat placed her among the fastest growing economies globally and the largest in Africa. This growth achievement presupposed that the volume of economic activities in the nation was large and thus should have contributed positively to employment generation. However, the reverse appeared to be the case as the level of unemployment remained high and increasing; moving from 18.8% in 2017 to 23.1% 2018 while combined unemployment and under employment rates rose from 40.0% in 2017 to 43.3% in 2018. This jobless growth situation shows the low labor absorptive capacity of the economy. This study therefore investigated the employment intensity of growth (EIG) in Nigeria between 1991 and 2018. It is based on the Okun’s law and employed quantitative technique of analysis, using elasticity procedure. Secondary data were adopted for the analysis and they were collected from the World Development Indicators and the Central Bank of Nigeria Statistical Bulletin. Five growth measures were used in addition to employment variable while the analysis was disaggregated into different periods and regimes. The findings revealed overwhelming negative EIG in the overall economy, which ranged between -0.001 and -1.64. During the military rule (1991-1998), EIG hovered between -0.002 and -0.15 while the civilian regime (1999-2018) had EIG ranged from -0.01 to -1.68. The implication of the findings is that growth has not engendered employment generation in Nigeria. One major reason for this is the dominance of the nation’s economy by oil, which employs an infinitesimal proportion of the labor force. Therefore, for growth to generate employment, it is important that the economy is diversified away from oil. In addition, entrepreneurship and skill development programmes should be encouraged while economic environment should be investor friendly to attract local and foreign investors.

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