A recent Nigeria Country Diagnostic Note (CDN) by the African Development Bank (AfDB) reveals that 34.3 per cent of Nigerian workers, aged 15 and older, are classified as working poor, living below the poverty line despite being employed.
Published on Tuesday on the bank’s website, the document points out that many workers in Nigeria are stuck in poverty due to the prevalence of low-skilled and low-wage jobs. The working poverty rate hovered around 35 per cent between 2012 and 2022, with a slight increase to just above 35 per cent in 2020 due to the COVID-19 pandemic, before declining to 34.3 per cent in 2022. Youth were particularly affected, with a working poverty rate of 41.8 per cent in 2019.
The report highlights a decline in output per worker from an 8.7 per cent growth rate in 2013 to a decrease of 0.8 per cent in 2022. This decline in productivity, attributed partly to strong labour unions and skill mismatches, reflects economic challenges and suggests firms struggle to adjust their workforce during economic downturns.
Furthermore, approximately 60 per cent of employed Nigerians lack basic education, limiting their opportunities mainly to the informal sector and low-paying agricultural jobs. Only a small fraction of the workforce achieves higher education levels, exacerbating the situation. The report states that 41 per cent of workers are in low-skilled jobs, 28 per cent in medium-skilled jobs, and only 31 per cent in highly-skilled jobs.
Despite progress in reducing overall poverty from 62.2 per cent in 2009 to 40.1 per cent in 2023, the report indicates significant challenges remain. The poverty gap and severity remain substantial, with 82.9 million Nigerians living below the poverty line. Projections suggest poverty could increase due to factors like the COVID-19 pandemic, high population growth, and economic stagnation.
To eradicate poverty, the report suggests mobilizing up to N3.7 billion annually, focusing on educational enhancements and economic diversification. Nigeria’s high population growth, estimated at 3.5 per cent annually, exacerbates poverty and adds challenges, including rising unemployment, especially among youth. This underscores the vulnerability of Nigerians to falling into poverty when shocks occur.
