Dr. Yemi Kale, who serves as the Group Chief Economist and Managing Director of Research and Trade Intelligence at Afreximbank, has cautioned that increasing youth unemployment in Nigeria poses a significant risk and must be regarded as a matter of national security.
Kale made these remarks on Wednesday during the 2025 Vanguard Economic Forum, titled 'Nigeria’s Economic Outlook 2025: Hardship and Paths to Sustainable Recovery', which took place in Lagos.
The National Bureau of Statistics reported that the youth unemployment rate (aged 15-24) for the second quarter of 2024 fell considerably to 6.5 percent from 8.4 percent in the first quarter of 2024.
According to the report, "The unemployment rate measures the proportion of the labor force that is jobless yet actively seeking employment and willing to work. This metric falls within the broader category of labor underutilization. In the second quarter of 2024, the unemployment rate stood at 4.3%, marking a rise of 0.1 percentage points from the corresponding time frame in the previous year."
On Wednesday, Kale, a previous DG of NBS, commented, "It is crucial to address both unemployment and underemployment, which exceed 53 percent in Nigeria. There is a risk that this could transform our potential demographic dividend into a demographic crisis. Annually, between four to five million Nigerian youth join a job market where employment opportunities aren’t growing at a sufficient pace. This situation poses not only an economic challenge but also represents a significant national security concern."
To tackle this issue, we should focus on investing in vocational and digital skill development programs aligned with rapidly growing industries. Increase financial assistance and regulatory backing for micro, small, medium enterprises (MSMEs) and startups. Develop employment-connected initiatives in areas like renewable energy, logistics, and agriculture processing, along with offering incentives to the private sector for hiring via tax breaks and wage subsidies.
Regarding the problem of food insecurity affecting approximately 25 million Nigerians, Kale identified low productivity, instability in agricultural areas, climate-related disasters such as floods, and insufficient infrastructure and limited market access as key factors.
“We need urgent interventions across the food value chain: rural road networks, cold storage, irrigation, security in farming belts, and better inputs. Solving this is not just about agriculture— it’s about survival, dignity, and national stability,” he averred.
Kale issued a caution regarding the nation's financial stability and debt levels, highlighting that the debt service-to-revenue ratio is above 40 percent.
This serves as an unmistakable red flag. Despite our current debt-to-GDP ratio being relatively low at 34.2 percent, our available fiscal room is diminishing. Eliminating fuel subsidies was indeed a crucial move. However, unless these savings are channeled towards fruitful investments, we could lose public confidence and exacerbate income disparity. It’s essential to broaden the tax net using digital technology and stricter adherence checks. Give priority to affordable borrowings and exchanges of debts for developmental projects. Enhance openness in governmental expenditures and debt disclosures. Work together more cohesively between national and local administrations.
As I conclude this analysis, the key question remains: How can we transition Nigeria from simply enduring economic challenges to effectively engaging in a fast-paced and rigorous global marketplace? Throughout our exploration, we've delved into issues like structural imbalances, weariness towards reforms, and fluctuating policies. We also looked at the effects of both local and worldwide disruptions, learned valuable insights from successful cases abroad, and contemplated our path toward implementing changes. Ultimately, what becomes clear is that the issue isn’t a lack of concepts; rather, it’s a deficiency in putting those concepts into practice.
The solutions aren't novel; the proof is clear. What Nigeria hasn't had isn't a lack of understanding but consistent political resolve, disciplined institutions, and compassionate leadership that matches reforms to the populace’s needs. Instead of questioning what actions we ought to take, it's crucial for us to ponder why these steps haven't been taken yet—more critically, how can we implement them firmly, persistently, and honestly?
Dele Oye, who serves as both the chairperson of the event and the president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, opened the discussion with remarks stating that due to recent protectionist actions taken by America, it has grown crucial for Nigeria and other African nations to capitalize on intra-African trade and free trade areas to foster economic development.
He, who is also the Chairman of the Organized Private Sector of Nigeria, stated, "Being entrepreneurs, we are inherently optimistic; whenever we encounter a challenge, we simultaneously seek out the possibilities."
Rather than concentrating on our current position, let's consider engaging with other partners and expanding our trading activities to boost our opportunities. Additionally, when it comes to investing in infrastructure, it’s extremely challenging to develop the whole nation entirely. We aim to utilize free trade zones as a model, similar to how China has done.
Comparing China’s progress during Deng Xiaoping’s era and Dubai’s rapid development, Oye contended that free trade zones could act as key drivers of economic expansion. He warned against imposing taxes within these areas, stressing that such measures might deter private investment and hinder growth.
"The government presently controls just a minor portion of the 50 free trade zones in Nigeria, which are predominantly fueled by investments from the private sector. Imposing taxes on these areas would be similar to the Federal Government requesting private investors to cover tuition costs for schools, thus diminishing their edge over foreign competitors," he contended.
Oye emphasized the importance of safeguarding and promoting sectors that ensure employment, drive innovation, and enhance national competitiveness.
One major issue highlighted is Nigeria's persistent export of raw materials rather than boosting local processing capabilities.
Enhancing domestic production is vital for intensifying tech transfer, generating more employment locally, and increasing export worth twofold. The NACCIMA president further emphasized that improving the general commercial climate, putting resources into education and workforce development, along with fostering innovation and technological advancement—especially within areas such as fintech—are key factors in propelling GDP expansion.
In the meantime, Dr. Tayo Aduloju, who leads the Nigeria Economic Summit Group as CEO, advocated for increased interaction between the private sector and the government to foster economic change in Nigeria.
Aduloju stated that genuine economic advancement occurs when the private sector and government collaborate effectively towards defined objectives, ensuring distinct roles and maintaining strong accountability measures.
He clarified, "For each example that Dr. Kale shared today from Brazil, Indonesia, and Malaysia regarding their growth, it was due to an agreement within both the private sector and the government to collaboratively drive economic change."
If we decide today that transforming the energy sector is our objective, then the energy plan should encompass two key aspects: actions required from the government and those needed from businesses. Additionally, there must be systems of accountability and oversight to ensure everyone fulfills their responsibilities correctly.
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