Why Are Nigerian Companies Laying Off Workers? CBN Report Shows

The Central Bank of Nigeria’s (CBN) recent Purchasing Managers’ Index (PMI) report for July 2024 shows a worrying trend in the job market, with the Composite Employment Index falling for the seventh month in a row.

Although the index slightly rose to 48.7 points from June’s 48.3 points, it still shows that fewer people are being hired across many sectors.

The report pointed out that 18 different industry sectors saw a drop in jobs, with the Printing & Related Support Activities facing the largest decrease. On the other hand, the Petroleum & Coal Products sector saw some job growth, showing that the impact on employment varies widely among different industries.

Despite some areas showing improvement, the overall situation remains challenging for maintaining or growing the workforce due to economic pressures.

 Specific Sector Performance

In the industrial sector, employment dropped, as shown by the employment index falling to 47.0 points. This sector includes industries like printing and metal production, which saw large decreases in jobs.

 The service sector did not see much change, with employment levels staying stable at 50.0 points, although results varied widely between different service industries.

 In agriculture, job numbers also decreased, with the employment index dropping to 47.8 points, mainly due to big losses in fishing, fish farming, and livestock.

 Economic Conditions and Future Expectations

While the overall economic health of manufacturing, services, and agriculture showed a bit of improvement, it wasn’t enough to stop job losses. The report suggests that recovery will be slow, the a need for policies that create jobs and help industries that are struggling the most. 

The latest statistics from the National Bureau of Statistics (NBS) also show that Nigeria’s unemployment rate went up to 5.0% in the third quarter of 2023, from 4.2% in the quarter before. Urban areas had a higher unemployment rate of 6.0% compared to 4.0% in rural areas.

Overall, 79.5% of people were either working or looking for work, a slight drop from the previous quarter, with men slightly more likely to be in the workforce than women.