The NBS recently released its latest Job Creation Survey. This defines the formal sector as consisting of establishments with ten or more employees, and is based on a sample of 5,000 firms across the 36 states of the federation. The data show that 187,200 jobs were created in Q3 2016, divided between 42,600 jobs in the formal sector and 144,600 jobs in the informal sector. As for the public sector, job losses were recorded for the fourth consecutive quarter, with 7,000 job cuts. This is a reflection of the general slowdown in the economy. In Q3 GDP contracted by -2.2% y/y.
There was a 20% increase in total job creation when compared with the previous quarter (which recorded 155,400 new jobs) but a y/y decline of -61%. Employment generation was still insufficient, given the steadily growing labour market.
In the formal sector, education lost its position as the leading source of new jobs. It recorded 16,500 job losses. As with other sectors across the economy, it has suffered from the economic downturn. The poor performance could also be linked to the difficulty in securing teachers’ salary payments (in both private and public schools) as well as the withdrawal of students due to the inability to keep up with fee payments.
Accommodation and food services accounted for 16% of new formal jobs. For food services, the new trend of sourcing local raw materials may have assisted in keeping the segment afloat.
Sources: CBN; FBNQuest Research
The job losses recorded in the public sector were not surprising since most state governments have struggled to pay salaries over the past several months. We gather that in some states an embargo has been placed on taking on additional labour into the public sector.