COVID-19: Nigeria Q2 unemployment rate at 27.1%

Nigeria's latest second-quarter unemployment figures have been revealed, showing a rate of 27.1%, just a few points below South Africa's figure of 30.1%. This data is a clear indication of the impact of COVID-19 on sub-Saharan Africa's economy. As unemployment continues to be a significant issue in the region, experts are closely monitoring the situation and looking for solutions to address the challenges faced by the workforce. Ridle Markus, Africa Strategist at Absa Corporate and Investment Banking, provided insights into the current economic landscape. He highlighted the complexities of Nigeria's situation, emphasizing that the economy is expected to contract significantly this year. Estimates suggest a contraction of 3% to 4%, while the government anticipates a contraction of 1%. The recent Purchasing Managers' Index releases have also indicated deteriorating business conditions, further exacerbating the unemployment crisis. Markus underscored the need for government intervention to support the economy and stimulate growth. Despite the challenging circumstances brought about by the pandemic, policymakers are optimistic about the impact of monetary and fiscal policies in driving recovery. However, the road ahead may be challenging, with prospects of lower economic growth and persistent unemployment in the coming years. Looking ahead, Markus discussed the upcoming MPC meetings in Namibia, Zambia, Mozambique, and Botswana. In Zambia, where inflation is close to 15%, policymakers are expected to maintain the policy rate unchanged due to limited scope for further support. The country's currency has depreciated significantly against the US dollar, adding to the inflationary pressures. Namibia, Botswana, and Mozambique are also facing economic challenges, with modest levels of inflation. Namibia may follow South Africa's example and implement a 25 basis point rate cut, while Botswana and Mozambique could consider further policy rate adjustments to address their economic woes. The outlook for these countries suggests a contraction in GDP for the year, underscoring the need for proactive measures to mitigate the impact of COVID-19. As sub-Saharan Africa navigates the economic fallout of the pandemic, policymakers and experts are focused on implementing strategies to revitalize the economy, create job opportunities, and ensure sustainable growth. The challenges ahead are significant, but with concerted efforts and targeted interventions, the region can work towards recovery and resilience in the face of adversity.