Nigeria’s unemployment rate surges to 33.3%

Africa's economic landscape is facing significant challenges with rising unemployment rates in Nigeria and inflation concerns in Botswana. In a recent interview with Ridle Markus, Africa Strategist at Absa Corporate & Investment Banking, CNBC Africa discussed the latest economic data coming out of the region. Nigeria, Africa's largest economy, saw its official unemployment rate surge to 33.3% in the fourth quarter of 2020, up from 27.1% previously. The country's economy contracted by 1.8% last year due to the impact of the COVID-19 pandemic, leading to job losses particularly in the manufacturing and services sectors. Despite a recent uptick in oil prices, Nigeria's economic growth has been sluggish, with average growth rates hovering around 0.3% since 2016. Non-orthodox policy choices continue to pose challenges to the economy, including import restrictions and exchange rate fluctuations. The outlook for job creation in Nigeria remains bleak amidst ongoing security concerns and an uncertain economic environment. Meanwhile, Botswana's inflation rate rose to 2.4%, driven by increases in housing and utilities costs, as well as other miscellaneous items. Unlike some of its regional counterparts, Botswana's inflationary pressures were not primarily driven by food price hikes. The country is expected to return to its target inflation range of 3.3 to 6% by mid-year as demand remains weak and transportation costs remain subdued. In Nigeria, February's inflation figures came in at 17.3%, slightly higher than the expected 17.2%. Food shortages, currency depreciation, supply chain disruptions, and import restrictions have contributed to the inflationary trend in the country. While inflation remains a concern in some African markets such as Zambia and Nigeria, overall, central banks across the continent are managing the situation with cautious optimism. Namibia, a neighboring country, is also facing economic challenges with a contraction of nearly 8% last year. The country's central bank has forecasted a modest recovery of 2.6% this year, citing fiscal constraints and poor weather conditions as contributing factors. Namibia's economic woes mirror those of South Africa, with high government wage bills and subdued growth posing significant hurdles to recovery. The mining sector, a key contributor to Namibia's economy, struggled last year, further exacerbating the country's economic woes. With fiscal pressures mounting, Namibia's economic outlook remains lackluster, highlighting the need for sustained policy interventions and structural reforms to stimulate growth and create jobs. As African economies navigate the challenges brought about by the ongoing pandemic, a coordinated effort to boost productivity, enhance resilience, and foster sustainable growth will be crucial in driving the continent's economic recovery.