The informal sector contributed to 62 percent of the total job losses caused by the COVID-19 pandemic last year, a new report by the National Bureau of Statistics (NBS) says.
The NBS said this is an indication that the pandemic hit the informal sector the most and had a huge impact on Nigeria’s workforce, pushing the unemployment rate to 33 percent.
During the pandemic, the report jointly produced by the United Nations Development Programme (UNDP) stated that 20 percent of the full-time workforce in Nigeria lost their jobs.
The report was generated from a study that assessed the impact of the COVID-19 pandemic on business enterprises in Nigeria and was released on Tuesday.
It stated that responses were gathered from about 3,000 businesses from the formal and informal sectors across major industries.
According to the report, the pandemic affected the nation’s workforce and caused an increase in the unemployment rate — moving from 27 percent to 33 percent between Q2 2020 and Q4 2020.
The report stated, “While there have been promising signs of recovery this year, COVID-19 has had an outsized socio-economic impact on Nigeria.
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“Businesses resorted to laying off employees to survive, and shutdowns of enterprises severed crucial livelihood lines for households that depended on them for income, coupled with the lack of new business opportunities and reduction in capital investment further limiting new job prospects.
“Prior to the COVID-19 outbreak, the median full-time staff strength of formal and informal enterprises stood at 12 and five, respectively.
“During the pandemic, these figures declined and stood at ten and four for formal and informal enterprises, respectively. Across the sample, this results in 20 percent of the initial full-time workforce losing their jobs during this period.
“Among the formal enterprises, this figure is slightly higher at 21 percent compared to 15 percent among informal enterprises.”
The report added that while 58 percent of businesses maintained staff strength, 28 percent lost up to 50 percent of their initial workforce, with the remaining 14 percent losing more than 50 percent of their initial workforce.
