The National Bureau of Statistics (NBS) has revealed that 84% of Nigeria’s working population was self-employed in the first quarter of 2024, a decrease from the 87.3% recorded in the third quarter of 2023. This data comes from the Nigeria Labour Force Survey (NLFS) for Q1 2024.
The report shows a 3.3 percentage point decline in the self-employment rate, signaling a shift in the labor market. Conversely, wage employment increased by 3.3 percentage points to 16.0% in Q1 2024, compared to 12.7% in Q3 2023. This suggests that more Nigerians found traditional salary-paying jobs in early 2024, marking a slow but positive transition toward formal employment sectors.
The self-employment rate dropped in both rural and urban areas. In rural regions, the rate fell from 93.7% in Q3 2023 to 91.9% in Q1 2024, a 1.8 percentage point decrease. Urban areas saw a sharper decline, from 80.7% to 78.2%, indicating a reduction of 2.5 percentage points. These trends suggest a gradual reduction in self-employment nationwide, potentially due to improvements in wage employment or difficulties faced by small business owners.
Gender disparities in self-employment rates were also noted. Self-employment among women decreased by 2.3 percentage points, from 90.2% in Q3 2023 to 87.9% in Q1 2024. For men, the drop was slightly larger at 3 percentage points, falling from 82.9% to 79.9%. This suggests that men may have had better access to wage employment opportunities in certain sectors.
According to the NBS, “The proportion of self-employed individuals declined from 86% in Q1 2023 to 84% in Q1 2024. Survey findings show an increase in the share of employed persons engaged as wage earners from 12.7% in Q3 2023 to 16.0% in Q1 2024. The self-employment rate among women stood at 87.9%, while for men, it was 79.9%. In rural areas, the self-employment rate was 91.9%, compared to 78.2% in urban regions.”
Nigeria continues to contend with high levels of informal employment. The report indicates that 92.7% of the country’s employed population is involved in informal work, up slightly from 92.3% in Q3 2023. Informal employment, which lacks regulation and social protection, remains a dominant feature of Nigeria’s labor market.
Rural areas have a higher rate of informal employment (97.6%) compared to urban regions (89.0%), reflecting the dominance of agriculture and small-scale enterprises in rural economies, which offer limited formal employment opportunities. In urban centers, while the economy is more diversified, a significant portion of the workforce still operates informally, underscoring the challenges of securing formal jobs.
Educational attainment is a key factor in the likelihood of informal employment. Individuals with little or no formal education are far more likely to be employed informally, with 98.8% of those without education working in the informal sector. For individuals with post-secondary education, this rate drops to 67.6%, suggesting that expanding access to education could be crucial in reducing informal employment in Nigeria.
Overall, the report underscores a slight shift away from self-employment as a defining aspect of Nigeria’s economy. With the national unemployment rate rising from 5.0% in Q3 2023 to 5.3% in Q1 2024, the decline in self-employment may reflect a growing preference for wage employment or difficulties within the informal sector. However, self-employment remains a vital option for millions of Nigerians, particularly in rural areas, where formal employment opportunities remain scarce.
