KPMG has reported that Nigeria’s unemployment rate rose to 37.7 % in 2022 and is projected to reach 40.6 % in 2023, driven by a continual influx of job seekers. In its newly released “KPMG Global Economy Outlook Report, H1 2023,” the multinational consulting firm warned that unemployment will remain a major challenge because economic growth is slower than needed and the economy cannot absorb the 4–5 million new entrants each year. The firm noted that the National Bureau of Statistics recorded an increase in the national unemployment rate from 23.1 % in 2018 to 33.3 % in 2020, and KPMG estimates the rate climbed to 37.7 % in 2022 and will rise further to 40.6 % in 2023. The report also projects unemployment to reach 43 % in 2024, with inflation accelerating to 20.3 % in 2023 and 20.0 % in 2024.
According to KPMG, the incoming administration will inherit a deeply challenging environment characterized by fragile, slow economic growth and foreign‑exchange market difficulties. Government revenue remains insufficient to fund essential expenditures, leading to a high debt stock and substantial debt‑service payments. Nigeria’s economy ended the previous year with a GDP growth rate of 3.52 % in Q4 2022, up from 2.25 % in Q3 2022, averaging 3.10 % over 2022. The firm anticipates recovery in telecommunications, trade services, and the oil sector—thanks to measures addressing security issues—to support a forecasted 3 % growth in 2023.
Growth in 2022 was driven primarily by the non‑oil sector, as a steady recovery in household consumption boosted spending in finance and insurance, telecommunications, and transportation and storage services. While the non‑oil sector expanded by 4.84 %, the oil sector contracted by 19.22 %, largely due to worsening oil theft, pipeline vandalism, underinvestment, and other operational challenges. Consequently, oil output (including condensates) fell from 2.07 million barrels per day in Q1 2020 to 1.34 million barrels per day by Q4 2022. KPMG warned that a slowdown in the global economy in 2023 and its trade and financial‑flow implications would drag on Nigeria’s GDP. The report also cited the naira redesign policy introduced in Q4 2022 and Q1 2023 as a factor that negatively affected key non‑oil sectors such as manufacturing, trade, accommodation and food services, and transportation, further slowing overall GDP growth in 2023.
Headline annual inflation maintained an upward trend throughout 2022, reaching its highest level in almost two decades at 21.34 % by year‑end, with food inflation at 23.75 % and core inflation at 18.49 %. Persistent structural issues—such as insecurity, floods in key agricultural areas, and rising international food and energy prices following the Russia‑Ukraine conflict—combined with policy‑related bottlenecks to raise the cost of doing business. The expected removal of fuel subsidies and the 2023 fiscal bill are also likely to increase domestic prices. To combat rising inflation, the Central Bank of Nigeria raised the monetary policy rate by a cumulative 500 basis points in 2022 to 17.5 % and increased the cash reserve ratio from 27.5 % to 32.5 %. Despite these aggressive measures, inflation remains stubbornly high and is predicted to stay above 20 % in 2023 due to enduring structural and policy challenges.
KPMG concludes that growth will be driven by continued recovery in household consumption, sustained performance of the non‑oil sector, and a rebound in oil production. However, inflation is expected to remain elevated, fueled by persistent food‑supply shocks, foreign‑exchange illiquidity, and insecurity. The firm projects Nigeria’s GDP to grow at a relatively slow pace of 3 % in 2023, reflecting the typical slowdown in economic activity that accompanies periods of political transition.
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