Economics Project Topics

The Effect of Unemployment on Nigeria’s Economy and Promotion of Entrepreneurship Skills

The Effect of Unemployment on Nigeria's Economy and Promotion of Entrepreneurship Skills

The Effect of Unemployment on Nigeria’s Economy and Promotion of Entrepreneurship Skills


Objectives of the Study

This study has three specific objectives:

  1. To examine the impact of unemployment on the Nigerian economy, including its effects on economic growth, poverty, and social stability.
  2. To assess the effectiveness of entrepreneurship promotion programs in Nigeria and their contribution to job creation and economic development.
  3. To identify the key challenges and barriers that individuals face when attempting to start and sustain their businesses in Nigeria.



Conceptual Review

Unemployment in Nigeria

Unemployment in Nigeria is a complex issue with significant economic and social implications. To comprehensively address this problem, it is essential to understand how unemployment is defined, and measured, and how it has evolved. Additionally, it is crucial to recognize the concept of underemployment as a substantial aspect of the unemployment challenge.

The definition of unemployment in Nigeria is commonly framed as the state of being without gainful employment and is measured as a percentage of the workforce actively seeking employment (Abosede & Onakoya, 2021). This definition encompasses both open unemployment, where individuals are entirely without jobs, and underemployment, where individuals are engaged in jobs that do not fully utilize their skills and qualifications (Akinmulegun, 2022).

Historically, Nigeria has grappled with persistent unemployment challenges (Abubakar & Yahaya, 2021). The country has experienced fluctuating unemployment rates over the years, influenced by various factors such as changes in government policies, economic shocks, and population growth. These historical trends underscore the recurrent nature of unemployment as a critical issue that requires a sustained and comprehensive approach (Al-Tamini & Mohammad, 2019).

Underemployment constitutes a significant, yet often overlooked, dimension of the unemployment problem in Nigeria (Okolie, Anidiobu, & Ugwuanyi, 2018). Many Nigerians find themselves in jobs that do not fully utilize their skills and education due to the limited availability of formal employment opportunities. This phenomenon not only results in economic inefficiency but also contributes to the broader issue of disguised unemployment, where individuals are employed but not productively engaged (Edoko, Agbasi, & Ezeanolue, 2018).

Understanding the nuances of unemployment and underemployment is vital for the development of effective policies and strategies. It provides insights into the challenges faced by the workforce and the economy as a whole. By comprehending the historical trends and the pervasive issue of underemployment, policymakers can craft interventions that address the multifaceted dimensions of unemployment and, in turn, foster economic growth and social stability in Nigeria.

Entrepreneurship in Nigeria

Entrepreneurship in Nigeria plays a pivotal role in driving economic growth, job creation, and innovation. To explore its impact fully, it is crucial to understand the concept and characteristics of entrepreneurship, appreciate its significance within the Nigerian context, and recognize the various types of entrepreneurship, particularly the role of small and medium-sized enterprises (SMEs).

The concept of entrepreneurship encompasses the identification, creation, and management of opportunities in the pursuit of innovative solutions, often involving the establishment of new businesses or the introduction of novel products or services (Diandra & Azmy, 2020). Entrepreneurs are characterized by their proactiveness, risk-taking propensity, and a keen sense of market dynamics, which drives them to seize opportunities and navigate challenges.





This chapter provides a comprehensive overview of the research methodology adopted to investigate the impact of unemployment on the Nigerian economy and the promotion of entrepreneurship skills. The chapter outlines the research design, population of the study, sampling technique, sources and methods of data collection, data analysis procedures, validity and reliability testing, and ethical considerations. The selection of an appropriate research methodology is crucial to ensure the study’s rigour and validity.

Research Design

The research design chosen for this study is a quantitative survey research design. Quantitative research is suitable for this study as it allows for the collection of numerical data from a large sample size, making it feasible to draw statistically significant conclusions (Saunders, Lewis, & Thornhill, 2019). A survey design enables the systematic gathering of data from a broad cross-section of the target population, facilitating a more in-depth exploration of the research objectives and research questions. Additionally, the survey approach offers the advantage of standardized data collection, which allows for statistical analysis to establish relationships between variables and provide a comprehensive understanding of the research problem (Bell, Bryman, & Harley, 2019).

Population of the Study

The target population for this study comprises individuals residing in Nigeria who are actively seeking employment opportunities or engaged in entrepreneurial activities. The justification for this population selection is rooted in the pressing issue of unemployment in Nigeria and the significant role of entrepreneurship in addressing this challenge. With Nigeria’s large and diverse population, studying individuals actively involved in seeking employment or entrepreneurial ventures provides valuable insights into the study’s objectives. Given the vast number of potential respondents, a sample of 1,200 individuals was deemed appropriate to provide a representative dataset for analysis (Charmaz, 2016).



Data Presentation

Table 4.1 presents the distribution of questionnaires in your study, showing that 104 out of 120 questionnaires were returned and completed, which accounts for 86.7% of the total responses. In contrast, 16 questionnaires were not returned or remained incomplete, representing 13.3% of the total. These results indicate a relatively high response rate, with the majority of participants actively engaging with the survey. The completion rate of 86.7% suggests a strong willingness among respondents to contribute to the research, which enhances the reliability and validity of the study findings. The 13.3% non-response rate is within an acceptable range for survey research, and the data collected from the completed questionnaires can still provide valuable insights into the research objectives.

The high response rate can be attributed to the effectiveness of the data collection process, the clarity of the questionnaire, and the willingness of the participants to share their views on the subject matter. It indicates a level of engagement and interest in the research topic, which bodes well for the study’s overall quality. However, it is important to acknowledge the 13.3% non-response rate, which could be due to a variety of factors, such as time constraints, disinterest, or technical issues. While this rate is relatively low, it’s essential to consider potential non-response bias when interpreting the findings, as those who did not complete the survey might have different perspectives from those who did. Overall, the distribution of questionnaires demonstrates a strong response rate, underlining the significance of the collected data for the study.



Summary of Findings

The findings from this study provide valuable insights into the complex relationship between unemployment, entrepreneurship, and various economic and social factors in Nigeria. The study aimed to explore how unemployment impacts the Nigerian economy, the effectiveness of entrepreneurship promotion programs, and the challenges faced by individuals in starting and sustaining businesses. The study surveyed 104 respondents and used various statistical analyses to derive meaningful conclusions.

The first research question of this study focused on understanding the impact of unemployment on the Nigerian economy. Respondents were asked to express their opinions on whether high unemployment rates in Nigeria lead to reduced consumer spending, decreased government revenue, and social unrest.

Table 4.5 reveals that a substantial number of respondents, 67.3%, “Strongly Agree” or “Agree” that unemployment leads to reduced consumer spending, negatively impacting the Nigerian economy. This underscores the widely held belief among respondents that unemployment has a detrimental effect on consumer spending, which can subsequently affect economic growth.

In Table 4.6, the majority of respondents, 73.1%, “Strongly Agree” or “Agree” that high levels of unemployment in Nigeria lead to decreased government revenue, hindering economic growth. This consensus among respondents highlights the potential economic consequences of unemployment on government revenue and overall economic development.

Furthermore, Table 4.7 indicates that 68.3% of respondents “Strongly Agree” or “Agree” that unemployment contributes to social unrest and instability, which can adversely affect the economy. These findings suggest that respondents recognize the broader societal implications of unemployment, including potential threats to social stability and economic growth.


In conclusion, the findings of this study provide crucial insights into the intricate dynamics of unemployment, entrepreneurship, and their repercussions for the Nigerian economy. Through the analysis of data obtained from 104 respondents, the study aimed to assess and verify three specific hypotheses, each shedding light on a distinct facet of the overarching issue.

Hypothesis 1 posited that the impact of unemployment on the Nigerian economy is significantly negative, affecting economic growth, increasing poverty levels, and contributing to social instability. The results of the one-sample t-test revealed a mean score of 95 for this hypothesis, significantly above the assumed mean of 0. This indicates that respondents overwhelmingly recognized the adverse effects of unemployment on economic growth, poverty rates, and social stability, aligning with existing literature.

Hypothesis 2 suggested that entrepreneurship promotion programs in Nigeria significantly contribute to job creation and economic development. The analysis of the data yielded a mean score of 92.67, well above the assumed mean of 0, which validates this hypothesis. The respondents acknowledged the positive role of entrepreneurship programs in fostering job opportunities and driving economic growth, affirming the effectiveness of these initiatives.

Hypothesis 3 centred on the challenges and barriers faced by individuals in Nigeria when initiating and sustaining businesses. The mean score of 82 obtained in the study provides empirical support for this hypothesis. Respondents recognized the considerable hurdles entrepreneurs face in Nigeria, including skill gaps and the absence of entrepreneurship-specific education and training.

In summary, the empirical results substantiate the significance of addressing unemployment and promoting entrepreneurship in Nigeria. High unemployment rates adversely affect economic growth, contribute to poverty, and lead to social instability. Entrepreneurship promotion programs and government policies significantly contribute to job creation and economic development, aligning with the aspirations of policymakers.


Based on the findings and conclusions drawn from this study, here are six recommendations for addressing unemployment and promoting entrepreneurship in Nigeria:

  1. Enhance Entrepreneurship Education: It is essential to develop and implement robust entrepreneurship education programs at various educational levels. This includes primary, secondary, and tertiary institutions, to equip individuals with the skills and knowledge necessary to succeed as entrepreneurs. Collaboration between academic institutions and industry experts should be encouraged to ensure the relevance and practicality of the curriculum.
  2. Strengthen Government Policies: Nigerian policymakers should continue to support and expand policies that promote entrepreneurship. This includes providing incentives, tax breaks, and regulatory frameworks that foster a favourable environment for startups and small businesses. Government initiatives should also prioritize the creation of employment opportunities, particularly for young and educated individuals.
  3. Access to Finance: Access to finance is a significant hurdle for aspiring entrepreneurs in Nigeria. Financial institutions should develop tailored financial products for entrepreneurs and small businesses, making it easier for them to obtain loans and access capital. The government can also facilitate financial inclusion by collaborating with financial institutions to offer low-interest loans to budding entrepreneurs.

Contribution to Knowledge

This study significantly contributes to the existing body of knowledge in the fields of unemployment and entrepreneurship, particularly in the context of Nigeria. First and foremost, it sheds light on the intricate relationship between unemployment and entrepreneurship, highlighting the pivotal role that entrepreneurship can play in addressing Nigeria’s persistent unemployment crisis. By empirically demonstrating the positive impact of entrepreneurship development initiatives and supportive government policies, this study provides valuable insights into effective strategies for reducing unemployment, thus adding to the knowledge base of policymakers and researchers.

In summary, this study offers fresh insights into the complex relationship between unemployment and entrepreneurship, providing evidence-based recommendations for fostering entrepreneurship and reducing unemployment in Nigeria. It underscores the significance of entrepreneurship education, government support, access to finance, and skills development in addressing these intertwined challenges, thereby enriching the existing body of knowledge in this critical area of economic and social development.


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