The Group Chief Economist & Managing Director of Research and Trade Intelligence at Afreximbank, Dr Yemi Kale, has warned that rising youth unemployment in Nigeria is a time bomb and should be considered a national security threat.

Kale said this on Wednesday at the 2025 Vanguard Economic Discourse, themed ‘Nigeria’s Economic Outlook 2025: Hardship and Pathways to Sustainable Recovery’, held in Lagos.

According to the National Bureau of Statistics, the youth unemployment rate (ages 15–24) in the second quarter of 2024 dropped significantly to 6.5 per cent, compared to 8.4 per cent in Q1 2024.

The report read, “The unemployment rate is defined as the share of the labour force not employed but actively searching for and available for work. Unemployment is one of the components of labour underutilisation. The unemployment rate for Q2 2024 was 4.3 per cent, showing an increase of 0.1 percentage point compared to the same period last year.”

Speaking on Wednesday, Kale, who was a former DG of NBS, said, “We also need to tackle unemployment and underemployment, which is above 53 per cent, Nigeria’s demographic dividend risks becoming a demographic crisis. Each year, 4-5 million young Nigerians enter a labour market that isn’t creating jobs fast enough. This isn’t just an economic issue—it’s a national security threat.

“To address this, we need to invest in vocational and digital skills training tied to high-growth sectors. Expand credit and regulatory support for MSMEs and start-ups. Scale job-linked infrastructure projects in renewable energy, logistics, and agribusiness and incentivise private sector hiring through tax credits and wage subsidies.”

On the issue of food insecurity faced by about 25 million Nigerians, Kale fingered low productivity, insecurity in farming regions, climate shocks and floods, and inadequate infrastructure and market access.

“We need urgent interventions across the food value chain: rural road networks, cold storage, irrigation, security in farming belts, and better inputs. Solving this is not just about agriculture— it’s about survival, dignity, and national stability,” he averred.

Kale sounded a note of warning concerning the country’s fiscal sustainability and debt as the debt service-to-revenue ratio exceeds 40 per cent.

“This is a clear warning sign. While our debt-to-GDP ratio remains moderate at 34.2 per cent, our fiscal space is shrinking. Fuel subsidy removal was a critical step. But if those savings are not redirected into productive investments, we risk squandering public trust and worsening inequality. We must expand the tax base through digital tools and compliance enforcement. Prioritise concessional borrowing and debt-for-development swaps. Improve transparency in public spending and debt reporting. Coordinate more effectively across federal and subnational governments.

“As I bring this analysis to a close, the fundamental question before us is this: how do we move? Nigeria from merely coping with economic hardship to actively competing in a dynamic and unforgiving global economy? We have journeyed through the realities of structural imbalance, reform fatigue, and policy volatility. We’ve examined the impact of domestic and global shocks, drawn lessons from international success stories, and reflected on our own reform trajectory. And through it all, one conclusion stands out: the challenge is not the absence of ideas—it is the absence of execution.

“The solutions are not new. The evidence is overwhelming. What Nigeria has lacked is not insight but sustained political will, institutional discipline, and empathetic leadership that aligns reform with the realities of the people. It is time we stopped asking, what should we do? and instead asked, why haven’t we done it—and more importantly, how do we now do it decisively, consistently, and with integrity?”

The chairman of the event and president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Dele Oye, in his opening comments at the discourse, said that in light of American protectionist moves, it has become important for Nigeria and other African countries to leverage intra-Africa trade and free trade zones for economic growth.

Oye, who is also the Chairman of the Organised Private Sector of Nigeria, said, “As entrepreneurs, we are serial optimists; when we see a problem, we also look at the opportunities.

“Instead of focusing on where we are, if you look at other partners and trade with them and increase our opportunities. Then, there is investment infrastructure. It’s very difficult to completely develop the entire country; we try to use the free trade zones as an example, just like what China did.”

Drawing parallels with China’s success under Deng Xiaoping and Dubai’s development, Oye argued that free trade zones can serve as vital economic growth centres. He cautioned against introducing taxes in these zones, emphasising that it would discourage private capital development.

“The government currently owns only a small fraction of the 50 free trade zones in Nigeria, making them largely driven by private sector investment. Taxing these zones would be akin to the Federal Government asking private investors to pay school fees to the government, thereby undermining their competitiveness against international counterparts,” he argued.

Oye stressed the need to protect and foster industries that guarantee jobs, innovation, and national competitiveness.

A significant problem identified is Nigeria’s continued export of raw materials instead of increasing local processing.

Boosting local processing is crucial for deepening technology transfer, creating jobs at home, and doubling export value. Improving the overall business environment, investing in education and human capital, and promoting innovation and technology, particularly in sectors like fintech, are also essential for driving GDP growth, the NACCIMA president added.

Meanwhile, the Chief Executive Officer of the Nigeria Economic Summit Group, Dr. Tayo Aduloju, called for deeper engagement between the private sector and government to drive economic transformation in Nigeria.

Aduloju affirmed that real economic progress is made when both the private sector and government co-deliver on specific goals, with clear responsibilities and accountability mechanisms in place.

He explained, “In every case that Dr. Kale presented this morning in Brazil, Indonesia, and Malaysia. How these countries grew was that there was a consensus in the private sector and a consensus in government that we will co-deliver economic transformation.

“If we say today we want to transform the energy sector, the energy plan will have two sides: what government must do and what business must do, and accountability and responsibility mechanisms to check that everybody is doing what they are doing right.”