The paper examines the determinants of unemployment in Nigeria from 1981 to 2013, using the error correction model (ECM), and with ordinary least squares (OLS) method for robustness check. Results from the short-run and long-run regressions show that resource dependence and growth in private credit/GDP by banks significantly worsen labour unemployment, suggesting likely effects of resource-curse, high cost of financial intermediation cum limited credit to the real economy. Real GDP per capita, FDI, trade openness and exchange rate depreciation significantly reduce labour unemployment in Nigeria, whereas increasing industrial capacity usage intensifies it. Government capital expenditure aggravates unemployment in both estimated models, though not significantly, showing rent-seeking and prolonged deficit-financing. Inflation had a mixed outcome and was not significant in both short-run and long-run estimation. Key policy implications of the study include the need to efficiently manage our natural resources; deepen the domestic financial sector; enhance fiscal discipline; promote a favourable macroeconomic environment to attract the right kind of real-sector investment; and raising the economy's competitiveness in labour-intensive processes.

The paper examines the determinants of unemployment in Nigeria from 1981 to 2013, using error correction model (ECM), and with ordinary least squares method for robustness check. The study finds that output size (measured by GDP), foreign direct investment, exchange rate depreciation, and trade openness curb labour unemployment in Nigeria, while factors that worsen labour unemployment include financial development (measured by private credit), intensive capacity utilisation, and natural resource rent. Government capital expenditure, though not significant, increases unemployment rate in Nigeria, alluding to corruption and the tendency for public officers to divert funds to accumulate political capital, rather than socially productive ones. Inflation produces mixed outcome in both the short-run and long-run estimation. The study has confirmed that resource dependency, shallow financial depth, poor public expenditure management, and wrong production technology choice undermines unemployment in Nigeria, and thus attainment of inclusive growth. This calls for intensified efforts at financial sector liberalization drive to broaden the financial system, improve institutional quality, and adopting economic diversification strategy to reduce structural misalignments and attain a nondeclining inclusive growth in Nigeria.