The World Bank Group has cautioned that Nigeria and other developing economies could face a severe employment crisis in the coming years as millions of young people prepare to enter the labour market without sufficient job opportunities.
In a blog post published on its official platform, the Washington-based institution stated that demographic shifts across developing countries are set to become one of the most significant forces shaping the global economy over the next decade.
According to the bank, about 1.2 billion young people in developing countries are expected to reach working age within the next 10 to 15 years. However, current projections indicate that only about 400 million jobs are likely to be created within the same timeframe, leaving a potential shortfall of hundreds of millions of jobs.
The President of the World Bank Group, Ajay Banga, noted that while global discourse often centres on immediate crises such as geopolitical conflicts, technological disruptions and market volatility, structural factors like demographics, food security and globalisation trends may have deeper long-term consequences.
He described the emerging employment gap as not just a development concern but also an economic and national security issue, warning that failure to address it could fuel social unrest, irregular migration and instability, particularly in regions with rapidly expanding youth populations.
The bank observed that the issue received limited attention at recent global gatherings, including the World Economic Forum, where discussions were dominated by short-term geopolitical and economic challenges.
To mitigate the looming crisis, the World Bank said it is advancing a jobs-focused strategy anchored on three pillars: infrastructure development, business environment reforms and private-sector expansion.
The first pillar emphasises investment in both physical and human capital infrastructure, including electricity, transportation networks, healthcare and education systems. The bank cited a skills development centre in Bhubaneswar, India, which trains nearly 38,000 individuals annually through partnerships between government and private-sector actors, aligning training programmes with labour market demands.
Secondly, the institution stressed the need for predictable regulatory frameworks and transparent policies to encourage entrepreneurship and attract domestic and foreign investment. It noted that micro, small and medium-sized enterprises account for the majority of employment in developing economies and require supportive environments to scale.
The third pillar focuses on mobilising financing through the bank’s private-sector arms, offering equity investments, guarantees and political risk insurance to reduce investment uncertainties. As an example, the bank referenced a trade finance guarantee for Banco do Brasil, projected to unlock approximately $700 million in financing for small businesses, particularly in agriculture.
The World Bank identified infrastructure and energy, agribusiness, primary healthcare, tourism and value-added manufacturing as sectors with the highest potential to generate large-scale employment.
It further argued that addressing the jobs gap is not a zero-sum contest between developed and developing nations. By 2050, more than 85 per cent of the global population is expected to reside in developing countries, presenting significant opportunities for expanded markets, stronger trade partnerships and more resilient global supply chains.
The bank maintained that perceived and actual investment risks remain the primary barriers to capital inflows into developing markets, rather than a lack of viable opportunities.
“If we get this right, demographic change can become an engine of growth and stability,” the institution stated. “If we get it wrong, the world will continue reacting to crises that were visible years in advance.”
