The nation’s unemployment rate leaves no room for cheers. It is the trauma of youths, the nightmare of parents and the stigma of the government. The figures get burgeoned yearly because, according to the National Bureau of Statistics (NBS), about 1.8 million Nigerian graduates join the labour market annually, yet the available opportunities for job placement keep shrinking.
The unemployment rate has been on a consistent and persistent spiraling over the years. According to the NBS, in 2000, it was 13.1 per cent. It rose to 13.6 per cent in 2001 and came down to 12.6 per cent in 2002. But it was a temporary breather because the rate climbed up to 14.8 per cent in 2003. It fell to 13.4 per cent in 2004 and fell further to 11.9 per cent in 2005. However, since 2006, unemployment rate maintained an unflagging fly for a long while. In 2006, it was 12.3 per cent, moving up to 12.7 per cent in 2007 and 14.9 per cent in 2008. It was 19.7 per cent in 2009, rising to 21.1 in 2010 and 23.9 per cent in 2011. After reaching that crescendo, it came down for a while.
In the second quarter of 2015, it was 8.2 per cent. It moved up to 9.9 per cent in the third quarter and 10.4 per cent in the last quarter of the year. At the end of the first quarter of the current year, it stood at 12.1 per cent, moving up to 13.3 per cent midyear.
The bureau, in its unemployment report at the end of the second quarter of 2016, noted that the number of people that were unemployed or underemployed increased from 24.4 million as at the end of the first quarter to 26.06 million persons.
According to the report, “The number of underemployed in the labour force (those working but doing menial jobs not commensurate with their qualifications or those not engaged in fulltime work and merely working for few hours) increased by 392,390 or 2.61 per cent resulting in an increase in the underemployment rate to 19.3 per cent in Q2 2016 from 19.1 per cent in Q1 2016.”
Although rising unemployment rate is a global phenomenon, experts are of the view that it has become the albatross of Nigeria because of the penchant of job seekers, their sponsors, as well as the government to overlook the micro, small and medium enterprises (MSMEs) for the large corporations when it comes to seeking employment.
As observed by the World Bank in one of its 2009 publications, the informal sector employs two-thirds of the global workforce.
But the current administration seems to take the issue of leveraging MSMEs to create employment opportunities seriously as it has been able to secure $1.3billion to kick start the Development Bank of Nigeria (DBN), whose responsibility will be the provision of finance for small and medium scale businesses.
Speaking about this recently, the Finance Minister, Mrs Kemi Adeosun, said as one of the takeaways from the country’s participation at the recently concluded World Bank/IMF meetings in Washington, Nigeria was able to secure the commitment of the World Bank and its group with the pledge to release $1.3billion seed money for the take off of the bank without delay.
The minister explained that as a follow up to that commitment, the ministry was already in the process of recruiting the top management staff of the bank, adding that the bank is billed to take off early 2017.
Explaining the rationale behind the establishment of yet another specialized bank despite the existence of the Bank of Industry and the Bank of Agriculture, the minister said, “It is very important because it is going to provide money for MSMEs and for Nigeria. That is really important because 50 per cent of our GDP is made up of small companies. These are small size companies, petty traders and other small operators. So, finding how to make money available to them is really an important way of getting out of the challenges we currently face. So getting DBN off ground is a big priority for us and we have set ourselves a very tight deadline.”
She explained that the intention of the government is to empower the existing MSMEs so that they will be able to employ more people. “We also hope to see more MSMEs come on stream to join the already existing ones. The more of these we have, the less our worries about unemployment will be because they naturally generate employment opportunities.”
Speaking about the genesis of the bank, Adeosun said, “Although the Development Bank of Nigeria was conceived about three years ago, as good as the project is, we haven’t got anywhere. Not much was done by the previous administration with respect to getting it off the ground. So, when we got to the World Bank/IMF meeting, we said, ‘look what are the bottlenecks?’ Fortunately, we have been able to solve some of the problems and we are ready to go now.”
Speaking on the intention of the government to establish the bank, an entrepreneur, Mr. Jide Lawson, chief executive of Afdab Nig Ltd, agreed with the minister that the major hurdle that many small scale businesses find difficult to cross is finance.
“While it is true that finance is not the only problem, it is the most critical problem for them,” he said. “This is because the regular banks do not understand the peculiarities of MSMEs. In the same vein, the BoI does not work for the small scale businesses because the conditions are too stringent. So, having a bank that is specifically targeted at MSMEs will be helpful to them and hopefully change the trend of the high mortality rate among MSMEs.”
He, however, expressed the hope that the bank would provide a level playing field for those who might want to take its facilities.
“That is a major issue in this country,” he noted. “The government comes up with a good initiative but those saddled with the implementation thwart the plan through their own selfishness. The government should monitor the bank to ensure it delivers on its mandate,” he said.
Also speaking on the matter, Dr Austin Alloysius, an economist, lauded the move to establish a bank for MSMEs, adding that the country’s economic growth is directly proportional to the success rate of its MSMEs.
He, however, urged the Federal Government to incorporate aspects of the National Industrial Revolution Plan (NIRP) into the scheme.
He explained, “The essence of the NIRP is to increase the capacity of big companies and to empower MSMEs to generate employment and create wealth.”
He added, “The idea is to move up the value chain that will increase the value and, of course, you move up in terms of your contribution to the global trade. Incorporating the NIRP in the plan to enhance the finance of small scale operators will increase their capacity to look beyond the immediate environment and aim to be global players. It will also increase their capacity to create employment opportunities. That is the next thing for us as a country and the time to start the journey is now. We need to enhance the capacity of every business operator in the country to earn foreign exchange and that will not happen until they start thinking global.”