Services sector holds key to nation’s economic growth —Report

THE nation’s  services sector has been identified as ‘critical’ if the present economic challenge  and  the increasing number of unemployment being faced in the country are to be addressed, a new report  recently released by professional Services firm, PwC Nigeria, has said.

The report titled “Structural transformation and jobless growth in Nigeria” believes that  while Nigeria has recorded considerable growth in major sectors, such as agriculture and manufacturing, employment generation by these sectors has been poor.

The services sector, which has the highest employment elasticity, according to PwC’s analysis, is capable of delivering high productivity jobs with great potential for income generation and poverty reduction.

The Report however believes  that unlocking this potential in the service sector will require keen investment in business environment reforms, which are necessary to improve the ease of doing business, sustain macroeconomic stability, and attract investments.

“In specific terms, improving human capital development, providing enabling infrastructure and intellectual property rights are necessary to drive growth and productivity in the services sector,” the Report says.

According to Partner and Chief Economist at PwC Nigeria, Dr. Andrew S Nevin, “High unemployment rate has remained a huge socio-economic challenge for Nigeria in the last decade, despite economic growth. Data from the National Bureau of Statistics puts Nigeria’s unemployment rate at 18.8 per cent as at the third quarter of 2017.

ALSO READ: Housing loan scheme will give succour to public servants ―Dogara

“Our findings show that between 2010 and 2017, average job growth was 1.6%, weaker than labour force growth of 3.9%. To reduce the unemployment rate, we estimate that employment growth of at least 4-5% is required. This would translate to at least 3 million new jobs annually. Achieving this will require implementing policies that will deliver inclusive growth and engender a productive labour force is imperative,” he stated.

The report  also notes that while industrialisation in most advanced countries followed a three-stage process of agriculture, industry, and services, Nigeria has tended to develop along the line of India, where structural changes boosted growth and employment through the expansion of high productivity activities within the services sector, particularly, Information Technology and Business Process Outsourcing services.

Services sector jobs, Dr. Nevin says,  require a wide range of skills from artisans in traditional services, to ICT experts in modern services. Without higher productivity in both segments, the potential of services to drive employment will be unrealised.