Social programmes’ failure to solve unemployment

THE National Bureau of Statistics (NBS), on Friday, August 14, 2020, released the statistics on unemployment for the second quarter (Q2) of 2020 after a long hiatus since the third quarter (Q3) of 2018.  The percentage of unemployed people stands at 27.1 per cent. The last report which was released in 2018 showed the rate at 23 per cent. Apparently, within 2 years, the unemployment rate in Nigeria rose by 4 per cent. This points to – among other things – the fact that President Buhari’s social and welfare programmes for the unemployed and less privileged, which are touted in various fora as a panacea to the perennial unemployment problem in Nigeria have not been effective. As part of his manifestoes in 2015, he promised to provide three million jobs yearly. In order to fulfill this promise, he rolled out the N-Power program, Conditional Cash Transfer Scheme (CCTS) and Special Public Works(SPW) programme among others. In corroborating the success of the social and welfare programmes, Mrs. Maryam Uwais, Special Adviser to President Buhari on National Social Welfare recently said that over 11.5 million people have already benefited directly from all the programmes and about 9 million others have benefited indirectly.

Some proponents might argue that government’s social programmes have greatly reduced unemployment rate thereby, faulting this fact and attributing the latest increase in unemployment rate to the ripple effects of Covid-19 pandemic. But looking at the statistics, instead of a consistent reduction in unemployment rate, a look at the unemployment data prior to the Covid-19 pandemic shows a steady rise in unemployment. According to the National Bureau of Statistics (NBS), unemployment rate rose steadily from 16.20% in the second quarter (Q2) of 2017 to 23.13% in the third quarter (Q3) of 2018. Going by the key indicators of rapid increase in unemployment rate, it is safe to admit that social programmes initiated by President Muhammadu Buhari since 2015, as plausible they seem have failed to reduce the unemployment rate. In the long run, the statistics clearly show that populist handouts and welfare programmes can’t bail the nation out of its unemployment trouble. Now, what is the way forward?

Luckily, about 53.57 per cent of Nigerians are between the ages of 15-64 years (working age). This is a huge pool of luck if optimally harnessed. The large population of “active youths” would yield optimal productivity through robust investments in education; at least 15 to 20 per cent budgetary allocation, exchange programmes, broadband and ICT expansion, investment in agriculture, technical and vocational training (informal education). Otherwise, the societal ills which we currently witness are just tips of the icebergs. If not well managed, crimes would thrive.  The Ministry of Education should endeavor to work out modalities for student/graduate exchange programmes – in which Nigerian tertiary institutions can partner with technologically driven educational institutions in the developed countries. The exchange programmes would equip technologically inclined Nigerian undergraduates and graduates with the foundational transferable skills,  which can be replicated back in Nigeria in bridging the deficient skills gap. Back home, the transferable  skills garnered through the exchange programmes would empower Nigerian graduates to manufacture sophisticated and research driven products. Human capacity doesn’t have immediate impact on the economy but, in the long run, the beneficial and exponential impact on the economy is worth the investment.

Human capacity development, enabling environment and business friendly policies are what the country needs to leave behind the “poverty capital of the world tag”.  Interestingly, Small and Medium scale Enterprises (SMEs) are key drivers of the economy which absorb Nigeria’s teeming population. Entrepreneurs spend hugely in generating electricity and face hurdles in transporting goods and services on vast deplorable roads. It is counterproductive when the government formulates unfriendly business policies and requests huge licensing fees coupled with excessive taxes.  With the unfavorable amendments to the broadcasting code by the National Broadcasting Commission (NBC) and the steady naira devaluation, Jason Njoku, the chief executive officer of IrokoTV, on Saturday, August 29, 2020, announced the sack of 150 workers and discontinued operations in Nigeria with main focus on North America and Western Europe markets. When SMEs are choked with taxes and unfavorable policies, they are forced to abruptly close operations – culminating in a surge in unemployment. The government should further address excessive taxes and abolish unfriendly business policies, grant tax relief programmes for start-ups, ease bureaucratic bottle-necks and provide grants/loans for SMEs’ expansion. If adopted diligently and consistently within ten years, all the suggested measures will ultimately increase the nation’s Gross Domestic Product (GDP) and undoubtedly greatly reduce the unemployment rate.

There is a limit to jobs that the government can create. Social and welfare programmes only provide cosmetic, temporary and make-believe relief while in reality, unemployment festers. Government’s job is to build enabling infrastructure and create a friendly environment for business, innovation and creativity to thrive.

Abayomi is a writing fellow at African Liberty.

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