Sulaimon Olanrewaju writes on the rising unemployment in the country and government’s efforts to stem the tide.
With the unemployment rate at 33.3 per cent and the population at over 200 million, the number of unemployed Nigerians is over 66 million. That is more than the population of Ghana (31.07 million), Cote D’Ivoire (26.38million) and Togo (8.279 million) put together.
According to data sourced from the National Bureau of Statistics (NBS), unemployment rate has been on a steady rise since the first quarter of 2015. In Q4 2014, it was 6.2 per cent and rose to 7.54 per cent in Q1 2015. In Q2 2015, it was 8.19 per cent from where it moved to 9.9 per cent in Q3 2015 and 10.44 per cent in Q4 2015. In Q1 2016, it was 12.09, Q2 2016, it was 13.32 per cent, rose to 13.88 per cent in Q3 2016, closing the year at 14.23 per cent in Q4.
In Q1 2017, unemployment rate rose to 14.44 per cent, moved to 16.18 per cent in Q2, rose to 18.8 per cent in Q3 and 21.83 in Q4. In the first quarter of 2018, Nigeria’s unemployment rate was 21.8 per cent. In Q2, it was 22.73 per cent and 23.13 per cent in Q3.
The NBS did not publish the unemployment rate for six quarters spanning the last quarter of 2018 and the first quarter of 2020. The unemployment rate for Q2 2020 was 27.1 per cent and 33.28 per cent in Q4 2020.
The nation’s unemployment figures have been on the rise partly because yearly, tertiary institutions churn out fresh graduates without any provision made for their absorption into any of the nation’s sectors. Four, five and even six years after graduation with a good result, many Nigerian graduates are still roaming the streets in search of the ever receding employment opportunities. It is the hopelessness and helplessness of their situation that drive many of them to criminal activities. The nation’s rising unemployment rate is the major fuel for the insecurity situation the country is currently enmeshed in. Crime in the country has gone hi tech because many of those engaged in it are highly educated.
Causes of unemployment
Faulty education system
Graduate unemployment was unheard of in the past. At a point in the history of this country, before graduating from the university or the polytechnic, there was an assurance of employment for the Nigerian undergraduate. This was the time when corporate organisations would storm the few campuses in the country then to offer employment to graduating students. That sounds aeons ago. With the experience of the current generation of university graduates, to them this has a ring of a cock and bull story.
Tracing the history of the current crisis, Kester Ojokheta, a Professor of Open, Distance and E-Learning, University of Ibadan, said in pre-colonial Nigeria, emphasis was on technical and vocational training. “That was the period we call the traditional education system. At that time, the child was apprenticed to a competent practitioner, from whom he learnt the practice. When the colonialists came, there was a shift from technical education to liberal education. That was when we started having graduates in Arts and Social Sciences who do not have any specific skill. With the embrace of liberal education, all vocational centres went down.”
He added that eventually the nation started producing more graduates in liberal education than the system could absorb. This glut resulted in graduates being unemployed, a situation that gets worse each succeeding year with the yearly increase in the number of unemployed graduates.
Hostile economic environment
But just as the mismatch between industry requirement and skills of graduates result in unemployment, so has the hostile economic environment led to a number of young graduates being left in the unemployment lurch. Many of the manufacturing companies in the country are operating far below their installed capacities because they, in most cases, have to source their own electricity, water and other amenities that companies in other countries take for granted. All of these additional costs increase their cost of production and as a result their prices cannot compete with imported items. The effect of this is that while imported items are cheap, the locally produced ones are comparatively expensive. The price differentials force Nigerians to go for imported items. This has led to local companies not being able to produce at maximum capacities with the effect that many of them have been unable to employ as many hands as they would have had to had they been producing at maximum capacity.
While commenting on the high cost of diesel and energy recently, the chairman of Kwara/Kogi branch of the Manufacturers Association of Nigeria (MAN), Bioku Rahmon, said unless the government quickly attended to the energy crisis it would result in unemployment and mass closure of companies.
The inability of the manufacturing sector and the private sector generally to employ many Nigerian jobseekers have a telling effect on the nation. The reason is that there is a limit to the number of people that the government can employ. Unlike the private sector that can expand its operation and thereby increase its workforce, the business of government is largely administrative and it hardly expands. This means that the capacity of government at all levels to employ is restricted. So, the private sector is really the one that has unlimited ability to offer employment opportunities. But when the sector is incapacitated as a result of a number of factors, the chance of many getting employed becomes very dim.
Underdeveloped SMI
Just as the manufacturing sector is suffering, so is the small and medium industries (SMI) sector. In other climes, this sector is a major employer of labour. In North America and Europe, the contribution of SMIs to the development of countries in these regions is enormous. The sector employs up to about 50 per cent of the workforce of the countries, contribute between 40 and 60 per cent to the Gross Domestic Product (GDP), while contributing between 30 and 50 per cent to exports. The sector even fares better in Asian countries (China, Indonesia, India, Malaysia, Japan and South Korea) where it employs up to 90 per cent of the workforce and contributes about 40 per cent to the GDP. The SMIs in these countries are doing well because of deliberate government policies to encourage them. In the Asian countries in particular, young people are encouraged to set up their own small companies and see how they can improve their own lot through them instead of seeking employment elsewhere. With funds and other requirements supplied by the government, it is not difficult for young people to embark on their own businesses. The encouragement given to young people to set up their own businesses in Europe, Asia and North America has produced good results with many young people under the age of 30 coming up with great ideas that have changed the way we live. However, in Nigeria, the reverse is the case. Though young people are urged to set up their own businesses, the environment is so stifling that many of the businesses do not last for more than two years before collapsing and the promoters thrown back into the labour market.
Commenting on the fate of SMIs in Nigeria, a former Director General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Alhaji Muhammad Nadada Umar, said Nigeria had no plan or culture for the development of small and medium enterprises until recently. He added that annually universities graduate about four million people with less than 200,000 getting jobs “because we inherited a culture that once you graduate, you get a job. The unemployment challenge is so bad in the country that even if two million people are given jobs on a quarterly basis, it will still not salvage the situation. Empowering SMEs is the way to go.”
Government policies
Some policies of the government have also resulted in unemployment in the country. Before Professor Charles Soludo became the Governor of the Central Bank of Nigeria (CBN), there were 89 banks in Nigeria. With the consolidation policy introduced by the Soludo-led CBN, the banks were reduced to 25 in number. It is given that the reduction in the number of banks in the industry also led to the shrinking of employment opportunities in the industry. Ditto for the insurance industry. Following the success of the consolidation of the banking industry, the regulators of the insurance industry also jacked up the paid up capital of players in the industry with the effect that the number of insurance companies also plummeted and with it the available opportunities for employment in the industry.
Then recently, the foreign exchange policy of the Federal Government made it extremely difficult for a number of manufacturing companies to source raw materials with the effect that many of them either scaled down their operations or shut down completely.
Neglect of agriculture
Another cause of unemployment is the attitude of many Nigerians to agriculture. Agriculture is the biggest employer of labour in the country with about 70 per cent of Nigerians engaged in one form of agricultural practice or the other. However, most Nigerian youths do not want to touch agriculture with a barge pole because it is seen as hard labour; everyone is busy looking for white collar jobs, even those with degrees in agriculture-related disciplines. This particular development has two consequences on the nation. The first is that the army of unemployed youth keeps swelling together with the attendant security threats. The other is that the country is also faced with the threat of food insecurity because old people who are used to the old way of farming are the ones left to practise agriculture.
Talking about how the government crippled the agriculture sector, Chief Daniel Okafor, President of Potato Farmers Association of Nigeria, said potato farming could create vast employment opportunities as well as earn the country a fortune if potato farmers were given necessary encouragement. “I can assure you that given the necessary support, potato farming can create thousands and millions of jobs. Instead, what we see here is that a proposal is written by someone and upon submission; it is given to another person who didn’t know where you conceived the idea and would obviously not be able to implement it.”
Insecurity
The rising wave of insecurity in the country has chased some people out of farming and increased the number of unemployed people in the country. With bandits and herders taking over farmlands and attacking farmers, many people have abandoned their farms to stay alive.
Covid-19
Although Nigeria’s rising unemployment challenge predated the advent of Covid-19, the situation has been exacerbated by the disease. In Nigeria, many companies scaled down their operation and laid off workers as a consequence of Covid-19. Many of those laid off are still in the labour market.
Government’s efforts
The current administration has been making efforts to reduce the rate of unemployment through some schemes.
YES programme
Since becoming the nation’s helmsman, President Muhammadu Buhari has not hidden his intention to tackle unemployment headlong. As a result of this, the government, through the intervention of the Bank of Industry (BoI), launched a-N10 billion Youths Entrepreneurship Support (YES) project to empower youth with loans to start businesses.
The scheme is intended to create about 36,000 jobs annually.
According to BoI, a participant under the scheme could access up to N10 million loan which is repayable between three and five years. The loan attracts a single digit interest rate. Applicants must, however, present NYSC or higher education certificate as collateral to qualify for the loan with two external guarantors.
The Anchor Borrowers Programme
Although it is primarily meant to ensure food security, the Anchor Borrowers Programme (ABP), initiated by the Central Bank of Nigeria (CBN), is contributing to the reduction of unemployment in the country as many of those who would have abandoned their farms as a result of poor yields and other challenges have become large scale farmers.
Speaking on the benefits of ABP, Yila Yusuf, CBN’s Director of Development Finance, said about four million farmers have benefited from the programme. According to him, ABP has been instrumental in helping farmers improve their yields and creating employment opportunities.
Accelerated Agricultural Development Scheme (AADS)
The scheme, which is also managed by the Central Bank of Nigeria (CBN), is to create 360,000 jobs annually. According to the CBN Governor, Mr Godwin Emefiele, the scheme is targeted at unemployed youths of between the ages of 18 and 35.
The plan is to employ and train 10,000 youths from each of the states who are interested in sustainable and profitable activities along the agriculture value chain.
The CBN governor explained that “This scheme has been designed to create an ecosystem with the active participation of the public sector, state governments and the private sector.”
N-Power Scheme
N-Power is a job creation and empowerment programme for young Nigerians between the age brackets of 18 and 35. The scheme is divided into two categories; graduate and non-graduate.
The graduate category, also known as the N-Power Volunteer Corps, is meant for graduates who are between 18 and 35 years of age. It is a paid volunteering programme of a two-year period. The volunteers undertake their primary tasks in identified public services within their proximate communities in one of four areas; N-Power Agro, N-Power Health, N-Power Teach and N-Power Tax.
The non-graduate category has two programmes; N-Power Knowledge and N-Power Build. Through these programmes, young Nigerians are trained to build a knowledge economy equipped with world-class skills and certification to become relevant in the domestic and global markets. According to the government, about 200,000 beneficiaries are currently enrolled in the N-Power scheme.
While lauding the efforts of the government in scaling down the rate of unemployment in the country, Dr Tade Alajiki, an economist, said the government is not equipped to create employment opportunities, adding that the best it can do is to provide enabling environment for private businesses to thrive. According to him, when businesses thrive, they will be able to create employment opportunities.
“For as long as the government tries to get involved in job creation, we shall continue to have issues with unemployment because politics will always be involved. The earlier the government understands that it is not cut out for job creation, the better for all of us,” he said.
In his own reaction, Ismaila Azeez, a graduate of Biochemistry who teaches in a private primary school, said, “While there is no doubt that the government is making efforts to reduce unemployment and under-employment in the country, the results have not shown that we are making progress. Truth be told, government efforts are just like a drop in the ocean.”
Azeez called on all the tiers of government to ramp up job creation so as to “stop the likely explosion of the country by energetic but frustrated young people who need little persuasion to unleash their anger on the country. The way those in government go about is like unemployment is the problem of those affected. No, it is everybody’s problem. The government needs to do more to calm and to get young Nigerians working.”
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