One intriguing thing about the Nigerian economy is its abundant paradox, a paradox fuelled by the federal government to the consternation of most citizens.
At any giving opportunity, the Coordinating Minister for the Economy and the Minister of Finance, Dr Okonjo Iweala is quick to tell those who care to listen that the Nigerian economy, though not a perfect one at the moment, is safe and sound.
Many people however doubt this assertion; they cannot just explain how a country that is experiencing high inflation, unemployment and poverty can be said to be developing even if its economic growth is in double digits.
The World Bank is also confused about the paradoxical nature of the Nigerian economy. In its report on Nigeria’s annual growth rates, the Bank said with growth that averaged over seven per cent in official data during the last decade, the country is definitely among the fastest growing economies in the world.
This growth, the World Bank said has been concentrated particularly on trade and agriculture, which should naturally translate into improved welfare benefits for many Nigerians, but this is not so as improvements in social welfare indicators have been unexpectedly much slower as poverty reduction and job creation refused to keep pace with population growth.
‘The GDP growth is not sufficient to support levels of poverty reduction and job creation necessary to prevent a growing number of poor and unemployed Nigerians.’ The Bank said.
The World Bank further notes that job creation in Nigeria has been inadequate to keep pace with the expanding working age population. The official unemployment rate had steadily increased from 12 per cent of the working age population in 2006 to 38 per cent in 2012.
Considering the fact that about 15 to 35 year age cohort accounts for close to 60 per cent of Nigeria’s population and are unemployed, Nigeria may inadvertently be sitting on a keg of gunpowder.
While there has been too much noise on the number of job created by this administration, the fact remains that there have been more job losses than are created at the federal, state and local government levels..
The unemployment situation is worsening with every passing day as thousands of graduates are churned out by tertiary institutions yearly to besiege those already hopelessly waiting for employment and roaming the streets searching for means of livelihood.
A comical situation also crept into the unemployment theater when Dangote Group of Companies received 13000 applications for 100 drivers from 6 Phd holders, 704 Masters and over 8,469 Bachelor Degree holders for Graduate Executive Truck Driver position.
The Federal Ministry of Labour and Productivity, painting a grim picture of the high unemployment situation stated that more than 41% of Nigerian graduates are without employment after the mandatory National Youth Service Corps engagement.
The grim unemployment situation is not peculiar to Nigeria, it is a global phenomenon which is taking the attention of the World Bank. The Bank put the number of jobs needed yearly to address the global unemployment situation by 2020 at 600million.
Also the Bank found that 45 million people enter the workforce each year, yet more than a third of companies studied across the globe were unable to find employees with the skills that they needed.“About 200 million people are unemployed globally, especially in developing countries.”
The study, “assessing private sector contributions to job creation,” concludes that four obstacles pose a particular challenge to job creation in the private sector: a weak investment climate, inadequate infrastructure, limited access to finance for micro, small, and medium enterprises; and insufficient training and skills. “Removing these obstacles can significantly increase job creation.”
According to the World Bank, “The answer to unemployment lies with the private sector, which provides nine out of every 10 jobs in developing countries, and therefore plays a key role in creating the new jobs needed and fostering growth. It is crucial to understand the constraints that prevent the private sector from growing and generating jobs. “
“Certain stand-alone reforms, such as those affecting business entry, taxation, competition and secured transactions have demonstrated a positive impact on growth and jobs. A lower tax rate and investment promotion efforts can help attract foreign direct investments,” the World Bank explained.
In the Nigerian context, the Bank made it imperative for the government to unlock rapid growth and job creation in a larger part of the country, as well as to increase standards of education, health, and other social services to enable its citizens to find gainful employment in the emerging growth poles.
Nobody is saying that everything must be done by government , however, it must as a matter of fact provide the enabling environment that will make the private sector, not necessarily the organised private sector but the informal private sector, the cottage industries, the artisanal service providers to thrive.
Since the Nigerian manufacturing sector is virtually dead on account of poor infrastructural facilities, power supply in the country must be improved upon, If there is improvement in public electricity supply, it will reduce the cost of doing business drastically as many artisans will find it easier to ply their trade.
Beyond this, it is imperative that government looks into the structure of Nigerian education system to make graduates of our tertiary institutions self employed and employable. Though the tertiary education system is now trying to embrace entrepreneurial skills development to tackle problem of unemployment among graduates, the nation is still far from the ideal of education for employment.
Eminent persons and scholars have pointed to entrepreneurship education as a bail out from unemployment.The Vice Chancellor, Ondo State University of Science and Technology, Prof Tolu Odugbemi affirmed that one major outstanding feature of the institution is the emphasis on entrepreneurial training and skill development for the students.
“Our students are being trained in over 20 various vocational skills aside from their normal academic pursuit to make them self-reliant, independent and job creators after their graduation,” he told this writer recently. He expressed concern over the teeming number of graduates produced annually by universities without employment opportunities.
According to a human capital development expert, Mr. Williams Ibiyinka, there is a clear difference between acquiring university education and acquiring skills.
‘Human capital or skill development is another strategy to reduce unemployment in this country. A lot of stakeholders want efforts to be intensified to ensure that youths are productively engaged and government provides necessary infrastructure to establish small and medium enterprises so as to reduce unemployment’ he stressed.
Because of the limited resources for the unemployed graduate in terms of becoming entrepreneur, the government can provide stimulus incentives to increase the capacity of several companies and conglomerates operating in Nigeria from oil to telecom, construction and manufacturing to expand and provide employment to qualified youths.
The Statistician-General of Nigeria, Dr. Yemi Kale bared his mind on what to do to improve the unemployment situation in the country.
According to him, “It remains a paradox that despite the fact that the Nigerian economy is growing, the proportion of Nigerians living in poverty is increasing every year. This trend may have increased further if the potential positive impacts of several anti-poverty and employment generation intervention programmes are not taken into account.”
‘If the federal government is sincere with promises being made to provide millions of job for the unemployed, then the nation should be seeing signs towards that direction. “But what we have are mere slogans without concrete actions to show as the unemployment situation worsened’ he said.
The impetus to reduce unemployment situation in Nigeria is not too strong in the 2013 national budget as allocations to infrastructure such as electricity, roads, etc are grossly inadequate.
One will only hope that the 2014 budget will be different as only heavy investment in infrastructure will open up the locked up employment opportunities in Nigeria.
World Bank And Nigeria’s Development Paradox