Rising Unemployment Rate Raises Fresh Concerns

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A new report by the National Bureau of Statistics (NBS), highlighting a rise in unemployment rate represents a blow to the present administration’s job creation efforts, writes James Emejo

The World Bank recently estimated the country needed to create between 40 million to 50 million new jobs to be able absorb new labour market entrants by 2030, adding that the informal sector of the economy appeared to have greater potential for growth and employment generation.

The bank report on: “An Assessment of the Investment Climate in Nigeria: The Challenges of Nigeria’s Private Sector”, further raised concerns that the innovation landscape in the country is currently characterised by low investment in knowledge capital including Research and Development (R&D) and training, leading to low rates of technological innovation especially product innovation and upgrading.

Similarly, the Breton Woods institution in a separate report titled: “More, and More Productivity, Jobs for Nigeria”, said to reduce poverty and improve more inclusive growth, jobs needed to be more productive and provide higher income than the present jobs today.

Nevertheless, the latest unemployment statistics by the NBS pointed to the fact that rather than be on the decrease, the unemployment index rose to 10.4 per cent in the fourth quarter of last year (Q4 2015) compared to 9.9 per cent in the previous quarter.

The report is likely to upset the current administration of President Muhammadu Buhari, whose job creation strategies appeared to have yielded little or no tangible results for now.

According to the NBS, the number of unemployed increased by 518,102 persons, resulting in an increase in the national unemployment rate, which was recorded at 8.2 per cent in Q2 2015.

Although, there had been some recent and going initiatives by the administration to boost employment generation, experts believe the rate of job creation is outpaced by the increasingly large numbers of job seekers each year.
The Nigerian economy generated 475,180 jobs in Q3 2015, representing a significant increase of 236.1 per cent or 333,812 additional jobs when compared with the previous quarter and 36 per cent or 125,837 additional jobs when compared to the third quarter of 2014.

According to the Employment Creation Survey for Q3 2015, the increase in the number of jobs in the third quarter was driven mainly by informal sector jobs, which accounted for 90.2 per cent (428,690) of total jobs.
Yet, the informal sector of the economy remained mainly untapped and unstructured with several economic activities not captured by government.

Experts however, hope that some of the latest interventions by government could help to improve the disappointing unemployment trajectory.

Speaking to THISDAY in an interview, Managing Director/Chief Executive, Access Solutions Limited, Mr. Elijah Olanrewaju, said: “The truth is that on assumption of office and after doing a thorough analysis of the very fabric of the economy and the pillars upon which to build their campaign promise on, they discovered that going ahead to start creating job without necessarily strengthening the backbone to sustain the programme will be an effort In futility.”

According to him: “The current effort is to first of all rescue the economy before beginning to build all those programmes on it. Take for example our foreign reserves have stabilised now and have made gains, compared to January when it was going down; the policies on dollar though painful and tough, is beginning to make some gains and if pursued with palliatives and discipline, I see naira coming back to its glory years. The decrease in unemployment will begin to happen once they overcome these hurdles.”

The latest unemployment figures by the NBS show that a total of 22.45 million of the total labour force of 76.96 million were either unemployed or underemployed in Q4 compared to 20.7 million in Q3 and 19.6 million in Q2.
According to the Unemployment/Underemployment Report for Q4 2015, which was released by the statistical agency, the number of unemployed increased by 518,102 persons, resulting in an increase in the national unemployment rate.
Statistics further showed that 1.02 million persons in the economically active population had joined the labour force in Q4.

The informal sector of the economy recorded the highest number of intakes with 227,072 jobs or 61.5 per cent of total figure in Q3, though experts believed the potentials of the sector was far unutilised and largely neglected by government.

The current foreign exchange crisis rocking the economy has further raised concerns about unemployment situation in the country as companies resort to laying off of staff to be able to survive.
Furthermore, the exclusion of 41 items from accessing forex at the official window of the Central Bank of Nigeria (CBN) appeared to have weighed heavily on the affected entities-most of which had closed shop, thereby further dampening the unemployment situation.

Although experts who spoke to THISDAY, concurred that diversification of the economy was a sure way to boost employment generation, the seeming lack of clear economic blueprint by the present administration among others could further create disappointing unemployment outcomes unless urgent steps are taken to address the lapses in term of policy decisions and implementation.

Also, speaking to THISDAY on the disappointing unemployment report for Q4, Chief Executive, Global Analytics Ltd, Mr. Tope Fasua, said the apparent delays by the present administration in coming up with economic blueprint was weighing on job creation.
He said: “I think it’s really obvious because whereas they’ve been talking about job creation but you see how long it took them to settle down and then to appoint ministers and even up till now, the issue of economic policy is still in the realm of conjecture.

“There are different ways the government can create jobs; in Nigeria, what we’ve seen in the recent past is a scenario where they try to create jobs through construction…then we’ve also seen the rhetoric in the area of private sector creating the jobs, so if you look at both ways, construction hasn’t been doing very well, they are laying off big time, a lot of the projects in the past were not immediately continued with, some them are under probe and even the ones that are not under probe have not been funded, the budget hasn’t kicked in.
He added: “And then if you look at the private sector, it is going through that strain as well – so where’s the work going to come from? That’s the reason, in fact, someone will probably argue with the NBS to the extent that they are saying unemployment rate is about 10.5 percent; what that means is that it’s only one out of ten Nigerians that wants to work but not able to find employment – is that true?

“What about the issue of underemployment…? I think we should take statistics with a pinch of salt. I don’t put a lot of premium on such figures bandied around. The bottom line is that both the private and public sectors are going through a lot of stress right now, people are leaving jobs more than people are getting employed.

Only recently, the Minister of Trade, Industry and Investment, Dr. Okechukwu Enelamah, launched the Bank of Industry (BoI)’s N10billion-Youth Entrepreneurship Support (YES) scheme aimed at developing the entrepreneurial capacity of youths and providing start up loans at concessionary interest rates to execute their business plans.
The initiative further targeted to generate about 6,000 jobs annually and several other initiatives.

Although, the Q4 estimates may not have taken into account the most recent interventions to boost employment generation, there are increasing concerns that the current policy direction of the present administration may be discouraging foreign investments needed to boost jobs locally.