African policy makers and business leaders need to wake up to the ticking time bomb of youth unemployment in the continent and treat the issue with seriousness, writes Obinna Chima
The latest figures from the National Bureau of Statistics (NBS) showed that unemployment rate in Nigeria climbed to 12.1 per cent in the first quarter of 2016, from the 10.4 per cent it was in the fourth quarter of 2015, reaching the highest since December of 2009. The figure could be far higher than this considering the weakness in gathering accurate data in the country.
But a disturbing figure in the NBS data was the high rate of youth unemployment. Specifically, youth unemployment in the country increased to 21.5 per cent from 19 percent in the period under review. This has remained a source of worry not just to Nigeria, but other countries in the continent.
From Lagos to Abuja, Lusaka, Windhoek, Kigali, Accra to Rabat, Conakry to Addis Ababa, while the potential of Africa remains a sweet story to tell, that bright light of optimism shinning in the continent may be replaced with a dark cloud of desolation if the monster of youth unemployment is not tackled. In fact, unless more attention is given to the menace, Africa’s demographic boom math turnout to be its doom.
Speaking at the 51st annual meeting of the board of governors of the African Development Bank (AfDB) that took place in Lusaka last month, the AfDB president, Akinwunmi Adesina, noted that Africa has a job crisis.
“Unemployment rate is a crisis. Africa is in a job crisis. I believe the solution is right here in Africa” Akinwunmi, who is also Nigeria’s immediate former Minister of Agriculture, emphasised that the future of Africa lies in a more “prosperous and inclusive Africa.”
On his part, the Founder of the Mo Ibrahim Foundation, Dr. Mo Ibrahim, pointed that countries in Africa are wonderful at wasting natural resources, saying “the same way we waste our youth. We send our natural resources overseas where they add no value until they are refined’.
In support of this, the Executive Secretary of the United Nations Economic Commission for Africa, Carlos Lopes, added that “African migrants, if properly trained, can return to the continent to add value just like the entrepreneurs being trained by the Tony Elumelu Foundation.”
Focus on Entreprenuership
The Chairman of the United Bank for Africa (UBA) and pan-African investment company, Heirs Holdings, Mr. Tony Elumelu, who was also a panelist at the AfDB meeting, said the solution to the problem of youth unemployment in the continent can only come first from within the continent as well through collective efforts by all stakeholders in the Africa project.
“I believe entrepreneurship can solve the problem of job creation. Young people need a helping hand, the kind that will make them self- reliant and self- confident so that they can add their quota to the development of the continent,” he added.
Elumelu said: “If we are serious about cultivating jobs, let Africans who want to help deal with this issue. The Tony Elumelu Foundation Entrepreneurship Programme (TEEP), is my foundation’s 10-year, $100 million commitment to empowering the next generation of African entrepreneurs and surely, there are more private sector leaders that are willing to invest in our continent’s future.
“I see great entrepreneurship potential in many of the 45,000 applicants that applied for TEEP this year alone, but the level of training, mentoring and networking that we offer means that we can only select 1,000 each year. I call on everyone here to support those who missed the cut. This is a clear path to sustaining African economic growth.”
The panelists were focused not only on creating jobs for the youths but also harnessing the skills available on the continent to ensure good use is made of the natural resources available.
Also, Parliamentary State Secretary, Federal Ministry for Economic Cooperation and Development (BMZ),Thomas Silberhorn urged the world to take note of the fact that “$150 billion worth of goods is exported each year outside the continent(of Africa) which is much more than the aid given” as Elumelu opined that “international aid organisations need to re-evaluate the way they engage Africa in the 21st century.”
Elumelu, who was recently in Paris on the invitation of the French Senate, Business France and Banque publique d’investissement (BPI), also used the opportunity to promote Africa as a continent ripe for investment.
The meeting at the BPIs event ‘BIG’(BpiFrance inno generation), witnessed a gathering of over 4,000 French entrepreneurs.
“For too long, many people when they hear the word ‘Africa,’ they think about darkness and backwardness… I want people to think of Africa and think of opportunities. I want to stimulate the economic transformation of Africa and help the continent to take its rightful position as a strong regional player in the international community,” he said in an address.
Furthermore, he urged French businesses to come and discover Nigeria and find the right partners to help them navigate the business environment. He cited the example of UBA – which has been operating profitably and successfully in Nigeria for 70 years – and its subsequent footprint into 18 countries in Africa over the last decade. “The Nigerian economy plays an important role in West Africa and beyond. So when you invest in Nigeria, the benefits spill over to our neighbours in dozens of countries’ he stated.
Inclusive Growth for Africa
Also, in a recent presentation, a former Deputy Governor of the Central Bank of Nigeria (CBN), Professor Kingsley Chiedu Moghalu warned that if Nigeria and other developing countries fail to achieve inclusive economic growth, they would have missed the path to true development and run the risk of increased instability.
Moghalu, who is a Professor of Practice in International Business and Public Policy at The Fletcher School of Law and Diplomacy at Tufts University in Boston, USA explained: “In order to achieve inclusive growth, we should be clear about what it means and what it doesn’t.
“Inclusive growth is about bringing all sectors of the economy and different strata of the society into a process of broad-based economic growth. This raises incomes and creates wealth across the board through increased labour productivity. It is not the same thing as inequality.”
“That is a wider problem created by the unequal distribution of capitalist wealth and is being addressed in some industrially advanced countries with income and wealth redistribution through taxation adjustments and other means,” the former CBN chief said.
Moghalu also noted that “inclusive growth also is not quite the same thing as social protection, although there is some relationship between the two. Inclusive growth focuses on the productivity of labour across a balanced set of sectors, and on ensuring employment, while social protection and welfare may include exhaustive fiscal transfers that do not necessarily create any goods and services.”
He suggested that “achieving inclusive growth in Nigeria and other developing countries required an approach focused on conceptual clarity, which is necessary because a proper understanding of what inclusive growth is and what it is not will help policymakers avoid the wrong kinds of “solutions” that will in reality not solve the problem; rural based economic growth as opposed to “urban bias” in development thinking; the fundamental role of business in promoting inclusive growth; infrastructure, which promotes equality of opportunity to access the marketplace of labour and goods; the creation of an effective social contract between the state and its citizens, which is presently absent; financial inclusion; and effective political leadership that can translate political power, authority and responsibility into inclusive growth-related public policy, with concrete outcomes that bridge the gap between expectations and performance.”
The former central banker noted that the failure to consciously pursue inclusive growth in Nigeria has created structural distortions in the country’s economy that have resulted in the economic crisis in the country.
Also, a former President of the AfDB and former Minister of Finance of Rwanda, Dr. Donald Kaberuka, emphasised that inclusion of every citizen and every group in the political process and the exercise of political power is essential to attaining inclusive economic growth.