As Govt Grapples with Unemployment


The youth unemployment rate of 21.50 per cent in the first quarter of 2016, compared with 19 per cent in the fourth quarter of 2015, released by the National Bureau for Statistics (NBS), in a country with an estimated population of 180 million, is scary.

Youth unemployment rate in Nigeria averaged 16.43 per cent from 2014 until 2016 and reached an all-time of 21.50 per cent in the first quarter of 2016.

It is even more worrisome because the figure is bound to increase in the current year with tertiary institutions set to churn out fresh batches of job seekers, alongside the recorded high level of job losses across all sectors.

However, there is a general acknowledgement of the fact that unemployment is one of the major challenges confronting the country today, the reason the current administration made job creation one of its cardinal programmes and the Chartered Institute of Personnel Management (CIPM), being the regulatory body for the practice of human resource management in the country also demonstrated support of the agenda through active engagement of stakeholders.

There is definitely a valid link between the parlous state of the economy and the rising rate of unemployment in the country. Many decades of reliance on oil as the mainstay of the economy have brought to the fore the country’s susceptibility to the vagaries of incidents and developments outside its shores. The consequence is the massive job losses in virtually all the key sectors of the economy – oil and gas, manufacturing, finance, and services.

A recent survey conducted at the behest of the CIPM through its committee on the Management of National Unemployment Challenge (MNUC) showed that beyond the state of the economy, policy inconsistency has contributed immensely to the high rate of unemployment in the country, at an average rating of 4.56 on a scale of 5.

The survey identified lack of critical analysis of the applicability and sustainability of public policies before they are formulated as a major obstacle to any effort to reduce unemployment in the country. There are also issues of poor political governance and setting of political direction, as well as the harsh operating environment for businesses; lack of a clear-cut national employment policy that is owned by all citizens, particularly political actors in all the divides, as well as wrong alignment of output from the country’s educational system with industry requirements.

Income and wealth inequality are also major causes of unemployment, as findings from the CIPM survey showed. The distribution of income and wealth is skewed heavily in favour of workers in the private sector – a sector that has become perhaps worse hit by the current state of the economy. This inequality has naturally generated greater interest of the country’s youth in high-paying jobs in the private that no longer exist.

The proclivity to see acquisition of education not just as a means for securing well-paid jobs, but also for prestige, has resulted in erosion of the once held belief in the dignity of labour. A large percentage of the unemployed in Nigeria comprises youths who would rather remain unemployed than take up what is generally seen as menial jobs that would not enhance their status and prestige, a culture that defeats the purpose of going to school in the first place.

Costs to the country
The rising wave of crime in the country is unarguably the highest cost the country is paying for its large pool of unemployed youths. This has also led to increased ethno-religious crisis and other social vices which are mostly being perpetrated by the youths. Before now, the dominant crime the country had to contend with was armed robbery and petty stealing. The coming of information communication technology has also brought with it innovations in internet fraud, a new and evidently more attractive means of livelihood for educated youths who now deploy their knowledge and skills in the wrong direction.

Added to the crime mix is kidnapping, a crime that was alien in this part of the world until a few years ago, when Niger Delta militants introduced it as a source of funding for their activities. The increasing rate of kidnapping in the country, most of which are unreported, is evidence of its lucrative nature, especially with the low risk of getting caught, since families of victims would rather pay ransoms to get their loved ones freed rather than have them killed in any rescue effort involving security agencies.

The high rate of unemployment means that the manufacturing sector, the engine room of any nation’s economic growth, is robbed of the opportunity to engage sufficient competent hands for their operations, with the economic consequence of not being able to produce enough for local consumption let alone for export, for the much needed foreign exchange.

Way forward
There is a convergence of opinion among experts that a significant step towards reducing the rate of unemployment in the country is the setting up of cottage industries in rural areas as a way of reversing the rural-urban drift. Availability of such establishments in the rural areas would achieve the two-pronged objectives of creating employment in the hinterland and also encouraging residency of the country’s most active population in those areas, where the cost of living is relatively low. There is also the prospect of spreading development to those areas in terms of provision of infrastructure.

In further addressing the challenges, Dr. Ikechukwu Kelikume of the Lagos Business School added that macroeconomic policies cannot effectively combat Nigeria’s unemployment issues stating that “quick fix solutions would be ineffective rather what is needed is to set out a rolling plan for the next 10 to 15 years on how best to positively shift Nigeria’s economy thereby bridging the knowledge gap.”

He stated further that technically, Nigerians need to be liberated, equipping them with what it takes to be productive.
Also, the World Bank in a recent report highlighted ingredients required to accelerate structural transformation to significantly increase productive employment opportunities.

The World Bank report noted that given the country’s rapidly growing population, it will require 40 to 50 million additional jobs to employ its population. The transformation of employment opportunities will need to be balanced and inclusive to also address the gender gap in the labour market and youth unemployment.

The setting up of economic empowerment schemes in form of micro, small and medium enterprises programmes that target the informal sector then presents a veritable avenue for reducing unemployment in the country, especially with the growing interest in entrepreneurship by the youth.

Women constitute the larger segment of operators in the informal sector of the nation’s economy. There are, at the moment, various empowerment initiatives that are designed to uplift the standard of living of women. The effort to reduce unemployment must therefore include more of such initiatives at the local, state and federal levels.