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The Financial Derivatives Company Limited (FDC) has attributed the rising level of rising insecurity and terrorism in Nigeria to the feeling of frustration, economic marginalisation and alienation by the country’s teeming youth population.
The Lagos-based research and investment company stated this in its latest bi-monthly economic report obtained at the weekend.
In the past few days, there have been increasing attacks from different terrorist groups across the country, with several lives lost, injured and many still unaccounted for. From the attempted attack on the Kaduna airport, the attack on a Kaduna-bound train, attack on security personnel and formations, as well other nefarious activities by terrorist groups.
However, the report pointed out that in the past decade, an estimated 87,903 people had died through Boko Haram, state actors, sectarian actors and other armed bandits in the country.
According to the firm headed by Bismarck Rewane, a member of President Muhammadu Buhari’s Economic Advisory Council, Nigeria, like most developing countries, was experiencing youth bulge.
In demographic studies, youth bulge refers to a demographic trend characterised by large share of youth and children population. This age cohort pattern is usually experienced when countries succeed in reducing infant mortality while keeping fertility rate high.
“For example, Nigeria is currently experiencing its youth bulge while most European countries are currently characterized by ageing population. Nigerian Population Pyramid rise and economic inequality will fall. It is a golden era for any economy.
“The harvest of opportunities that youth bulge offers will depend on how it is harnessed. For example, South Korea and now China exploited the golden opportunity.
“They understood the era and moved by initiating policies that helped to harness the youth potential. First, they created environment within which small businesses could flourish. China rigorously pursued programs that helped its 269 million youth population in assessing resources and running small businesses,” it stated.
According to the report, Nigeria with nearly half of the youth labour force been unemployed based on National Bureau of Statistics 2020 survey, the unemployment rates for persons between age of 15 and 24 years and 25 and 34 years were estimated at 53.4 per cent and 37.2 per cent respectively.
In addition, about 21 per cent of persons who are between the ages of 15 and 34 years were estimated to be underemployed.
“Empirical research suggests that there is strong correlation between poorly managed youth bulge and armed conflicts. When youth population rises, as in the case of Nigeria, the youth age cohort could feel marginalised if they are not gainfully employed. The feeling of economic marginalisation by the cohort has been associated with rising insecurity in the Sahel and Middle East.
“In Nigeria, rising insecurity and terrorism could be associated with the feeling of frustration, economic marginalisation, and alienation by the teeming youth population. In the past decade, estimated 87,903 people have died through Boko haram, state actors, sectarian actors and other armed bandits and terrorists.
“The increasing population of Nigerian youths that are into terrorism today confirms Dabbs view that cost of recruitment into armed criminal groups is low in the era of youth bulge. More so, rising insecurity represents a huge opportunity cost for the economy. It distracts policy makers and economic managers from focusing on growing the economy to focusing on fighting insecurity.
“Resources that would be used for the provision of education, development of human capital and boosting economic activities will be diverted to fighting insecurity. In the past decade, Nigeria has spent about N6 trillion on fighting insecurity, while spending only N5.4 trillion on recurrent expenditure in the education sector between 1980 and 2020.
“Institute of Economics and Peace (IEP) also reported that the growing violence in the country cost Nigeria about $132.59 billion (or N50.38 trillion) or eight per cent of GDP in the past decade. Thus, instead of harvesting demographic dividend from its bulging population, Nigeria has rather harvested huge economic lost, crisis and ballooning future costs in terms of debt overhang,” it added.
It stated that although Nigeria had wasted a substantial share of its golden era, there are vast opportunities for the country to exploit its demographic dividends that youth cohort could offer.
To start with, the youth, it noted that the population must be prepared for the labour market. This it stated requires prioritising education and skill development.
“While expanding access to secondary and tertiary education as well as skill acquisition is required to create opportunities for the youth population, there is also the need to enhance the capabilities to make the right decision for seizing opportunities through better access to credit, access to information, and development of well-functioning markets.
“Furthermore, Nigeria would need to embark on addressing the legacy constraints that undermine industrial development. It must tackle energy poverty as over 50 per cent of Nigerians do not have access to national grid. The focus on subsistence agriculture which has dominated Nigeria’s Agricultural sector policy needs to change: it must focus on commercial and mechanized farming. The pace of industrial transition must be more than doubled while keying into the fourth industrial revolution – the era of digital economy.
“The government and policy makers must rethink the fight against insecurity from the viewpoint of creating economic opportunities rather than purely military combat. The time to begin to harvest the golden era is now and we must act now or never. Indeed, Nigeria still has a second chance,” it added.