Chukwuma Ephraim Okenwa
Despite the window of opportunity for economic growth associated with a youthful population, declining income per capita, and high youth unemployment rate suggest that Nigeria is yet to harness its Demographic Dividend.
By 2050 the population of people living in Nigeria is estimated to reach 410 million (UNDESA, 2017). What this implies is that the population of Nigeria in 2050 may be twice the estimated population in 2020 at 206 million people. About 70% of the Nigerian population is under 30 and 42% are under age 15. (Akinyemi & Mobolaji, 2022) “Nigeria is expected to continue experiencing a youth bulge between now and 2050, registering increases in total population for all the under-age cohorts (UNDP, 2018).
Significantly, a great deal of young Nigerians are unemployed or underemployed. According to the National Bureau of Statistics (NBS), the youth unemployment rate and youth underemployment rate stood at 42.5% and 21% respectively. With the projected continuous growth in the young population by UNDESA, this situation could further exacerbate if nothing is done to stem the tide. Nigeria is also challenged with ‘human capital flight’.
Young professionals in Health, Services, and Manufacturing are constantly leaving the country in search of greener pastures. Some young Nigerians lost their lives trying to cross to Europe through the Mediterranean and Atlantic sea routes. OECD (2013) notes that: “A negative economic situation and a restrictive spatial planning policy may increase the outward migration rate.”
Oby Ezekwesiri speaking about the situation of Nigerian Youth unemployment at the 2017 Nigeria Economic Summit argued that “the problem is in having too many human beings but less human capital”. This claim by Oby Ezekwesiri corroborates the outcry by industry leaders about the unemployability of many Nigerian graduates and the skill gap.
More so, the ranking of Nigeria as 161st of 181 countries assessed in the recent Global Youth Development Index suggests that the Nigerian Government is not doing enough to improve the status of young people within the country. Meanwhile, the income per capita of Nigeria is declining despite its high working-age population. This is surprisingly contrary to the finding “that a slowdown in working-age population growth could cause lower per capita growth. (Kuhn et al, 2018). The inverse of it should have been true for Nigeria.
Given the skill gap, high youth unemployment rates, out-migration risks, and the causal link between unemployment and crime, it is likely that if the right policy response is neglected the youth bulge in Nigeria which should pay a high dividend, could actually be a time bomb waiting to explode!
A Policy option before the Nigerian government will be to transform the youth bulge into a Demographic dividend. To achieve this, the Nigerian government has to ensure massive job creation for the young population, as well as build the capacity of young people to become very valuable in the labour market. Lin (2012) contends:”
If the number of working-age individuals can be fully employed in productive activities, other things being equal, the level of average income per capita should increase as a result. The youth bulge will become a demographic dividend. However, if a large cohort of young people cannot find employment and earn satisfactory income, the youth bulge will become a demographic bomb.”
In ensuring availability of jobs, the Nigerian government must shun the pressures from labour unions to extend the age of retirement from 60 to 65. The Civil Service in Nigeria is currently dominated by old cohorts. This should not be the case in a nation dominated by young people. I argue that further extension in the years of service will mean keeping young people further away from public service.
Engaging young people in sectors such as Agriculture, Manufacturing, and Services will not only ensure that their strengths are harnessed but their ingenuity is rightly deployed. Beyond ensuring inclusive employment of young people in the public service, the Nigerian government should create an enabling environment for businesses.
The challenges of multiple taxations, difficulty with funding, and poor access to market and infrastructure have not helped the lots of businesses in Nigeria. No government anywhere has the capacity to directly employ all its citizens, but governments can facilitate the process of job creation by creating enabling environments for existing businesses to thrive, as well as helping new business ideas to start off.
At the moment in Nigeria, the interest rate for accessing loans from commercial banks is about 28.5% per annum. This greatly contrasts with a single-digit loan by South Africa at 9.31 % per annum. High interest on loans makes it difficult for businesses to become better after accessing such loans. There is a litany of cases of businesses being taken over by banks because they could not meet up with their debt obligation.
The Nigerian government should through the Central Bank of Nigeria make loans accessible at single digits. Start-ups should also be able to access loans without collaterals. The economy of Nigeria is largely informal; hence the role of SMEs in creating jobs and securing higher economic growth should not be neglected.
The skill gap among young Nigerians is a concern. A situation where some building contractors prefer young people from neighbouring West African countries such as Ghana and the Benin Republic to young Nigerians is simply not helpful to the youth unemployment situation in Nigeria. There is a need for the Government to promote the One-Youth-One-Skill approach. A skill can pay an individual for life. I argue that a youth with a skill is empowered to employ others.
The Nigerian government needs to become more intentional in preparing young people through quality education for the marketplace. The current curriculum does not seem to recognize the needs of various sectors of the Nigerian economy: the institutions need to be in sync with the industry to ensure that graduates are churned out in fields where they are needed the most.
“The conventional approach for dealing with youth bulge is to make young people job ready. The idea is that young people’s skills or more broadly human capital- needs to be increased to enhance their productivity in the labour market.” (Lin, 2012). For Nigeria, the gains in employment would be strategic. It would propel incomes and offer higher standards of living.
Reducing Nigeria’s youth unemployment rate would increase the country’s GDP per capita. It would keep youths away from the perilous adventure of perishing in the Mediterranean Sea in search of economic opportunity in Europe. “Creating decent and secure jobs and enhancing livelihoods for the youth, presently and in the future, thus holds the key to national peace, freedom, and prosperity,” says UNDP.
