By Aare Afe Babalola, SAN, OFR,CON
Perhaps the most deep-rooted millennial problem facing Nigeria is the issue of unemployment.
The expectation of the average graduate is to secure a well-paying job upon the conclusion of his studies but the harsh reality in the Nigerian labour sphere is that the completion of tertiary education serves as no guarantee for securing any meaningful employment. However, this has not always been so.
In the early 60s and 70s, the norm was that fresh university graduates, and even graduates of teaching colleges, more-often-than-not, had jobs waiting for them ranging from clerical to professional jobs, and everything in between. Representatives of high-profile companies and corporations were known to present tempting offers to the brightest college graduates. What then went wrong? What changed the fate of the Nigerian graduate from the high hopes of securing a good job to the gloomy reality of unemployment and underemployment which has characterised the Nigerian labour-market?
The number of people in any country is divided into two groups: the economically active and the economically inactive. The economically active group, which constitutes the labour force, are the group that is willing and able to work, including those actively engaged in the production of goods and services (employed) and those who are not employed.
Economically active group
On the other hand, the economically inactive group refers to people who are incapable of seeking gainful employment due to old age, poor education or health-related issues, and those who are generally unwilling to work.
Amongst a myriad of definitions, unemployment connotes a situation whereby persons capable and willing to work are unable to find suitable paid employment. The unemployment rate in Nigeria has reached an alarming rate. According to recent statistics, Nigeria’s unemployment rate as at the second quarter of 2020 is 27.1 per cent. This means that about 21.7 million Nigerians remain unemployed, a figure that exceeds the population of 35 of Africa’s 54 countries.
Likewise, the country’s underemployment rate which reflects those working less than 40 hours a week, or in jobs that underutilise a person’s skills, time, or education – has increased to 28.6 per cent. The implication, therefore, is that Nigeria’s unemployment and underemployment rate is a combined 55.7 per cent out of the estimated labour force of 80.2 million people. These are damning statistics.
Several factors have been identified as the cause of unemployment in Nigeria today.
Population Increase: There is a relationship between population increase and unemployment. Unemployment in Nigeria was 6.1 per cent in 1985 and by 2009, it had increased to 19.7 per cent. In 2010, unemployment was 21.1 per cent; in 2011, 23.9 per cent and now in 2020, the rate is 27.1 per cent.
The implication, therefore, is that as the population grew, the rate of unemployment equally increased. This is, however, not meant to be so. An increase in population signals an increase in labour supply. With 36.4 per cent percent growth in population for 16 years, between 1991 to 2006, and a 55.5 per cent growth of the economy for the same period, unemployment should have reduced drastically but rather, it increased by 74.8 per cent.
Neglect of the agricultural sector: The neglect of important sectors such as agriculture where the country has a comparative advantage. By CBN report, agriculture contributed 34.1 per cent to the GDP in 1995 and 43.5 percent in 2011. This represents an increase of 9.4 per cent with the agricultural sector employing over 50 per cent of labour in the country. There should have been a decrease in the rate of unemployment but rather the rate of unemployment increased by 69 per cent due to the perennial underfunding of the sector as a result of the focal shift to crude oil exportation.
Corruption: No doubt, corruption is one of the most severe vices facing the nation. Unfortunately, it has retarded economic growth and development and has hindered the pace of Nigeria’s economic development and ultimately brought about the high level of mass unemployment. It is a popular knowledge that ascription and nepotism permeate job placement in both the private and public sectors. In the labour market today, employment is sparsely based on merit but on less honourable traits of nepotism and favouritism. These, of course, have denied well qualified, determined and energetic Nigerians employment.
Poor management practice: Nigeria is a nation blessed with vast natural and human resources. These resources, if well managed, is capable of surmounting Nigeria’s unemployment problems. What Nigeria lacks is the proper implementation of its good economic plans. The process of implementation has been taken over by corrupt and incompetent implementers.
Many writers have opined that the Nigerian Public Service remains an obstacle to effective implementation of government policies and programmes. These they adduced to the high rate of corruption and dishonesty and indiscipline on the part of the public servants. Studies have shown that since the First National Development Plan (1962-1968), Nigeria has had several other development plans both long and short term. These plans have not resulted to the uplift of the standard of living of the citizenries and overall development in the country.
Poor enabling environment: The poor economic-enabling environment that characterizes the economy over the years has continued to pose serious challenges to employment in Nigeria. This is coupled with the poor state of electrical supply and security which has continued to hamper investment drives and thereby reducing the prospects of employment. Many job seekers who have embarked on self-employment programmes are unable to do so because of the hostile production environment. Others who make attempt are forced to wind up due to absence of infrastructures and the overall heat of the investment environment.
Unfavourable government reforms: In Nigeria’s history, government reforms have contributed to the state of unemployment. Between 2006 and 2007, public sector reforms saw the disengagement of 121,731 workers from the Federal Public Service. The reform also hit the banking sector with the massive retrenchment of workers. NNPC alone pruned its workforce from 17,000 down to just 9,000.
In contrast, government has slimmed applicants’ chances to fill vacancies available within the same period without creating other opportunities. For instance, out of over 105,000 candidates who applied for employment into Federal Inland Revenue Service (FIRS) in 2010, only 1,858 persons were recruited. The rest were left unemployed.
Solution: Fortunately, the unemployment situation in Nigeria is not without a solution. I wish to adopt the recommendations as proffered by Kayode, Arome and Anyio who published a brilliant article in the Global Business and Economics Research Journal.
The government should intensify the effort to fight corruption at all levels, in all circumstances, both in the private and public sectors.
There is a need to diversify the economy away from the oil sector. Other employment-driven sectors (i.e. agriculture, solid minerals, steel industries, railway etc.) should be effectively tapped and utilised.
The power sector is one of the most sensitive and essential sectors of the nation’s economy. This is because adequate power supply ensures a productive economy that is capable of creating significant employment to local artisans, cottage and manufacturing industries.
Hence, there is need for a revolution in the power sector; if the power supply is significantly improved, many industries that have either close shops or relocated to other neighbouring countries, or collapsed, would return and commence operation or increase to full production.
The government should make provision for bail-out funds for both private and public companies and industries that their collapse or closure have rendered their workforce jobless. The environment should be made conducive to make them function effectively. Government as a matter of urgency need to address all the operational challenges and threats confronting the manufacturing sectors and other investors in the country.
The agricultural sector should be given proper attention. Government at all levels should recognise the activities of rural farmers. Agricultural loans and other farm inputs such as fertilizer should be released on time and be made accessible to the rural farmers during the farming season.
The role of local entrepreneurs in economic development cannot be overemphasised. Hence, the government should create an enabling environment for Small and Medium-scale Enterprises, SMEs, to survive and grow. The government and private individuals should provide start-up capital in form of loan or grants to those who want to go into business and become self-reliant or self-employed and consequently employ others.
The non-governmental organisation should collectively join hands with government agencies in organising seminars and workshops geared towards training the citizens to explore their environment and God-given resources, maximise their potentials so as to become self-reliant.
The educational system should be made functional. To achieve this, emphasis should be laid on entrepreneurship education so that students should have acquired the basic skills needed for self-reliant before graduation, from secondary schools.
Vocational guidance and counselling services should be given to students in the course of their studies in order to prepare, guide and encourage them to read courses that would guarantee them employment after graduation.
There is a need to allow the private sector to go into the economy to help in developing the nation’s economy. The government should set standards and ensure that these standards must be followed in order to regulate exploitative tendencies of the bourgeoisie and also provide an environment conducive for them to operate.