Unemployment in Nigeria: Role Public and Private Sectors
For now, the most delicate challenge Nigeria is facing is youth unemployment. The flat-earth-theory of job creation states that legally, government does expand employment. But economically, it doesn't — and that's what people usually mean when they say “government doesn't create jobs.” Job creation in any working economy must be private-sector driven. Job creation in the private sector is mostly a spontaneous and circular process. People buy products that need and want. Or businesses and private investors take risks by investing in new products, technologies and factories. Governance is too fragile and too risky to be left to the vagaries of boom and burst.
It is fundamental reality that man shall not live by bread alone, but it is perhaps more fundamental that man cannot live without bread, because food is a basic need of life. One gray area in Nigeria's economic planning has been the inability to industrialize to accommodate the ever growing population of high caliber and intermediate workers. It is government's inability to provide job opportunities for Nigerians that has precipitated soaring unemployment in the country.
Unemployment is defined as by the Bureau of Labor Statistics (BLS) as people who do not have a job, have actively looked for work in the past four weeks, and are currently available for work. Also, people who were temporarily laid off and are waiting to be called back to that job are included in the unemploymentstatistics. Unemployment is an important statistic used by the government to gauge the health of the economy. If unemployment gets too high (around 6% or more), the government will try to stimulate the economy and create jobs. The case of Nigeria has been that for the past 25 years or so, successive administrations had not taken deliberate steps to reduce the scourge of unemployment.
The National Bureau of Statistics, NBS, has put the figure of unemployed Nigerians in the first half of last year at 23.9 per cent, up from 21.1 per cent in 2010 and 19.7 per cent in 2009.As at last year, the total number of unemployed Nigerians rose from more than 12 million in 2010 to more than 14 million in 2011, with the figure increasing by 1.8 million between December 2010 and June 2011. Again, the incidence of unemployment according to the NBS, was highest among youths aged between 15 and 24, and 25 and 44, adding that the problem was more pronounced in the rural areas. These bas statistics are certainly not acceptable. It is against this background that the Federal Government under the leadership of President Goodluck Jonathan set up an Economic Advisory Team to chart a direction for the nation's economic rejuvenation efforts. Mr. President believes that with concerted efforts, Nigeria is still capable of meeting the Millennium Development Goals.
The National Transformation Blueprint designed in line with the Vision 20: 20:20 document stipulates that Nigeria will have a large, strong, diversified, sustainable and competitive economy that effectively harnesses the talents and energies of its people and responsibly exploits its natural endowments to guarantee a high standard of living and quality of life to its citizens. Fundamental to the Vision are two broad objectives – optimizing human and natural resources to achieve rapid economic growth, and translating that growth into equitable social development for all citizens. The Economic Dimension of the blueprint asserts that Nigeria would build a globally competitive economy that is resilient and diversified with a globally competitive manufacturing sector that is tightly integrated and contributes no less than 25% to Gross Domestic Product.
This will be pursued within the social context of a peaceful, equitable, harmonious and just society, where every citizen has a strong sense of national identity and citizens are supported by an educational and healthcare system that caters for all, and sustains a life expectancy of not less than 70 years
The blue print is geared towards the eradicate extreme hunger and poverty; enhancing access to quality healthcare, Provide accessible and affordable housing and providing sustainable access to potable water and basic sanitation among others. Specifically, the transformation agenda seeks to stimulate primary production to enhance the competitiveness of Nigeria's real sector; significantly increase production of processed and manufactured goods for export. It was also geared stimulating domestic and foreign trade in value-added goods and services and strengthens linkages among key sectors of the economy.
President Goodluck Jonathan acknowledges that fact that unemployment had become one of the biggest challenges in Nigeria and that it could only be addressed with innovative ideas that would empower youths to create jobs. The President said “My conviction is that if government decides to create enterprises, to employ people, the rate will go at arithmetic means but if we have a programme where we identify some talented creative youth and empower them to employ, the rate of employment will grow in a geometric progression”.
President Goodluck Jonathan recently declared his administration`s commitment to creating job opportunity for the army of unemployed youth in the country. Under a new scheme: government has introduced the Youth Enterprise with Innovation in Nigeria nicknamed (YouWin!), and an estimated 110,000 jobs are being planned as part of government`s efforts to tackle unemployment in the next four years. The President disclosed that due to the age distribution of youths, “which makes them more in number”, it was imperative for them to take the driver's seat of the country's development and therefore need all the support his administration could offer. Under the YouWin programme thriving enterprises would submit business plans for expansion which will take in other youths and build capacities through the financial assistance to 3,600 youths. Again, over 3,600 Nigerian youth is estimated to benefit from the programme. It is expected that the new scheme would create between 80,000 and 110,000 sustainable jobs over the next four years.
Government has launched the YouWin scheme will be launched at each of the six geo-political zones to complete the cycle of youth empowerment which will translate to wealth creation. The World Bank and the Nigerian Institute for Social Research (Niser) in separate reports revealed that over 55 per cent of Nigerians of working age are unemployed while more than 60 per cent are under-employed. Unemployment poses serious challenges to the country. The high unemployment rate in the country poses great challenge to the actualizing the Millennium Development Goals (MDGs).
While President Jonathan and his economic team are making concerted efforts to appeal to the UNDP, and other development partners to contribute their quota the bad statistics seem to be unending. Added to these bad statistics is the disclosure by the National Directorate of Employment (NDE) which puts the number of Nigerian graduates who completed the compulsory National Youth Service Corps (NYSC) within the last five years but have remained unemployed at over 200,000. This is appalling. It should be noted that President Jonathan appealed to UNDP to assist Nigeria in this programme which aims at providing jobs for the young, since in his own words, Nigeria's population will in November, 2011, rise to 166 million.
Consequent upon the partial removal of subsidy on petroleum product, the Federal Executive Council, FEC, with an approval for the Federal Government to procure 1,600 mass transit buses on Monday 9th of January to cushion the harsh effects of the removal of fuel subsidy. The 1,600 mass transit buses formed part of the N10 billion revolving loan set aside by the government to address transport infrastructure in the country. The revolving loan according to government is payable over a five years period and attracts a 5% interest rate under the Urban Mass Transit Programme and would be made available to credible transporters, labour unions and other Nigerians involved in transport business. What is more important however is for government to use the SURE reinvestment funds to fix our roads because transportation must be private sector-driven. The Federal Government declared her irrevocable commitment to creating job opportunity for the army of unemployed youth in the country. Under a new scheme: government has introduced the Youth Enterprise with Innovation in Nigeria nicknamed (YouWin!), and an estimated 110,000 jobs are being planned as part of government`s efforts to tackle unemployment in the next four years.
To underscore the need for partnership and collaboration, the Minister of Labour and Productivity, Chief Emeka Wogu, has said job creation and employment generation is at the fore-front of the transformation agenda of the administration under the leadership of President Goodluck Jonathan. The Minister said this when playing host to Ambassador Terence McCulley. He added that one of the cardinal objectives of the Jonathan administration is job creation and employment generation. These pronouncements underscore Jonathan's commitment to job creation.
It leaves no one in doubt that President Goodluck Jonathan accorded high priority to achieving an inclusive economic growth and job creation under the transformation agenda of his administration. President Jonathan made it very clear that the main reason for setting up the Economic Advisory Committee was for the Federal Government to work out strategies for creating employment. Government has also promised to partner with the World Bank and DFID, and other big players in the business community in mentoring the successful young entrepreneurs.
The federal Government holds the view that working directly with young talented people or the gifted ones will help in solving the problem of employment. The President also reiterated that more than N50 billion will be set aside for employment generation. In this endeavour, partnership with the private sector is very critical. Only on February 6, 2012 it was reported that Dangote has opened Ibese Cement Plant, which is capable of employing 7,000 people. With the enabling environment created by the administration, more of such private sector jobs would be created in the foreseeable future.
It was the need for the Federal Government to create job opportunities that informed President Jonathan's Economic Advisory Committee to take Agriculture as a priority. The advantages of the policy option cannot be over-emphasized. It is a pro-poor growth initiative that is capable of generating employment, ensuring food security and production of locally sourced raw materials for industries. Whereas this policy helps to diversify the economy, the spill-over benefits of contributing to the GDP and foreign exchange cannot be over-emphasized. Mr. President can take this further by initiating the equivalent of President Obama's JOB ACT to make it mandatory for private companies and multinational corporations to employ Nigerians who have the requisite skills, competences and capacity to contribute to the economy. What is clear is that president Goodluck Jonathan is deeply committed to tackling the menace of unemployment like never before. The dividends may not be long in coming.
The real business of job creation is the responsibility of the private sector while government creates and enabling environment and strong institutions that can guarantee investment security. Only businessmen and entrepreneurs driven by self-interest and the profit motive can support job creation. In a smoothly functioning market economy, the process feeds on itself. By contrast, public-sector employment grows only when government claims some private-sector income to pay its workers. Government is not creating jobs. It's substituting public-sector workers for private-sector workers.
Frankly, private-sector jobs may not be superior to public-sector jobs. Government needs teachers, soldiers, police officers, epidemiologists and the other workers. Big businesses are shaped by government's tax, spending and regulatory policies. Some industries depend heavily on government spending, regulations and industries that rely heavily on government contracts often resemble public agencies as much as private enterprises. In Nigeria, the economy is in a deep slump and in theory; government can increase hiring by borrowing and spending when consumers and businesses are retrenching. It is however wrong for a nation of over 160 million people to place the burden of unemployment on the shoulders of government alone. We should also question the role of the private sector.
Idumange John
Chairman, Bayelsa Social Media Committee