LATEST unfavourable figures on Nigeria’s unemployment rate demand fresh thinking by the Muhammadu Buhari government as it takes charge of an economy in a tailspin. With unemployment rising well above the sub-regional average and turmoil in the foreign exchange and money markets, the government will need to come up with a workable economic plan that will deliver millions of jobs and rejuvenate the productive sectors. The starting point should be making entrepreneurship and innovation drive our economic growth. In both developed and developing parts of the world, knowledge-based development is the recognised vehicle for securing the stability and dynamics of the economy.
This is most urgent amid the rising number of unemployed Nigerians of all ages. Figures recently released by the National Bureau of Statistics point to an unemployment rate of 8.2 per cent in the second quarter of 2015, rising from 7.5 per cent in the first quarter of the year. Remarkably, every stakeholder – employers, labour, parents/guardians, economists and development agencies – believe that this figure understates the problem.
Yemi Kale, the Statistician-General of the NBS, in an accompanying explanatory note, highlighted how Nigeria shifted its methodology and now uses “a variant” of the International Labour Organisation definition of unemployment that discountenances the entire economically active population or the entire national population. Instead, it calculates unemployment as “the proportion of those in the labour force who were actively looking for work but could not find work for at least 20 hours (per week) during the reference period, to the total currently active (labour force) population.”
A more realistic figure is the 24.1 per cent official unemployment rate given before its new template. Charles Soludo, a former Governor of the Central Bank of Nigeria, pointedly accused the immediate past Finance Minister, Dr. Ngozi Okonjo-Iweala, of pressuring the NBS to adopt the new methodology in order to arrive at the lower figure and burnish the tattered public image of the government she served as coordinator of the economic management team. On the hustings, the then ruling party touted lower figure as evidence of its “performance” in office to a sceptical population with at least 18 million jobless.
When a figure of 23.9 per cent unemployment was given by the NBS in 2011, analysts said then that it was probably closer to 30 per cent. The Labour Ministry in 2012 estimated that 41 per cent of university and polytechnic graduates were unemployed, while the National Directorate of Employment found that over 50 per cent of graduates failed to find jobs five years after graduation. Across the country, millions of homes feel the pinch with many in working age bracket, 15-64, out of work or underemployed – working less than full time – or in seasonal jobs. Even the inept government of the day admitted in 2014 that there were 1.8 million new entrants to the labour market each year, while it “created” 1.4 million new jobs, a controversial claim. Our frustrated youths are emigrating in perilous circumstances in search of a better life in far-flung parts of the world.
At 8.2 per cent, Nigeria’s jobless rate was still higher than the combined unemployment rate in the three neighbouring countries of Cameroon, Benin and Niger Republic that had 3.8 per cent, 1 per cent and 2.3 per cent respectively. The OPS continues to report job losses and factory closures in some sectors despite recent faster growth in a few sectors. The National Union of Textile, Garment and Tailoring Workers of Nigeria said last month that about 100 textile and related factories had closed between 2000 and 2015. Indeed, our job creation policies have been such a notable failure over the years.
Nigeria has lived with high unemployment for too long and now is the time to think outside the box. This is the time to unleash the forces that underpin the creation of knowledge, its diffusion and commercialisation through innovation, and the growth of entrepreneurship in the growth process. The Federal Government should structure a comprehensive economic programme to link major sectors of the economy – agriculture, mining, industry, finance, service, telecommunications and transport – to our overall education policy. We need policies to quickly revive agriculture, mining and industry as they typically employ in large numbers. Incentives should be provided to ensure bumper harvests and mined resources that should have linkages with processing factories.
Government should go the extra mile to lure top global players in steel, power and petroleum refining to invest here. Liberalisation of railways, downstream oil and gas, steel assets and power should be top priorities to unshackle them from state control and its corrupting influence and facilitate foreign direct investment. Unencumbered by the excessive corruption and wild spending of the past, the Buhari administration should concentrate efforts on aligning fiscal policy with monetary policy to target single lending rates, low inflation and favourable currency exchange rates.
The economy cannot break free unless it overthrows these triple tyrannies and reduce its dependency on imports and oil and gas export revenues. The government should be resolute in blocking fiscal leakage and ruthless in punishing economic crime and looters.
Our three tiers of government should know how to set the priorities right. Leaving the private sector to get ahead with running business, government should concern itself with providing critical public infrastructure and services such as highways, health care, education and training, as well as water and sanitation, while security, law and order should be the guarantors of investments.
The government should never lose focus of the ultimate objectives of all its economic policies – job creation and job protection. This will enhance the tax base and ensure a diversified export base. States and local governments should join in by devising robust agricultural policies and partner with the centre to exploit minerals and process them locally. Their major preoccupation should be rural development; building roads to link the farms with markets, provide housing, health care services, education and skills acquisition, as well as water and sanitation services.
Stimulus packages should be targeted at economic and some social sectors, not at fiscally reckless governors and LGs. Stimulus policies introduced in the wake of the global meltdown have delivered jobs in the United States, South Korea, Canada and the United Arab Emirates, among others.
For a robust population like ours, policy makers at all levels should target self-sufficient as the major economic objective of the state.
