Apart from the debilitating havoc the novel coronavirus pandemic has inflicted on lives, it has also instigated new economic realities. As the government’s efforts to contain the plague by locking down the economy in March coincided with a fall in prices of crude, uncertainties enveloped the economy. Unable to produce, the private sector downsized massively, an excruciating course of action that the National Bureau of Statistics says has led to 40 per cent job losses. As the federal and state governments ease the lockdown progressively, the next stage is to re-energise the economy for exponential economic growth and substantial job creation.
In Nigeria, that has never been easy. Even before COVID-19, it was easier to lose a job than get one. The NBS put the unemployment rate then at 23.1 per cent and underemployment at 20.21 per cent. With millions graduating from the tertiary institutions into the labour market annually, Nigeria’s most active population group (the youth) suffers from a 55.4 per cent jobless rate, said Aljazeera, quoting data from global agencies. These jobless data present themselves among the worst globally.
Almost 21 million were jobless as of mid-2018, the NBS said. Not only was the situation a time bomb, the COVID-19 pandemic has also aggravated it. Vice-President Yemi Osinbajo said if the situation persisted, 39.4 million would lose their jobs by year-end. In aviation, where domestic and international operations stopped in March, the International Air Transport Association says 91,380 jobs are at risk and its contribution of $760 million to the national economy going the same route. In manufacturing, factories have been shut down, causing huge redundancies.
As the pandemic caught Nigeria — like the rest of the world — napping, the United Nations Trade and Development Agency estimated that the outbreak would cost about $2 trillion in 2020 in global losses. At a point, however, that explanation will become untenable in the face of the current human misery, especially as other governments around the world are entrenching measures to save jobs, create new ones and rescue their economies from collapse.
Some global instances suffice. Hit by the virus, Denmark swiftly enacted a job retention law in March. Through the scheme, the Danish government would pay up to 75 per cent of salaries of full-time and non-salaried employees at the risk of losing their jobs. The Coronavirus Job Retention Scheme in the United Kingdom will cover pay up to a maximum of £2,500 per worker per month. From a $2 trillion stimulus package, the US government’s furlough scheme will pay compensation to workers. The World Economic Forum states that Australia is making £63.5 billion available over the next six months to support the wages of employees in businesses that have seen significant drops in turnover.
For Nigeria, it is an arduous task indeed. With oil income — the mainstay of the economy — at a low ebb, social benefits practically non-existent, the population growing at a dizzying speed, and more than 40 per cent of the population of 196 million under the age of 14, the three tiers of government need to refocus diversification efforts strategically to agriculture, solid minerals, the services and export trade. Nigeria’s 708,000 square kilometres of agricultural land is not only a source of food, but contributed 35.1 per cent of employment in the country in 2019 and averaged 22.6 per cent of the GDP between 1981 and 2018, the World Bank said. Despite this, Nigeria imports food annually with about $22 billion. This should change, especially at the state and local government levels.
Maximising federalism, 10 of the 50 US states account for the highest agriculture production in the country. Agriculture in that country contributed 11 per cent of total jobs or 22 million full- and part-time jobs in 2017, the US Department of Agriculture said, ensuring that 88.2 per cent of Americans were food secure that year.
For Nigeria, it appears the party is over. Currently, the major error is Nigeria’s inverted federalism in which the three tiers depend largely on oil income. Unfortunately, the black gold is no longer glittering as millions of barrels of Nigeria’s crude oil are piling up on the seas without buyers. The federal and state governments are seriously in debt. The 774 local governments are practically unproductive.
What should be done? There is a low-hanging fruit to take advantage of. The revival of agriculture should intensify at this difficult moment. Practically every state has comparative advantage in food production; this should be leveraged. Modern irrigation methods, agric extension services, farm settlements, mechanised farming and the use of research findings from the agric institutes that dot the country can change the game.
The SMEs, which account for 96 per cent of businesses and 84 per cent of jobs (compared to 60 per cent in South Africa and 65 per cent in Europe), are gasping for breath. This calls for a holistic revival policy, including deploying a great part of the Central Bank’s N3.5 trillion stimulus package to them. State governments should collaborate with the multinationals in the area of solid minerals. Osun, Zamfara, Kogi, Nasarawa and other states rich in minerals should stop waiting for dwindling federal allocations. Now, every state should be an economic unit. They should play major roles in job creation, not by struggling to employ for the public service but by improving the ease of doing business in their territories. In telecoms, some of them have significantly or totally removed the right of way fees for laying broadband fibre, but they need to remove other bottlenecks.
The Federal Government should concentrate on eliminating the cyclical insecurity siege around the country. Bandits, Fulani herdsmen and kidnappers have sent farmers packing from their farms. The regime of the President, Major General Muhammadu Buhari (retd.), can create jobs by quickly reforming the oil downstream sector, get the National Assembly to repeal the Railways Act 1955 and give further tax relief to companies and individuals. This will spur savings and boost sales of manufacturers, who will in turn be able to produce and provide jobs.
Without adequate power supply, the economy will continue to limber. Generation, which currently oscillates between 2,000 and 5,000 megawatts, is grossly inadequate to power rapid economic growth. The World Bank says energy makes possible the investments, innovations and new industries that are the engines of jobs, inclusive growth and shared prosperity for entire economies. The present power sector players, especially the DisCos cannot provide the engines. The Buhari regime should stop beating around the bush and give the power sector the bitter pill it deserves.
