That EU advice on Nigeria’s unemployment – Punch

Concerns from within and outside our shores about the country’s unemployment scourge are genuine. With about 40 per cent of the youth jobless, and economic recovery slowing down, the European Union has advised the government to act fast to tame the attendant social upheaval.

The Head of the EU Delegation to Nigeria during a recent summit, Ketil Karlsen, said it was out of the EU’s concern that it initiated a skills acquisition programme for 17,000 adolescent boys and girls, which would empower them to change their lives. But he cautioned the Nigerian authorities not be deluded into thinking that development partners alone will reverse the crisis. He was emphatic, “The main responsibility should always be with the authorities (government) of Nigeria; and frankly, it should be like that.”

Besides the adolescents, unemployment among graduates, 500,000 of whom are reportedly thrown into the labour market annually, is a conundrum, which the federal and state governments have no hands-on approach to tackling. The United Nations report on Poverty-in-Nigeria, released last year, stressed that youth unemployment at 42 per cent in 2016 was a source of despair and criminality – all social challenges on the rise daily.

Markedly, kidnapping, seemingly becoming “a booming business,” has been attributed to youth unemployment; so is armed robbery. A Senior Advocate of Nigeria, Mike Ozekhome, kidnapped and held for 20 days in 2013, confirmed this nexus with the revelation that his kidnappers were frustrated, unemployed graduates.  He said some of them confessed they had been “unemployed for five years or more after having finished from university.”

The National Bureau of Statistics says that combined youth unemployment and under-employment in the last quarter of 2017 was 52.65 per cent. This represents about 22.64 million people between the ages of 15 and 35 years. The trend has not changed with lack of pragmatic policies and commitment of political leaders to making the manufacturing sector and small and medium scale enterprises to operate optimally. The two lead in job creation in most economies.

A key sub-sector – textile industry – once thrived in doing so for the country. Unfortunately, government has not been able to take the bull by the horns in assessing the economic dynamics that underpinned its collapse and coming up with a remedial template. The then Minister of State for Industry and Trade, Aisha Abubakar, in June affirmed its effectiveness as a tool in employment generation with her observation that “at its height, the sector had created over 800,000 jobs, representing 25 per cent of the total number of jobs in the manufacturing sector, second only to the government in the employment of labour.”

The golden era was between 1985 and 1991, when the landscapes of Lagos, Kano, Kaduna, Zaria, Aba and others were replete with 175 textile manufacturing firms. Regrettably, all but 27 of them have gone aground. Revival lies only in an aggressive policy response: stopping the China invasion of our markets with its cheap textile products with an effective tariff regime, strict enforcement of extant regulations against contraband and punishing tainted customs officials and errant businessmen that routinely compromise the policy.

There are some of the youth with creative capacity to provide jobs for themselves and even become employers of labour in the ICT, entertainment and the agriculture value chain, but are daily being manacled by Nigeria’s never-ending energy crisis. Energy output monthly has vacillated between 3,000 and 5,000 megawatts for more than a decade, despite the billions of dollars sunk into revamping it. The economy reportedly requires about 25,000MW to achieve its productive potential.

Agriculture has the potential to provide millions of jobs. The sector should be fully harnessed by the various state and federal governments to achieve this goal. But the Federal Government should think beyond the Anchor Borrowers’ Programme for rice production by devising a policy response that would exploit the huge value chain that exists in agriculture for employment generation.

Youth unemployment so challenged the previous administration that it initiated the “YouWin Programme.” Under President Muhammadu Buhari, the story is the same, typified by the National Social Investment and Government Enterprises Programmes. While all the schemes are well-intentioned, they are at best tokenism, which can hardly delay the social implosion unemployment as high as Nigeria’s can trigger.

Opening up the economy for the private sector to thrive will create massive jobs. Difficulty in access to credit has hampered the production capacity of industries, sparking thousands of job losses. Consequently, the managers of the economy must find a solution to the 30 per cent lending rate (up to 40 per cent in some sectors), as the official benchmark lending rate of 14 per cent is ineffectual in moderating credit. Templates in other African economies should inspire action: capped at four percentage points above the 9.5 per cent central bank’s benchmark rate in Kenya; Cote d’Ivoire 5.2 per cent, South Africa 6.7 per cent (from November 22 this year) and Ethiopia 5.16 per cent. These rates are incentives to economic expansion and job creation.

Nigeria’s Ease of Doing Business, which dropped from 145th in 2018 to the 146th position in the 2019 rankings, remains a disincentive to economic fecundity and job creation and failure to privatise our railway transport sector has meant closing the door to thousands of potential jobs.

Therefore, the country has to learn from Britain’s privatisation of its railways under the Margaret Thatcher administration. It created 212,000 jobs and £3.9 billion in annual tax receipts, according to the Rail Discovery Group. This suggests that private capital should be allowed to fix Nigeria’s decrepit rail transport to unleash jobs, rather than engage in the folly of shopping for Chinese loans as the country courts another era of disaster in sectoral monopoly.

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