Nigerians bemoan rate of unemployment, seek action
SOME have described it as a time bomb, while others consider it a disaster waiting to happen. The general consensus is that the rising unemployment trend in the country portends grave danger.
Indeed, in a recent interview with The Guardian, the Director-General, Nigeria Employers’ Consultative Association (NECA), Segun Oshinowo, likened the unemployment situation to a gun pointed at Nigeria’s head, with the hope that it would not fire.
Professor of Economics, Pat Utomi, wondered why Nigeria continues to experience unemployment growth despite its rating as one of the fastest growing economies in the world.
The statistics from Nigeria Bureau of Statistics (NBS), though contested as not being true representation of the reality on ground, do not call for cheer.
It said the unemployment rate in Nigeria between 2006 and 2011 averaged 14.6 per cent, noting that it reached an all time high of 23.9 per cent in December 2011 from a record low of 5.3 per cent in December 2006.
In its recent survey, NBS showed that the national unemployment rate increased to 23.9 per cent in 2011 compared to 21.1 per cent in 2010 and 19.7 per cent in 2009.
Similarly, over 1.37 million students were enrolled in universities, polytechnics and colleges of education in 2006 and another 1.98 million in 2007. Given that most courses are completed in four to five years, many of these 3.2 million students that enrolled in 2006 and 2007 have entered the Labour force in 2010 and 2011.
Studies on industrial development of different countries have shown that the informal sector constitutes an integral part in the overall industrial sector and play an active role in the growth and development of these countries. These enterprises contribute significantly to the employment generation and output growth of different developed and developing countries.
In Nigeria, this sub-sector accounts for about 70 per cent of the total industrial employment, generates about 6.2 per cent of the aggregate employment in the United States, 22.3 per cent in China, about 80 per cent in India, as well as about 50 per cent employment in Israel.
The foregoing therefore points to the fact that the informal sector, given the needed support and regulatory frame-work, could be a major player in the unemployment fight saga in Nigeria, as well as in other developing countries.
Recently, the Manufacturers Association of Nigeria (MAN) in its yearly report disclosed that about 834 factories were closed across all the geo-political zones with over 100,000 job losses.
The challenges with the sector have been that of power, smuggling, unrestrained importation of fake and sub-standard textile materials, absence of clear industrial policy, high cost of Low Pour Fuel Oil (LPFO) otherwise known as black oil, and interest-rate instability.
Others are multiple taxation, low demand for made in Nigeria goods, low level of technology, poor water supply and transportation, and high cost of raw materials.
Nigeria textile industry was once the finest and most vibrant textile industry in the world, because in the 80s, the industry provided about 15,000 direct jobs with well over 250 functional factories scattered all over the federation, especially in the northern part of the country.
Illustrating with the statistics from the MAN, review between 2002 and 2007, the employment dropped from 2,841,083 in 2002 to 1,027,799 in 2007.
Though, things seem to be picking up for the industrial sector, as the association said during its yearly general meeting recently, that employment generated by the sector grew marginally from 966,395 in 2010 to 1,105,448 in 2011.
The Food, Beverage and Tobacco Sector in 2002, generated 372,209. In 2003, it generated 322,630. In 2004, (254,549); in 2005, (245,678); in 2006, (273,728) and in 2007, (274,690).
The Textile Append and Footwear Sector in 2002 generated 80,392 employments. In 2003, it generated 88,088 while in 2004 (574,340); in 2005, (40,430); in 2006, (37,171) and in 2007, (39,968). For the Wood and Wood Products, in 2002, the sector generated 165,814; in 2003, (166,892); in 2004, (136,053); in 2005, (89,793); in 2006, (35,207) and in 2007, (62,543).
The Pulp, Paper and Publishing Sector generated 152,863 in 2002; in 2003, (128,172); in 2004, (200,845); in 2005 (40,337); in 2006, (48,950) and in 2007, (46,429).
The Chemical and Pharmaceutical Sector generated 142,896 in 2002; in 2003, (122,468); in 2004, (65,581); in 2005, (56,360); in 2006, (67,563) and in 2007, (72,253).
The Non-Metallic Mineral Products generated 94,038 in 2002; in 2003, (101,181); in 2004, (104,611); in 2005, (160,660); in 2006, (130,695) and in 2007, (147,517). The Domestic/Industrial, Plastic, Rubber and Foam Sector generated 148,302 in 2002; in 2003, (158,066); in 2004, (106,785); in 2005, (150,750); in 2006, (156,005) and in 2007, (163,419). The Electrical and Electronics Sector generated a total of 76,000 in 2002; in 2003, (69,318); in 2004, (87,325); in 2005, (90,340); in 2006, (76,955) and in 2007, (88,841).
The Basic Metal, Iron and Steel Sector generated the sum of 87,149 in 2002; in 2003, (82,181); in 2004, (80,897); in 2005, (110,890); in 2006, (116,206) and in 2007, (99,408).
Motor Vehicles and Miscellaneous Assembly generated 75,756 in 2002; in 2003, (71,561); in 2004, (78,330); in 2005, (55,468); in 2006, (63,380) and in 2007, (32,631).
According to Prof. Pat Utomi, Nigeria, despite being rated in some quarters as one of the growing economies in the world, is experiencing jobless growth.
“My biggest fear is that the rate at which joblessness is going is like a time bomb waiting to explode,” he declared.
He added that Nigeria’s problems have become aggravated because the country depends almost entirely on oil, which prices were fast dropping.
The former presidential aspirant further disclosed that the West African economic index is mainly experiencing numeric growth while Africa’s major economic growth comes from Southern Africa.
The key factors which, according to him, should be considered as the way forward, and which determine rapid economic growth, are entrepreneurship, human capital, culture, policy choice, leadership and institutions. These factors, according to Utomi, are the drivers of an economy.
Institutions, according to the academic, are a settled habit of the community, adding, “institutions set boundaries to conduct and reduce uncertainties.”
He, however, declared, “we live in a high transaction economy because our institutions are weak.”
He further stressed that emphasis should be placed on the nation’s value system, because “value shapes human progress.”
The Director General of the Small and Medium Enterprises Development Agency of Nigeria, Alhaji Muhammad Nadada Umar, said that misplaced priority killed small businesses in the country.
He said more than 50 years after political independence, Nigeria has no plan or culture for the development of small and medium enterprises until recently which accounts for poor entrepreneurial skills in the country.
He said all this while, successive governments only concentrated on academic curricula development after which the graduates would fall back to wait for white-collar jobs, which scarcely exist.
Umar said yearly, universities graduate about four million people with less than 200,000 getting jobs “because we inherited a culture that once you graduate, you get a job.”
He added: “The unemployment challenge is so bad in the country that even if two million people are given jobs on a quarterly basis, it will still not salvage the situation.”
President of the National Association of Small and Medium Scale Enterprises, Alhaji Garba Ibrahim called for the return of the suspended Small and Medium Enterprises Equity Investment Scheme by the Central Bank of Nigeria.
He said the scheme had solved the problem of access to funds to many SMEs, as the participating banks felt comfortable to grant loans at lower rates to them.
Oshinowo said government’s projection on the economy was yet to synchronise with the reality, even as he faulted NBS’ statistics.
He said: “If we are talking about good governance, it is not figures that will showcase such, but quality of life of the people. We should be looking at things like accessibility to health and additional jobs that had been created in the last six months. To the best of knowledge from interacting with Nigerians and observing happenings around, one cannot really say that there has been any significant improvement in this economy in the last six months.”
Oshinowo noted that the Gross Domestic Product (GDP) growth rate might be saying something to the contrary, adding that “government might say that they have posted 6.5 or 7.0 per cent but when you really look at the facts on the street, how many jobs have we created? To what extent has the quality of life of Nigerians been significantly improved in the last six months? How many businesses have come on stream?”
He added that “currently, we have started a survey on the health of our member companies, especially those in the North, and from the discussions we’ve had with them, we’ve been told that sales had gone down by 25 per cent. And if the trend should continue by the end of the year, quite a number of them will have to downsize. So, the outlook is grim, I must say.”