Unemployment: Toying with ticking time bomb – Punch
With a forecast by the World Bank that Africa’s most populous country urgently requires millions of jobs to avert an implosion, it should be all hands on deck, to promote inclusive economic growth. Describing the situation as alarming, the global lender says the country needs 30 million jobs by 2030, just to make do. With the economy struggling, this creates a deep sense of helplessness because 2030 is just 10 years away.
Reflectively, the World Bank projection implies that the economy has to create three million jobs per annum this decade. In the five years to 2018, data from the bank specified that 19 million Nigerians entered the labour market, but the economy created 3.5 million jobs in that period. This leaves a huge shortfall of 15.5 million jobless people. “Between 2015 and 2018, the number of unemployed quadrupled and the unemployment rate reached 23 per cent,” the bank said in its latest Nigeria Economic Update. For the National Bureau of Statistics, it is 23.10 per cent. The country created 450,000 jobs between the third quarter of 2017 and Q3 2018, although many more trooped into the job market. The NBS, which put underemployment at 20.10 per cent, reported that, as of 2018, only 70 million were employed full- or part-time of the 90 million active in the labour force, leaving 20 million unemployed.
The disproportionate rates are exacerbated by continuous job losses. Manufacturers and service providers are unable to employ because of the harsh business environment. Agriculture is no more attractive due to rural-urban migration worsened by the Boko Haram terrorism in the North-East, banditry in the North-West and the Fulani herdsmen attacks on farming communities in other parts of the country.
Worse, population is galloping at 2.6 per cent annually, growing faster than the economy, which grew at an average of 2.0 per cent in 2018 and 2019. Already, Nigeria ($397 billion GDP), currently with a 200 million population, is projected to hit 401.3 million by 2050. By that time, it will be the third most populous country in the world after China ($12.24 trillion GDP) and India ($2.59 trillion GDP), overtaking the United States ($19.39 trillion GDP).
The population explosion imposes enormous pressure on the economy, the job market and social infrastructure. As the quality of employment declines, extreme poverty is on the rampage. The NBS projects that, in 2020, unemployment is likely to inch towards the 33.5 per cent mark. This raises the fear of a time bomb.
Without an institutionalised social welfare scheme in the country, all the unemployed depend on are just promises and ill-defined social benefit schemes. The Buhari regime is exaggerating the success of schemes like TraderMoni, MarketMoni and FarmerMoni, disbursing non-collateralised loans of between N5,000 and N15,000 to the masses under the National Social Investment Office. The impact is lame: the World Poverty Clock says, every minute, six Nigerians fall into extreme poverty. It stated that the number of extremely poor Nigerians jumped from 91.50 million in April 2019 to 94.47 million in October 2019.
In tow, the target of the President, Major General Muhammadu Buhari (retd.), to lift 100 million Nigerians out of poverty in 10 years, without any sustainable policy aimed at massive job creation, is paradoxical. The sub-national governments are even guiltier. Of those 36 federating units, only Lagos, Ondo, Rivers and Enugu reduced unemployment in their states in Q3 2018. Akwa Ibom (37.7 per cent), Rivers (36.4), Bayelsa (32.6), Abia (31.6) and Borno (31.4) recorded the highest unemployment rates that quarter, the NBS said. This is the dire consequence of the atomisation of the states, and Nigeria’s inverted federalism. In its “States of states” 2019 report, BudgIT (an NGO), stated that 33 states could not survive without the monthly federal allocation. These states cannot, therefore, boost the investment activities needed for job creation by private capital.
Against sound economic practices, Nigeria is import dependent, financing jobs in producer countries. Its imports include refined petroleum products, palm oil, textiles, medicines, steel products, footwear, raw sugar, rice and vehicles, a misnomer that puts its economy under severe strain. In the past five years, Nigeria’s exports have fallen from $88.9 billion to an annual average of $47 billion, according to the IMF calculations. Unfortunately, much of the export is crude oil, which is $36.9 billion annually. This culture rather exports jobs, instead of creating them.
Conversely, the strength of the largest economy in Europe – Germany – is based on “exporting high-quality goods,” its government said. In 2017, it grossed $1.44 trillion from exports. It intertwines with the report by Eurostat, the European Union’s data arm, that from a jobless rate of 5.1 per cent in August 2019, Germany experienced a rate of 4.9 per cent last September.
Faced with an unemployment crisis, Franklin Roosevelt, the 32nd president of the United States, said: “Do something. If it works, do more of it. If it doesn’t, do something else.” This newspaper has consistently affirmed that the present atrophied political structure can never deliver stellar economic growth and national development. Certainly, the current sharing system induces parasitism, indolence, graft, joblessness and poverty. To reverse the peculiarity that has turned the federating units into beggar states that lack the competitive spirit, true federalism has to take centre stage. In this, states will become thriving economic units capable of superintending their own fate, just like California, New York and other states have stood out as independent economic heavyweights in America.
Creating more and better jobs requires economic transformation hinged on the promotion of economic complexity and productive knowledge. Government at all levels should look at what has worked best to create jobs, focusing on sectors that have the highest potential. Resolving the logjam in the power sector should be the starting point. The private sector, the main engine of job growth, should be energised to grow the economy. While both the manufacturing and agricultural sectors still hold great potential in job creation, it is essential to harness the technological innovation, cognitive skills and entrepreneurship that the digital age has unleashed, especially for the youth.