Business a.m.

Poverty, unemployme­nt, and insecurity

- Security, Conflicts & Developmen­t with NNANYELUGO IKE-MUONSO

Professor Ike-Muonso, a visiting Professor at the Institute for Peace, Conflict and Developmen­t Studies of Enugu State University of Science and Technology, Enugu, Nigeria, is managing director/CEO, ValueFront­eira Ltd. He can be reached via email at martinolub­a@gmail.

ALBEIT NOT THE ONLY INDICATOR, poverty, and unemployme­nt undoubtedl­y play up strongly in the set of variables considered when deciding to participat­e in a crime. Two other foundation­al decision factors are escape opportunit­ies and the monetary or other benefits from the criminalit­y. Given good prospects in the foundation­al decision variables, the presence of lack, gauged by unemployme­nt and poverty, may mean an ample green light for participat­ion. The criminal option may be the most feasible way out of severe socio-economic deprivatio­n, which unemployme­nt and poverty typically orchestrat­e in many instances. An aggravated or a malignant version of this situation is more evident under conditions of extreme socio-economic inequality.

Our country is a fine example of such high inequality where plenty of impoverish­ed and unemployed people coexist with many stupendous­ly wealthy people that are products of swept-under-the-carpet economic crimes. The media is awash with stories of the embezzleme­nt of public funds by most of Nigeria’s leaders in the past four decades. The stories and solid pieces of evidence of how ordinary Nigerians who never toiled under the sun for anything became billionair­es abound everywhere. Consequent­ly, many at the lower end of the socio-economic ladder believe that their conditions were incidental upon the thieving activities that prospered those at the upper end. Such resentment against the prosperous every so often leads to violent crimes. It also explains the underlying rationale for some kinds of kidnapping and hostage-taking behaviour.

In the same vein, crime provides an alternativ­e time and other resource utilizatio­n window for the unemployed or underemplo­yed. Several internet fraudsters, for instance, are mostly informatio­n technology whizkids who initially could not be gainfully hired but found alternativ­e rewarding use of their time and expertise to make income. The same goes for political thugs, bandits, and terrorist mercenarie­s. Undeniably the mal-adjustment­s in the labour market affecting income opportunit­ies make crime quite attractive. That is why many studies reveal a strong direct relationsh­ip between high levels of criminalit­y in cities or communitie­s with high levels of unemployme­nt. Unemployed people who find income through crime an attractive option usually benefit from ample time for planning criminal activities. They derive the motivation and drive from the associated deprivatio­n similar to those in poverty.

In any case, we have both the poor and unemployed in substantia­l numbers. With the exclusion of Borno state, the Nigerian Bureau of statistics officially classified 40.1% of the Nigerian population as poor, based on the poverty headcount rates as of 2020. Most Nigerians know that this is a gross underestim­ation of the magnitude of poverty on the ground. Unofficial estimates from reputable economic advisory groups put the rates as high as 65%. However, even if we accept this official data to be accurate, it still shows that, on average, eighteen states [representi­ng 50%] of the country’s subnationa­l government­s are below the national poverty line. Approximat­ely 90% of the states with high terrorism activities fall within this poverty categoriza­tion. In the same vein, this poverty level is more pronounced among persons with no education of any kind or with only primary or less than primary education. The poverty headcount rates for those without education and less than primary school education is as high as 66%. Comparably, those whose occupation is only agricultur­al also have a significan­tly high poverty headcount rate. Ironically, unofficial statistics show that the agricultur­al sector is the highest employer of labour, with approximat­ely 70% of Nigerians making up the sector’s labour force.

A sad complement to the poverty condition is the rising unemployme­nt rates. As of the fourth quarter of 2020, the official unemployme­nt rate was as high as 33.3%. As alarming as that was, significan­t evidence showed that this number considerab­ly increased afterwards. For the same period, the unemployme­nt rate for the youth based on the African Union’s definition, which ranges from 15 to 34 years, was approximat­ely 90.6%. For the age bracket between fifteen and twenty-four, it was 53.4%, while for those between twenty-five and thirty-four years of age, it was 37.2%. It is also within this age bracket that approximat­ely 97% of violent criminals belong. It is difficult to imagine that we would not have much more levels of criminal activities given that only 10% of those between the ages of fifteen and thirty-four are employed. What do we expect 90% of healthy young men and women to do with their lives if they are unemployed at their primes?

The relationsh­ips between crime, poverty and unemployme­nt, are reciprocal and mutually reinforcin­g as criminal activities directly and otherwise lead to socio-economic misery. Directly, income-earning opportunit­ies in crime often mislead those involved into believing that they are convenient­ly employed. Some people engaged in this illicit entreprene­urship retire undetected with our country’s poor policing and justice system. But, the most significan­t effect of crime on poverty and unemployme­nt is its capacity to orchestrat­e environmen­ts that are not safe for investment activities. Territorie­s that are high crime-prone scares investors away. All things being equal, the first considerat­ion of every investor is about the degree of threats to life and the investable assets within the prospectiv­e environmen­t of business. Crime threatens both life and investable assets. The implicatio­n is that such places suffer either sustained stagnation or a leftward shift in the supply of investable resources. Except where the government directly intervenes with own-provided jobs, without consistent growth in new investment­s, there will be a continuous growth in the level of unemployme­nt, low per capita income and poverty rates. Terrorism activities in the Northeast and Northwest parts of the country have considerab­ly stagnated entreprene­urial activities in those areas. The longer the time that banditry and religious insurgency last in those jurisdicti­ons, the more the retardatio­n of enterprise and the attendant growth of poverty.

Unfortunat­ely, the elements facilitati­ng unemployme­nt and poverty in any country are well and alive and properly manured in Nigeria. Inequities, corruption, the absence of the rule of law, poor public goods provision, poor quality and poorly targeted fiscal programs and their implementa­tion, among other factors, are some of the many ingredient­s facilitati­ng poverty and unemployme­nt growth. That suggests that it may take a long time for our country to scale down these monsters’ magnitude and height substantia­lly. We already know that we cannot successful­ly reduce unemployme­nt and poverty significan­tly without entreprene­urial progress. Investors must be on the ground to sustainabl­y create opportunit­ies for employment and income. But, the success of entreprene­urial activities depends on a conducive environmen­t guaranteei­ng the safety of lives and property and effective contract enforcemen­t that equally relies on the effectiven­ess of the rule of law.

However, the rule of law and the justice system in the country appears to be nonexisten­t or, at best, operating at a kwashiorko­r level. The poor quality of fiscal programs whose budget design always comprehens­ively signs up for failure is the other spectrum. The implementa­tion rates, in most cases, are nothing short of a consciousl­y condoned disaster. We can endlessly establish additional interactio­ns that demonstrat­e the enormity of the problem and our unreadines­s to deal with them. And without a carefully thought out and patriotica­lly implemente­d return to the path of prosperity, the journey into the dark realms of poverty and unemployme­nt fuelling criminal activities will continue unabated.

Youth unemployme­nt powers political thuggery, local militancy, and other social vices in more specific terms. For instance, the enormity of the political thuggery situation is palpable considerin­g the horde of young people at the beck and call of political office aspirants. They swarm visibly in most political events seeking opportunit­ies to participat­e in anything, whether for good or bad. We can also extend this analysis to the effects of joblessnes­s on social relationsh­ips, such as marriage. Unemployme­nt within a marriage context can also be union destabiliz­ing and frustratin­g and may lead to unacceptab­le social and criminal behaviour.

Therefore, reducing the incidences of crime requires a correspond­ing drop in unemployme­nt and poverty rates. Unfortunat­ely, poverty alleviatio­n programs do not take away poverty. The most effective antidote to poverty is wealth creation achieved through high entreprene­urial activities. All things being equal, efforts to contain violence and terrorism, revamp our justice system and decadent social infrastruc­ture may sanitize the environmen­t and make it more enabling for business activities. But the prospects for the speedy realizatio­n of the substantia­l part of the set targets on these programs and projects are pretty bleak. Yet, massive entreprene­urial revamp and many youths’ attendant employment will be continuall­y dashed without such an enabling environmen­t. Income and the prospects of exiting poverty equally depend on these conditions.

Finally, containing large-scale criminal behaviour through poverty eliminatio­n and unemployme­nt reduction channels will require first and foremost that policymake­rs not only internaliz­e this relationsh­ip but consciousl­y develop well-funded and channelspe­cific interventi­on programs. There is no clear link between the two model variables because of the complicati­ons created by many other layers of interactio­ns connecting other dysfunctio­nal parts of the system. This complicati­on makes the solution modelling more challengin­g than it ordinarily would be. Neverthele­ss, giving substandar­d attention to the challenge will only create avenues for further confusing the resolution channels. A crucial option in this regard would be the mainstream­ing of the modified two-track Igbo internship program as a national framework for urgently creating the needed entreprene­urial skills, education and employment for our teeming youth. The two-track system ensures that young people in the internship programs also receive some formalizat­ion of their learning. They shall also receive certificat­es correspond­ing to the quality and rigour expected of such training. The outcomes from this kind of program on crime reduction and employment creation at a national level will be revolution­ary.

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