Reforms seen boosting jobs for 54m unemployed Nigerians
After his mandatory youth service in 2015, Tunmise, a 26- year- old graduate of Economics, ended up doing menial jobs despite finishing university with good grades.
“I was unable to get a job and, eventually, I had to move back to my parents’ home,” Tunmise said. “Now, I do menial jobs to at least take care of myself, even if I can’t take care of my parents yet.”
Experiences like Tunmise’s are no longer unique in Africa’s biggest economy undermined by a paradox of high unemployment and slow growth.
Lola, a bank cashier, says she earns a net income of N55,000 monthly, almost doubles the country’s minimum wage.
However, the cashier pay cheque is barely enough to get her through the month, especially with two dependents to provide for. Lola insists she is underpaid but remains grateful to have a job.
The plight Nigerian youths, which constitute over 65 percent of a population of over 200 million, mirrors structural deficiencies in the domestic economy.
The majority of 54 million jobless Nigerians are seeking opportunities to travel abroad, fuelling massive brain drain that is hurting the labour quality of Africa’s biggest oil producer.
Analysts are calling for deeper reforms to enable businesses create enough jobs that can control unemployment crisis in the country.
“We need more economic liberalisation and reforms that could open new sectors of growth, similarly to the way we had the telecommunication and pension reforms back in the early 2000s. So, there are opportunities to pursue similar liberalisation efforts that could create jobs,” notes Omotola Abimbola, a macroeconomy analyst at Lagosbased Chapel Hill Denham.
Abimbola says Nigeria needs a long-term commitment to the reforms in the growth areas that will create jobs for the economy and solve perennial unemployment. This solution will also solve another twin evil: poverty.
Around 82.9 million Nigerians are extremely poor, constituting 40.1 percent of the total population with real per capita expenditure below N137,430 in 2019, according to the National Bureau of Statistics’ (NBS) Poverty and Inequality report in May 2020. The World Bank predicted that there would be 95.7 million Nigerians living below the poverty line by 2022.
President Muhammadu Buhari has on several occasions promised to lay the foundations necessary to lift 100 million Nigerians out of poverty. But Nigeria risks the familiar mistake of making contradictory policies as Covid-19 beckons on sweeping reforms. Electricity and petrol subsidies have been removed by the government, but the economy totally needs reforms at all levels, analysts say.
Ayodele Akinwunmi of FSDH Merchant Bank says Nigeria needs a structure to allow the private sector create opportunities in strong growth prospects areas that have the capacity to employ a lot of people, like the solid minerals, oil and gas, exports and agriculture.
“When we are making policy recommendations, we need to look at the realities on ground to ensure that we do not do something that is unrealistic,” Akinwunmi notes.
Data from Index Mundi, a firm that provides detailed data and analysis on countries, show that the dependency ratio of Nigerian youths as of 2015 stood at 83 percent in a country where the provision of welfare is verbally present and physically absent.
On average, out of 10 Nigerian youths, five are unemployed, three are underemployed while two are gainfully employed. According to experts, the pitiable conditions faced by graduates and unemployed Nigerians affect their lifestyle and selfesteem, which in the long run often leads to depression and suicides.
Muda Yusuf, directorgeneral, Lagos Chamber of Commerce and Industry (LCCI), believes that creating an enabling environment for small and medium enterprises (SMES) would have a more impact on employment than focusing on big firms.
“We have about 41.5 million enterprises, according to the NBS. Imagine, two of those enterprises creating one job in a year – that is about 20 million jobs. So, you can see the impact that they make once you create an enabling environment for them,” Yusuf says.
Currently, households are struggling to cope with the impact of the Covid-19 pandemic and are deploying strategies that may have negative long-term consequences on their welfare.
According to a recent report by NBS, in all four states (Lagos, Abuja, Kano and Rivers), at least two-thirds of households had spent their savings to cover their living expenses.