Un­em­ploy­ment: Toy­ing with tick­ing time bomb

The Punch - - EDITORIAL -

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.

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