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Opinions of Monday, 7 September 2020

Columnist: Economic Confidential

Musing on Nigeria’s disturbing unemployment rate

Musing on Nigeria’s Disturbing Unemployment Rate

No prize for guessing that Nigeria’s unemployment crisis is getting worse. But that is not all, it is also casting an ominous pall on the country.

But do our leaders at the state and federal levels worry about a recent report by the National Bureau of Statistics (NBS)? The report asserted that after a 20-month interval on the nation’s unemployment rate, indicating that unemployment rose to 27.1 per cent in the second quarter of 2020 from the 23.1 per cent recorded in Q3 2018.

The NBS in its “Labour Force Statistics: Unemployment and Underemployment Report,” noted that the unemployment rate among young people (15-34 years) was 34.9 per cent, while underemployment for the same group rose to 28.2 per cent from 25.7 per cent in Q3 2018.

The report also added: “The number of persons in the labour force (people within ages 15-64, who are able and willing to work) was estimated to be 80,291,894. It was 11.3 per cent less than the number of persons in Q3 2018.”

A critical appraisal of the unemployed youths’ percentage (in a population of about 200 million) according to Worldometer, an online data provider, showed an alarming trend as the number exceeds the populations of some African countries.

Worrisomely, unemployment (34.9 per cent) and underemployment (28.1 per cent) rates among youths totalled 63 per cent, thus placing Nigeria uncomfortably ahead among the worst cases globally. Others in its league are Lesotho (28.2 per cent), Swaziland (26.5), Occupied Palestinian Territories (26.4) and Mozambique (24.8).

The countries with the lowest unemployment rates at the end of 2019 are Qatar (0.1 per cent), Cambodia (0.3), Niger (0.4), Belarus (0.5), Laos (0.7), Myanmar (0.8), Bahrain (1.2), Tonga (1.2), Thailand (1.4) and Kuwait (2.0). For the world’s largest economies, the unemployment levels are Japan (2.4 per cent), India (3.5), Germany (3.6), United Kingdom (3.9), United States (4.1), China (4.8), Canada (5.9), France (8.6) and Italy (10.4).

The situation is a ticking bomb already worsened by the COVID-19 pandemic. It is rudely nudging the country’s leadership to take proactive steps to avert a national crisis.

It is trite to posit that Nigeria’s oil-based mono-product economy has long robbed its leaders of cogent ideas to diversify ingeniously from crude oil and gas to create sustainable jobs for its teeming youths. This is not the time for creating jobs on paper, exhibiting a lazy approach to governance and rehashing superfluous economic ideas and policies.

The government should explore the non-oil sector pragmatically, especially agricultural commodities and solid minerals and aggressively open up new job opportunities through private-sector participation. It must likewise refrain from having its fingers in the pie of every big project, while also restricting itself to regulatory roles and facilitate private capital to take charge.

Specifically, it should hand over rail, seaports, steel projects among others to the private sector and urge investors to open up the high-capacity job-yielding sector of the economy. Its continued retention of loss-making petroleum refineries is a long-running scandal.

The country’s economy needs massive attacks on all fronts; it should not lean solely on expected profits from long-term project initiatives. The government predicted a recession in the Q4 this year as the Gross Domestic Product was projected by the NBS to contract by 4.2 per cent in 2020, as against the previous projected growth of 2.9 per cent.

Without gainsaying, Nigerian youths need quality, productive employment and not ludicrous and temporary menial jobs poorly designed to serve as a stopgap for a few beneficiaries in a country gripped by massive unemployment. Such tokenism is evident in the N-Power and the newly-conceived 774,000 public works scheme, over which the Ministry of Labour and Productivity and the National Assembly are shamelessly squabbling.

Small and medium scale enterprises should instead be encouraged through the provision of seed capital and an enabling environment. Efforts to improve the ease of doing business should be stepped up, including ending indiscriminate levies and taxes to unburden businesses.

Nigeria is currently in the throes of security challenges and no one will be willing to invest in an insecure environment.

The unemployment murk covering the country has sent many youths into sex slavery, irregular migration, fraudulent acts and depression amid the signal failure of the government to stem the tide. State governments must initiate sub-national economic blueprints to revive the economy beyond the customary monthly receipt of federal allocations without corresponding yields in either economic buoyancy or revenue generation.

*Rahma is a Finance/Business Correspondent with Economic Confidential in Abuja.*

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