JOBLESSNESS is becoming a way of life in Nigeria. In its just-released report that covered the third quarter of 2016, the National Bureau of Statistics paints a grim picture: 27.1 million citizens are unemployed. Companies and manufacturing concerns are closing down; others are shedding jobs in an effort to stay afloat. To stem the ugly tide and put people back to work, government needs to implement radically creative measures that will enable businesses to reopen their shut gates.
Really, the new figure from the NBS is not surprising. In Q3 alone, the economy – assailed by recession and three straight quarters of negative growth between January and October 2016 – destroyed 272,499 full-time jobs. Conversely, the NBS noted that 782,886 active people entered the labour force, but the economy generated only 187,226 jobs. This is frightening. Year-on-year, job losses amounted to 60.6 per cent. In reality, Nigeria had been recording what economic experts call a non-job growth during its oil boom period.
Although it experienced high oil revenues earlier this decade, the government did not spend wisely on capital projects, or boost industry, agriculture and savings. It allowed infrastructure to deteriorate. Corruption and dependence on importation caused a severe bleeding of resources when the collapse of global crude prices started in mid-2014.
The NBS says, “With the Nigerian labour force population rising by a five-year average of over 2.6 million annually, the economy needs to generate the same level of jobs annually just to hold the unemployment rate at the current level of 13.9 per cent.” But the 13.9 per cent does not give the comprehensive picture. This is because of a new method of calculation adopted in the last dispensation. It separates unemployment and under-employment (which currently stands at 19.7 per cent). The pragmatic rate comes when the two are merged: it gives 33.6 per cent. This is a national crisis.
Notably, youths are affected the most. The NBS’s 2016 Q2 report says that there are 17.6 million unemployed/underemployed youths. Socially, this is dangerous. To fight unemployment, the three tiers of government need to roll out new policies that will spur growth. For now, it seems our economic managers are blind to the impact of unemployment and how to exit the recession. For example, in 2017, the Federal Government and 36 state governments have a total budget of N13.5 trillion. Out of this, recurrent expenditure is estimated to gulp N6.51 trillion. This is bad economics. It harms capital expenditure, which can boost job creation.
Government blames the crash in oil prices for this, which has essentially caused the naira to crash to an all-time low against the US dollar. On Monday, it exchanged at N499 to $1 at the parallel market. Also, because of militant activities in the Niger Delta that have restricted oil output, Nigeria cannot meet its daily production quota of 2.2 million barrels. The effect is that government revenue has reduced seriously. Consequently, companies are closing down because they cannot access the forex they need to import raw materials.
Because of low revenue, the public sector is not hiring. State governments are struggling to pay salaries and are not employing. To stop job destruction, it is critical for government to identify the constraints to job creation. Thus, government must free the economy from public control. It is killing it. Fortunately, policies that inhibit the economy can be reformed by adopting free market policies.
The United Nations’ World Development Report 2013 stresses the role of the private sector-led growth in job creation. “Governments play a vital enabling role by creating a business environment that enhances the demand for labour,” says (former) World Bank Senior Economist, Kaushik Basu.
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