The current official unemployment rate is about 33% using the Bureau of Statistics report for last year. Unofficial sources indicate figures close to 50%.
Tunde has just graduated from a university. He has come out with a first-class degree. He worked hard and spent many a night burning the candle. He knows that jobs are hard to find. Certainly, a first-class degree would make him top pick when it mattered.
Tunde in a few months will likely suffer some form of disappointment. He might get disillusioned by the job market. He might feel education is a waste of time. A feeling that might be reinforced when he sees those with poorer classes of degrees find jobs or those without education, seeming start to have purchasing power while he still has to squat with his parents. This becomes worse when some mock his class of degree.
The current official unemployment rate is about 33% using the Bureau of Statistics report for last year. Unofficial sources indicate figures close to 50%. A frightening statistic. Why is unemployment that high?
Employment is driven by economic growth and other factors. Growth is driven by productivity. A country is said to be productive when there is a deployment of the necessary skills, attitudes and technical proficiency that drive output relative to inputs. It is a convergence of production factors such as land, capital, access to technical equipment, finance and then labour to have matching or exceeding inputs.
Nigeria suffers deficits in all the factors needed for productivity. The Nigerian economy is driven by crude oil sales, accounting for 45% of total revenue, contributing only 8% of GDP but driving 65% of total GDP. The oil sector, despite that level of contribution, is a technology innovative one: it does not create jobs directly and therefore does not employ significant numbers. Nigerian economic growth rate is estimated at 4% while population growth rate is about 3%. The economy is not growing at the rate that is necessary to create employment, relative to population. Given the rate at which our population grows, the economy must grow in double digits to produce jobs. The growth must be multi sectoral and underpinned by productivity.
Now there is the argument that many graduates are unemployable. What does that mean? In the opening narrative, Tunde has a first-class degree. But beyond the degree, Tunde might not have skills necessary for 21st century realities. He might not be proficient in the use of technology. He might not have problem solving abilities. He might also have a degree for an industry that does not exist or for a technology innovative sector where manpower will be on the decline.
The other narrative is that of poor social skills. Tunde might belong to the generation of youths that are not focused, can’t deliver or work without supervision. Skills that can be developed if identified as a problem.
The challenge to the narrative above of social skill is if these skills are present in other youths in different countries and why the same youth is able to find employment and thrive elsewhere. What makes the difference?
The problem is not the youth. Yes, a minority are unemployable. As a minority exist in similar economies but are retrained and retooled to make them employable. Skills transfer is supported by an internship process that works. Unlike Nigeria, where the structures and institutions exist only on paper.
The question is then where we proceed from? Should we start from the definitions of unemployment, under- employment and which areas can create sustainable jobs? Should there be a review of the curriculum in higher institutions that seem outdated and obsolete? Should we look at the SWIES process for gaps? What can be done with the National Youth Service scheme? Can it be tinkered with?
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Sadly, the most neglected sector where jobs can be created is the most strangulated. The Small and Medium Enterprises (SME) sector. Nations do not add significant numbers of jobs from FDIs. Jobs are created in larger numbers, when SMEs can thrive and are supported with lower interest rates, less taxes and are not seen as cash sources for all the three tiers of government. That is why, the Nigerian economy is not driven by productive service but by rent seeking enterprises.
The word strategic is over bandied. But there must be a strategic rethink of job creation. Unemployment must be a national emergency. You can’t solve the current security challenges if there are no jobs. There can’t be regular jobs if there is insecurity. Enterprise cannot flourish. Stable macroeconomic policies are a key need.
Much has been said about Nigeria’s import dependence. That is an opportunity that our economic management team seem unable to grasp. A thinking country would examine this value chain and cater for a process of import substitution based on real indices rather than embark on border closure and other outdated and unworkable protectionist policies.
A healthy population is a productive one. When hunger rules thinking with poor access to health facilities, how can productivity be enhanced? When every young person holding a laptop walking on the streets in Lagos is under threat of being harassed as an internet fraudster, how do our youths compete in the new digital economy?
There is much to fix to find Tunde a job. Much to develop and deliver. The foundation is refocusing the economy. A good place to start is examining the security architecture, providing some form of social security services, devolving power to the states and local governments. Some will argue what political restructuring does to job creation. The answer is to look at a car design, a bent shaft will not allow adequate gear ratios. Gear ratios contribute to efficiency and better fuel utilisation that now allows a vehicle to reach designed speed. An economy built on poor political framework would not facilitate growth, growth is how jobs are created, jobs are the solution to unemployment.
Ademola Adigun is an Executive Director at Metacura Development Initiative and a social cultural commentator.
