Nigeria’s Unemployment Crucible: A Move towards Decent Jobs for All

At Spurt! We are always looking to amplify solutions to critical and specific challenges in Sub Saharan Africa. This week, we reviewed two articles: Next Africa: Nigeria Heads For A Record Nobody Wants by Alonso Soto and Antony Sguazzin of Bloomberg and The Next Wave: Nigeria’s Unemployment Gunpowder by Alexander O. Onukuwe of Techcabal.

The state in East Africa looks dire, with Kenya leading the pack in unemployment. As economic growth is a prerequisite for employment, Nigeria’s turbulent economic growth has rationalised the dismal employment statistics over the last seven years.

According to Brookings Institution, Africa’s “youth employment crisis” should be framed as a missing jobs crisis. Many countries, including Nigeria, have implemented initiatives like the Youth Employment Action Plan by the Federal Ministry of youth development to help remedy the jobs crisis. Still, the interventions have often been relatively limited in scale and ill targeted. As a result, structural issues that lead to few opportunities for decent work for people of all ages remain unaddressed.

The curious case of Nigeria’s unemployment numbers tells a story of misaligned macroeconomic priorities. The economy is heavily dependent on natural resources. While this has historically been a great contributor to the country’s GDP, government revenue and export earnings, the sector offers employment to less than 1% of Africa’s workforce.

As Nigeria’s population continues to grow at an annual rate of 3.5%, the current situation is about to get worse. Just within a year, the price Nigerians pay for food has doubled. The rise in food prices presents an unfortunate case for the country as a hungry and unemployed population can only result in civil unrest that can potentially take the country down a slippery path.

A worrying trend to be addressed with urgency is the severe lack of vibrant industries to absorb university graduates also shows. Inconsistent employment policies and a lack of vital information and data to be leveraged by policymakers to facilitate effective planning are some of the supply factors that have exacerbated Nigeria’s sad situation.

The two recent recessions and the COVID-19 pandemic have also considerably contributed to the 33.9% unemployment rate. The future seems bleak as many countries experience the third wave of COVID-19.

Public policies in Nigeria geared towards remedying the unemployment headache have previously failed due to; inadequate finances, poor implementation, lack of quality leadership to steer the process forward, and inconsistent policies.

The supply-side factors have heavily concentrated on youth empowerment clamped as a homogenous group without setting aside distinctions that could further allow segmentation based on willingness to learn, education levels and skills required.

To address the factors that inhibit labour demand, policymakers and other key players need to take a long-term perspective. A long term view would entail the growth and expansion of industries based on the available local resources and the specific industries’ value chain activities. Infrastructure development, significantly advancing access to electricity, will revolutionise employment creation and further spur industries’ growth.

To succeed in its core mandate of reducing unemployment, Nigeria’s government needs to focus on targeted strategies that take a multi-sectoral approach to sectors with the most significant job creation potential, like agriculture, manufacturing and the service industry.

There needs to be a radical shift in policymakers investing in youth-specific initiatives. Policymakers should instead focus on addressing the barriers that prevent people of all ages from accessing decent work. Government partnerships with foreign agencies need to reshape the objectives and impact measurement of the youth-centric programmes. Some quick levers that offer short term mitigation of the current crisis, according to Brookings, include the following:

· Industrial policy to include labour-intensive manufacturing and services.

· Infrastructure investments.

· Better regional integrations (through initiatives like AfCFTA.)

· Investment in social protection mechanisms such as cash transfers and implementing universal basic income.