• Tuesday, April 23, 2024
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How Nigeria can tame rising unemployment

‘Hustle’, family support, others top survival mechanisms for unemployed youths

Unemployment has been a challenge facing Nigerians over the years, even though it’s been two years since the National Bureau of Statistics (NBS) released official unemployment data.

The latest data from NBS on unemployment show 33.3 percent for the fourth quarter of 2020, but the Presidential Economic Advisory Committee projected that the rate had increased further to 40 percent.

Nigeria lags in terms of timeliness of unemployment data compared to other African countries such as South Africa’s 32.7 percent unemployment data for Q4 2022, Ghana’s unemployment data at 13.9 percent in Q2 2022 was released in September last year, and Egypt’s 7.2 percent unemployment figure for Q4 2022.

The term unemployment refers to a situation where a person actively searches for employment but is unable to find work. Unemployment is considered to be a key measure of the health of the economy. The most frequently used measure of unemployment is the unemployment rate.

Nigeria needs to create at least 3.6 million net new jobs annually to get unemployment down to 5 percent by 2033, Agora Policy stated in a policy memo.

Agora Policy, a Nigerian think tank and non-profit committed to finding practical solutions to urgent national challenges has outlined how Nigeria can tame rising unemployment in its Policy Memo released April 2023.

Here are the recommendations by Agora Policy about how Nigeria can tame rising unemployment in the broader economy

Resolve broader macroeconomic challenges

Agora Policy said in the memo that Nigeria can solve its rising unemployment challenges by resolving broader macroeconomic challenges that limit growth across the board.

“This includes resolving the dysfunction of multiple rates in the foreign exchange market, and re-focusing the Central Bank of Nigeria (CBN) on its mandate of keeping inflation at optimal levels,” the Nigerian think tank said.

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Targeted infrastructure spending in areas that increase Nigeria’s export competitiveness
Agora Policy also said targeted infrastructure spending in particular areas that increase the competitiveness of Nigeria’s exports can tame rising unemployment.

It said this would include electricity, transport, and telecommunications investments in export processing zones. While citing India as an example, Agora Policy said India’s new foreign trade policy 2023 designated four ‘towns of export excellence’ that will get priority access to export schemes and investments.

Reorganisation of Nigeria’s technical and non-academic learning protocols

The Nigerian think tank said the re-organisation of Nigeria’s technical and non-academic learning protocols to improve specific skills in areas critical for improvements in the competitiveness of targeted sectors can tame rising unemployment.

“This could include trade schools aimed at providing necessary skills for particular sectors. For instance, if the garment sector is a targeted sector it would include starting up or improving on technical schools and certification for fabric cutting or clothing design software,” Agora Policy said.

Develop and implement a strategy to reduce logistics cost

Agora Policy said that developing and implementing a strategy to reduce the costs of logistics, both financial and non-financial, can be a likely path to job creation in Nigeria.

“This could include things like ‘trusted firm’ schemes that allow customs and security procedures to take place inland, at dryland ports for instance, to by-pass time-consuming procedures at official ports.”

Investment in certification, export process training

Agora Policy recommends investing in certification and export processes training in partnership with targeted destination countries to ease the cost of accessing external markets, specifically for SMEs that do not have the financial clout to do this on their own.

As has been argued by some economists, SMEs tend to employ more people per output produced, Agora Policy said, adding that hence, ensuring SMEs participate in an export push can amplify the scale of job creation.

Develop and implement export-driven trade policy

Agora Policy stated that Nigeria needs to develop and implement an export-driven trade policy for labour-intensive value addition for export sectors.

According to the non-profit organisation, this could include fast-tracking implementation modalities for participating in the African Continental Free Trade Agreement (AfCFTA), fast-tracking trade agreements that grant Nigerian export access into large markets, and reducing tariffs completely or introducing transparent reimbursement schemes for imports of intermediary goods for value addition.

Develop a strategy to utilise large diaspora network

Agora Policy recommends the development of a strategy to utilise Nigeria’s large diaspora network as well as a network of embassies and consulates to get Nigerian products into markets around the world.