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Poverty makes more Nigerians quit school for menial jobs

Over 40 million young Nigerians under 29 years could abandon furthering their higher education to join the informal sector over worsening poverty on the continent by 2030, a new World Bank report has said.

The report titled ‘Good Jobs for a New Generation: Delivering Quality Jobs for Young Nigerians After COVID-19’, said about 19.7 million will engage in household agriculture, 13 million in non-farm household enterprises, and 3.9 million holding wage jobs.

This could worsen poverty on the continent as informal sector jobs are unlikely to offer secure pathways out of poverty, the report said.

“Most farms are not commercialized and lack access to key inputs, so farming may not generate the earning needing to lift Nigerians out of poverty and non-farm enterprises are similarly small scale,” Jonathan Lain, Economist at World Bank and one of the authors said at the media briefing of the report that took place on Thursday.

Lain further said that these labour patterns reflect the slow pace of structural transformations in Nigeria.

Over 90.1 million Nigerians are now living in extreme poverty, up from 82.9 million three years ago; according to the World Poverty Clock. It makes a mockery of the Buhari government’s plan to lift 100 million people out of poverty by 2030.

The World Bank findings relied on the Nigeria General Household Survey-Panel (GHS) and the COVID-19 National Longitudinal Phone Survey (NLPS) to draw its conclusions.

“Youth responded to both the 2016 oil recession and Covid-19 crises by leaving school earlier to enter the labor market, thus increasing overall labor supply. Rising labor supply amid chronic job shortages have further widened precarity and informality in Nigeria’s labor market,” the report stated.

Leaving school early to find work could affect the country’s human capital stock, notably through declines in educational attainment, the report said.

It added that the continued underinvestment in human capital may keep Nigeria from harnessing the economic potential of its young population through two main channels: weakening workforce productivity and slowing any fertility transition.

Read also: Nigeria’s economy to grow on oil boost but won’t outpace poverty

Nigeria’s economy has slumped into two recessions within the past five years owing to the collapse of oil prices, disruptions caused by the Covid-19 pandemic and an inability of the government to reform the economy.

The contractions have weakened consumers’ purchasing power, throwing millions into poverty and now precipitating a rush to the job market with limited skills.

According to data from the National Bureau of Statistics (NBS), headline inflation, which serves as a measure of consumer prices, rose by 17 percent in August 2021 while Nigeria’s unemployment rate came to 33.3 percent in 2020.

The report said that between 2015/16 and 2018/19, the share of working-age Nigerians who were working increased from 60.8 percent to 67.3 percent, while the share of young Nigerians who were working jumped even more, from 38.6 percent to 50.7 percent.

It also stated that by February 2021, the share of working-age Nigerians who were working was significantly higher than would be expected, given previous seasonal patterns.

To test the report’s conclusions, BusinessDay sampled the opinion of several young people engaged in menial jobs and found that poverty is the biggest motivation for the leap into the job market even with limited skill sets.

Daniel Ekurume, a 20-year-old domestic worker said he had no plans to attend a university immediately after graduating secondary school three years ago.

“Being the first child of my family, I have a lot of responsibilities at home. My father abandoned us when we were young, so as the man of the house I just have to do my part to support my family,” he said.

Similarly, 23- year old Survival Gabriel, who was unable to finish secondary unlike Ekurume said he engages menial jobs.

“My father is sick, so he is unable to work, while the proceeds from my mother’s catering business is not enough to take care of four kids,” he said.

The NBS data shows that there are 69.7 million people in the labour market, out of which 30.6 million between the ages of 15-34 are fully employed.

A further breakdown of the 30.6 million employed shows the most employed persons are those with Senior School Certificate Examination (9.7million) followed by no education (8.4million) and First School Leaving Certificate (4.2million).

“The economic situation in the country has affected the capacity to retain jobs, create new jobs and sustain people in schools, thereby aggravating the high unemployment crisis,” said Muda Yusuf, former director-general, Lagos Chamber of Commerce and Industry (LCCI).

The World Bank recommends more investments in human capital, recouping learning opportunities lost during the Covid-19 crisis.

This will not only provide workers with the skills needed to prosper in the labor market and create jobs themselves but could also foster an improved standard of living for Nigerians, the report said.

The report also called for macroeconomic reforms to the exchange rate, trade, and fiscal policies to diversify revenue sources away from oil and ignite the structural transformation needed to create good wage jobs.

It is also called rendering help to small enterprises so they can thrive and grow. For farms, this involves research into improved crop and livestock varieties as well as public investment to support storage, transport, and market access could help boost agricultural productivity, the World Bank report said.

For non-farm enterprises, it called for policies that will loosen credit constraints and build the infrastructure and markets on which small businesses rely could bolster productivity, profits, and job creation.

“Evidence-based policy action in these areas can help ensure good jobs are available, enabling Nigeria to seize the demographic dividend of its young population and lay strong foundations for future inclusive growth,” Tara Vishwanath, Lead Economist at World Bank and author of the report advised.

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