BusinessDay
Nigeria's leading finance and market intelligence news report.

FG should tap local potentials to address unemployment

Nigeria’s unemployment rate at 33.3 percent is among the highest in the world. According to the nation’s data agency, the National Bureau of Statistics (NBS), out of the country’s labour force of 69.7 million people, 30.6 million are fully employed, 15.9 million work for between 20 to 39 hours, 11 million work for 1 to 19 hours, and 12.2 million did nothing and that raises the total number of able-bodied and willing but unemployed Nigerians to 23.1 million.

In 2020, Nigeria’s total working age population was 122 million, and the number of those who were able but not willing to work was 52.4 million. The unemployment data gets more interesting if one considers the fact that, as at the end of the second quarter of 2020 when the working-age population was 116.9 million, the labour force was 80.3 million while those not in labour force was 36.6 million.

Read Also: Low-wage manufacturing jobs can dent Nigeria’s unemployment

However, by December 2020 when Nigeria’s working-age population was 122.05 million, only 69.7 million was in the labour force while a staggering figure of 52.4 million did not make themselves available for the labour market. This implies that in six months, 15.8 million Nigerians withdrew themselves from the labour market. This is a clear sign of disenchantment.

The absence of a strategic master plan to address this problem is turning Nigeria into an unsafe abode for everyone. The rise in insecurity has overwhelmed policymakers and government officials to the point that when you think a social upheaval has been solved, another problem will surface anywhere that makes the country even more unsafe.

Banditry, kidnapping and other social upheavals have taken a new dimension with the attendant loss of lives, highly skilled military personnel and resources. To some extent, these social vices have been linked to unemployment and poverty.

The onerous task before Nigerian policymakers is what should be done to drastically reduce unemployment?

Of course, the federal government has implemented so many models targeting the poor, such as the N-Power program, marketmoni, tradermoni, among others. They might not have been the appropriate models for Nigeria in view of the rising unemployment rate. In this regard, there is an urgent need for a new approach to address the escalating unemployment situation in the country.

One of the new approaches to solving Nigeria’s escalating unemployment problem is to tap the potential of government’s agencies such as the Federal Institute of Industrial Research Oshodi (FIIRO). The institute has an untapped capacity which with additional support for its activities, could help many unemployed youths become employers of labour, while SMEs operating at a smaller scale could have their capacities expanded. Nigeria has about 41 million MSMEs but doubt remains if all of them are active.

FIIRO will be very useful in reversing the upsurge in the importation of agricultural produce. Available trade data shows that importation of agricultural produce surged to a five-year high in 2020 compared with 2019. Nigeria imported N1.2 trillion worth of food products between January and September 2020 compared to N726 billion in the corresponding period in 2019. This is in spite of the huge investment the federal government, through the Central Bank of Nigeria has committed to the agricultural sector. With banditry and clashes between farmers and herders not abating, the worth of food imports will rise further in 2021.

FIIRO has the capacity to train Nigerians to turn some of the local resources into substitutes that can replace most imported products especially in soap making, body creams, cassava starch, tomato paste, animal feeds, and fruit juice production, among others. The materials to produce them are wasting away because farmers still record huge post-harvest losses.

Meanwhile, for the exploitation of local capacity to deliver the desired results, power generation has to be fixed. It is on record that a significant part of SME operating costs is spent on alternative power generation. Most SMEs cannot afford this which is why the delinquent rate among small businesses is very high in Nigeria.

Nigeria is a very large market for shrewd businesses, but the supporting conditions and environment have to be made available. The government should tap into the huge consumption expenditure, the majority of which goes to foreign farmers, firms and organisations, by devising means to retain a large chunk of it at home by looking inwards such as by fully utilising the potential of its agencies. Apart from creating the needed jobs and reducing the number of unemployed youths, there will be less pressure on Nigeria’s external reserves.

Whatsapp mobile

Get real time updates directly on you device, subscribe now.