State governments’ inability to create the environment for the private sector to create jobs is worsening the nation’s job outlook.
In October 2024, the World Bank revealed that only 12.4 percent of Nigerians were primarily engaged in wage jobs. Despite this revelation, many state governors appear oblivious to this economic quagmire.
A cursory analysis of states’ budgets performance for 2024 Q3 shows that governors have failed to prioritise initiatives targeted at boosting job creation, with Lagos State being a relative exception.
While wage jobs are crucial for lifting people out of poverty, such opportunities remain scarce across all levels of the economy.
The Nigeria Bureau of Statistics (NBS) reported that 133 million Nigerians were multidimensionally poor as of 2022. This alarming figure reflects the cumulative poverty levels across all states, just as unemployment data mirrors the economic conditions of the federation.
Kalu Aja, a financial expert based in the United States, recently highlighted American governors’ proactive measures to attract investments.
“In the US, the Governor of Texas would travel to California to lure citizens and businesses to Texas. Governors are evaluated based on the jobs they create and the industries they attract. They market their states as prime destinations for business,” he noted.
In Nigeria, however, some governors have failed to ameliorate the sufferings of the people they govern or even create the environment for businesses to thrive and create jobs.
States such as Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Edo, Gombe, Imo, Jigawa, Nasarawa, Taraba, Yobe, and Zamfara failed to attract foreign investments in nearly three years. Between 2021 and the third quarter of 2023, these states did not attract any of the $14.85 billion from foreign investors in Nigeria.
“If there are no investments, how will there be jobs for the people? This is what is missing in states. We tend to pay more attention to the federal government, leaving the states to toy with public resources,” said Ike Ibeabuchi, an emerging markets analyst.
The disconnect between budgets, impact
Consider the SouthEast region. According to Alex Onyia, chief executive officer of Educare, states in this region have failed to achieve meaningful progress in education in 2024 despite significant budgetary allocations. Onyia painted a grim picture: “Enugu State allocated N134.5 billion to education in the last fiscal year, representing 33 percent of its budget. Yet, only one smart school was completed out of 260 proposed smart schools, with no renovations or procurement of laboratory equipment.
“Ebonyi State, which budgeted N46.1 billion for education, made no discernible impact. Imo State’s N474.4 billion allocation and Anambra’s N8.4 billion produced similarly negligible results. Abia State budgeted N18.1 billion but has little to show for it.”
Oyo State offers another sobering example. During his 2025 budget presentation, Governor Seyi Makinde acknowledged the dire state of education infrastructure, stating, “Through personal experience, I know that one of the core areas that can change the destiny of our people is access to quality education. This year, we missed an opportunity to repair at least 100 dilapidated secondary schools.” Despite this admission, the state’s capital expenditure performance in the third quarter (Q3) was a mere 39.4 percent, even though aggregate revenue performance reached 78.2 percent during the same period.
Lagos State performed marginally better, achieving 57.8 percent capital expenditure performance by the end of Q3, compared to Oyo’s 39.4 percent and Anambra’s 30.9 percent.
However, even Lagos fell short. The third quarter represents 75 percent of the fiscal year. Meanwhile, Niger State reported a dismal 26.8 percent capital expenditure performance, with education-specific spending lagging at 25.6 percent.
Read also: States lag in Nigeria’s unemployment puzzle
The Role of Education, Skills Development
According to the World Bank, “High employment and high poverty can coexist.” To mitigate this, the bank recommends wage jobs as a sustainable pathway out of poverty, which necessitates aligning skills development with labour market demands.
The data is clear: Individuals with post-secondary education are significantly more likely to secure high-skill jobs (45.7 percent) compared to those with senior secondary education (7.2 percent). This correlation highlights the critical importance of advanced education and targeted skills training in breaking the poverty cycle.
To address the problem of concurrent high poverty with high employment, there is a need to equip individuals with relevant skills regardless of their educational attainment level.
It is also critical to encourage education beyond secondary school, as higher education strongly correlates with access to high-skill, higher-paying jobs, the World Bank noted.
Empowering Women, Youths
The World Bank stresses the importance of improving women’s labour market outcomes. This involves keeping girls in school, expanding childcare options., and challenging restrictive gender norms through economic empowerment initiatives.
It equally involves helping young people access productive jobs required, supporting skills development and job matching, as well as facilitating managed migration to destinations where their skills are in demand.
The States’ performance gap
A cursory review of 2024 budget performance at Q3 reveals a troubling trend: except for Lagos, most states, including Oyo, Anambra, and Niger, have been falling short of initiatives that align with the World Bank’s recommendations.
For instance, Oyo State budgeted over N2 billion for classroom and library repairs but failed to spend any of it by Q3. Such investments are critical for equipping individuals with the skills needed for high-skilled jobs and breaking the poverty cycle.
According to a study by Stephanie Koons, a United States-based researcher, “Education often is thought to be the ‘great equalizer’ that closes the opportunity gaps between different segments of society.”
The Organization for Economic Cooperation and Development (OECD) said, “Investments in human capital can be a source of resilience over the long term and help ensure the well-being of future societies, especially in countries with large youth populations.”
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