The primary purpose of any economy is to maximize employment (full employment) while minimizing price swings (i.e., inflation). The availability of work possibilities to the teeming population (especially youth) and the efficacy of the stabilization system can help achieve the macroeconomic goals in emerging countries, particularly in Sub-Saharan Africa, including Nigeria, where high inflation coexists with rising unemployment rates.
Available data show that there has never been a point in Nigeria’s turbulent history when unemployment has been as high as it is currently. The unemployment rate now stands at 33.3 percent, and surprisingly, graduates and postgraduates, for example, account for around 2.9 million of Nigeria’s overall unemployment population.
Unemployment, however, can be categorized into three, namely, frictional, structural, and seasonal unemployment. When someone is unemployed for a brief period while seeking work, this is known as frictional unemployment. Structural unemployment is a mismatch between employees’ abilities or location and job requirements. Seasonal unemployment is caused by seasonal oscillations in a population’s activity, such as tourism or agriculture.
According to Keynesian employment theory, the level of employment is determined by effective demand in the short run. The term “effective demand” refers to a demand for goods and services backed up by the ability and willingness to pay for them. A considerable increase in aggregate demand, according to Keynes, would affect employment and vice versa. Unemployment would result from a decrease in total effective demand.
Keynesian unemployment, according to theory, is the departure of unemployment from its natural rate. The natural unemployment rate is the rate of unemployment that prevails when the labor market is at its most balanced. Keynesian unemployment is generated by economic downturns that are part of the business cycle, which are the economy’s natural swings. It frequently occurs due to structural and frictional joblessness.
The government of Nigeria has put in place several policies to generate employment. The policies and reforms can be traced back from the First National Development plan of 1962 to the current five-year National Development Plan of 2021-2025. Thus, there has always been some intervention program aiming at lowering unemployment. For example, establishing the National Directorate of Employment and different skills acquisition programs like NAPEP, SURE-P, YOUWIN, and N-POWER, are some of the few government-sponsored interventions aimed at assuring economic growth and job creation chances.
Nigerian unemployment has been with us to a greater extent since independence has become a monster.
One of the critical issues affecting the Nigerian government today is youth unemployment (42.5 percent) which has social, economic, and political implications on the economic growth and development of the country. The unemployed young Nigerians feel cut off from society and have little faith in the political system. As a result of this situation, some teenagers participate in various nefarious activities that impede the state’s economic development.
According to statistics, unemployment in Nigeria is contributing to increased poverty, oil production disruption due to pipeline vandalism, and the emergence of lethal groups such as Boko haram, Niger Delta armed groups, armed robbers, and kidnappers.
The multiplier effect of the social and economic impact of youth unemployment in Nigeria thus has far-reaching implications for our nation’s unity.
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On a social impact level, unemployment can lead to family strife and disintegration due to parents’ failure to support the needs of their children. Due to individual demands and family pressures, it raises the crime rate and criminal actions. It leads to boredom, resulting in unpleasant thoughts and suicide attempts. It also causes a sense of disconnection from society and social functions. It leads to health problems that are linked to stigma.
On the economic effects, unemployment increases poverty incidences in the country. It reduces the national output of goods and services, rural-urban migration increases, increases debt rates, leads to wastage of resources, and promotes social unrest.
There are crucial areas of the economy that require the government’s immediate attention to tame the ticking time bomb that is Nigerian unemployment. In effect, unemployment in Nigeria should be addressed by a multi-sectoral approach that addresses the deficiencies. The power sector, the industrial sector, and the agricultural sector are the three sectors in question. When these sectors are appropriately developed and utilized to their full potential in Nigeria, they will provide the essential atmosphere for businesses to grow and thousands of jobs for our teeming unemployed.
Busayo Aderounmu is an economics lecturer at Covenant University, Ota, Ogun State.
