In 2003, economist Tairu Bello presented a comprehensive analysis of unemployment in Nigeria at the “Economics for the Future” conference in Cambridge. Two decades later, his insights remain strikingly relevant, highlighting both progress made and persistent challenges in Africa’s largest economy. This article examines Bello’s key findings and how they apply to Nigeria’s current unemployment landscape.
The Nature of Unemployment: Then and Now
Bello identified several characteristics of Nigerian unemployment in 2003:
Disguised unemployment
Underemployment
Long-term unemployment
Youth unemployment
Today, these issues continue to plague Nigeria’s labor market, but with some notable changes.
Disguised Unemployment and Underemployment
In 2003, Bello noted that official unemployment statistics significantly understated the true extent of joblessness due to disguised unemployment and underemployment. People engaged in low-productivity work or working fewer hours than desired were not captured in official figures.
Fast forward to 2023, and this problem persists.
The National Bureau of Statistics (NBS) now differentiates between unemployment and underemployment, providing a more nuanced picture. As of Q4 2020 (the latest available data), the combined unemployment and underemployment rate stood at a staggering 56.1%.
Long-term Unemployment
Bello highlighted the growing issue of long-term unemployment, where job seekers remained in the labor market for years without finding work. This trend has worsened over the past two decades. The African Development Bank reports that the average duration of unemployment for Nigerian youth now exceeds three years, leading to skill degradation and reduced employability.
Youth Unemployment
In 2003, Bello identified youth unemployment as a critical issue, particularly among those aged 20-44. Today, this problem has intensified. The NBS reports that as of Q4 2020, youth unemployment (ages 15-34) stood at 42.5%, compared to the national average of 33.3%.
Causes of Unemployment: Persistent Challenges
Bello identified several factors contributing to Nigeria’s unemployment crisis. Many of these remain relevant today:
Poor economic growth
Neglect of the agricultural sector
Inadequate educational system
Poor enabling environment for businesses
Economic Growth vs. Population Growth
In 2003, Bello noted that Nigeria’s GDP growth (averaging 2.8% from 1991-2000) was barely keeping pace with population growth (2.57%). Today, this mismatch persists. Between 2015 and 2020, Nigeria’s GDP growth averaged just 1.1%, while population growth remained around 2.6%.
Agricultural Sector Neglect
Bello highlighted the shift away from agriculture towards the oil sector as a key driver of unemployment. While efforts have been made to diversify the economy, agriculture’s contribution to GDP has only marginally increased from 26.8% in 2003 to 30.77% in 2022. The sector still struggles with low productivity and limited value addition.
Educational System Misalignment
The paper criticized Nigeria’s educational system for producing graduates lacking practical skills. Two decades later, this remains a significant issue. A 2022 World Bank report notes that 80% of Nigerian university graduates lack the skills required by employers.
Poor Business Environment
Bello emphasized the need for an enabling environment to stimulate private sector growth and job creation. While Nigeria has made some progress, rising 39 places in the World Bank’s Ease of Doing Business rankings between 2016 and 2020, significant challenges persist. Inadequate infrastructure, policy inconsistency, and security concerns continue to hinder business growth and job creation.
Policy Measures: Mixed Results
Bello’s paper evaluated several government initiatives aimed at reducing unemployment. Let’s examine how these and subsequent programs have fared:
National Directorate of Employment (NDE)
Established in 1986, the NDE was praised by Bello for its youth training programs. While the NDE continues to operate, its impact has been limited by inadequate funding and poor coordination with other agencies. A 2021 review by the Nigerian Senate found that the NDE’s effectiveness has declined significantly over the years.
Educational Reforms
Bello called for restructuring the educational system to prioritize vocational skills. While Nigeria has made some progress, such as the establishment of more technical colleges and the introduction of entrepreneurship courses in universities, implementation remains inconsistent. The mismatch between graduate skills and labor market needs persists.
Poverty Alleviation Programs
The paper mentioned programs like the Better Life Program and Family Economic Advancement Program (FEAP). These have since been replaced by initiatives such as the National Social Investment Program (NSIP), which includes N-Power (a youth employment scheme) and the Government Enterprise and Empowerment Programme (GEEP). While these programs have reached millions of Nigerians, their impact on overall unemployment rates has been limited.
New Developments and Emerging Challenges
Since Bello’s 2003 analysis, several new factors have emerged that impact Nigeria’s unemployment landscape:
Digital Economy and Gig Work
The rise of the digital economy has created new employment opportunities, particularly in the informal sector. Platforms like Uber, Bolt, and Jumia have enabled many Nigerians to engage in gig work. However, these jobs often lack stability and benefits, highlighting the need for policies that balance flexibility with worker protection.
Climate Change and Green Jobs
Climate change poses new challenges to traditional sectors like agriculture but also presents opportunities for green jobs. Nigeria’s commitment to net-zero emissions by 2060 could drive investment in renewable energy and create new employment avenues.
COVID-19 Pandemic Impact
The pandemic exacerbated Nigeria’s unemployment crisis, with the rate jumping from 27.1% in Q2 2020 to 33.3% in Q4 2020. Recovery has been slow, emphasizing the need for resilient job creation strategies.
The Way Forward: Insights for 2023 and Beyond
Drawing on Bello’s recommendations and considering current realities, several strategies emerge for tackling Nigeria’s unemployment crisis:
Diversification and Structural Transformation:
Accelerate efforts to diversify the economy beyond oil, focusing on labor-intensive sectors like manufacturing, agriculture, and services.
Skills Development and Education Reform: Align the education system more closely with industry needs, emphasizing technical and vocational education. Introduce coding and digital skills at earlier educational stages.
Enabling Business Environment: Continue improvements in ease of doing business, focusing on infrastructure development, access to finance, and policy consistency to stimulate private sector job creation.
Agricultural Modernization: Invest in agricultural technology and value chain development to increase productivity and create more attractive jobs in the sector.
Leveraging the Digital Economy: Develop policies to support the growth of the digital economy while ensuring fair labor practices in the gig economy.
Green Growth Strategy: Develop a comprehensive strategy to capitalize on green job opportunities arising from climate change mitigation and adaptation efforts.
Regional Development: Address regional disparities in unemployment by promoting balanced development across all geopolitical zones.
Data-Driven Policymaking: Improve labor market information systems to enable more targeted and effective employment policies.
Conclusion
Twenty years after Tairu Bello’s analysis, Nigeria’s unemployment crisis remains a critical challenge. While some progress has been made, particularly in diversifying the economy and improving the business environment, many of the fundamental issues identified in 2003 persist.
The way forward requires a multi-faceted approach that addresses both the supply and demand sides of the labor market. By learning from past experiences, adapting to new realities, and implementing bold, innovative strategies, Nigeria can work towards creating a more inclusive and dynamic job market for its growing population.
As Africa’s largest economy and most populous nation, Nigeria’s success in tackling unemployment will have significant implications not just for its own citizens, but for the entire continent.
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