Nigeria: ‘What is most important is we put millions of young people in jobs, and quickly’

Akintunde Oyebode
By Akintunde Oyebode

Senior Special Adviser on Investment, Trade and Innovation to the Governor of Ekiti State in Nigeria.

Posted on Wednesday, 5 August 2020 14:46

Youth cheer as they ride on the back of a truck returning from a rally near the offices of the Independent National Electoral Commission in Kano, northern Nigeria Thursday, Feb. 14, 2019. (AP Photo/Ben Curtis)

The Nigerian government recently launched the Special Public Works Programme (SPW) aimed at creating more jobs in the country to address the economic downturn from the coronavirus pandemic.

Yet this response begs the questions: How can we ensure that these jobs are accessible to the youth and that recovery extends to small and medium enterprises (SMEs) in Nigeria? And how best do we nurture an economic recovery that quickly produces productive jobs?

The economic impact of the pandemic will be especially harsh on the young population and micro and small businesses.  60%  of Nigeria’s population  is under the age of 25, yet, 16 million Nigerian children were out of school in 2019, up from the last count of 13.2 million in 2018.

READ MORE How will Nigeria navigate the pandemic?

The growing number of uneducated youths is a significant burden on the economy as this demographic is likely to struggle amidst an economic downturn. To worsen the situation, most of the approximately 40 million SMEs in the country, where young people find employment, have also been badly hit by the pandemic and necessary restrictions to business activity.

To summarise, Nigeria is in a precarious position. Already facing a youth unemployment crisis, the effects of COVID-19 are an unwanted addition to an already dire situation.

Pre-COVID: 8.1 million and a sobering report

According to the National Bureau of Statistics (NBS), Nigeria had approximately five million unemployed youth in the third quarter of 2015. Three years later, Nigeria had 13.1 million unemployed youth, and they accounted for 29.7% of the youth labour force. Nigeria has seen 8.1 million youth become unemployed between the third quarter of 2015 (Q3’15) and the third quarter of 2018 (Q3’18).

Deng Xiaoping’s is famous for saying: It doesn’t matter if a cat is black or white; as long as it catches mice, it’s a good cat.

However, if anything helps to cushion this problem, it is the breakdown of unemployed youths. Of the 13.1 million unemployed youth in Q3’18, six million worked between 1-19 hours per week but given the hours worked are under the minimum threshold of 20 hours, they are still classified as unemployed.

READ MORE ‘Entrepreneurship can come out of necessity or innovation’ – Kolawole Olajide

That means this group not only explains the missing jobs in agriculture, but also highlights challenges with our spending decisions.

If we are going to make a bet on agriculture, it has to be all season, wage-paying jobs, and supported by significant productivity uplifts in primary production. Another 11.4 million (25.7% of the youth labour force) are underemployed (working between 20 – 39 hours per week). If we provide better skills to these young people, we can move them from underemployed to full employment.

However, the big problem remains unsolved: How do we support the 7.1 million of the 13.1 million unemployed youth who have never worked? The first job is probably the toughest to get, and 7.1 million suggests a large inexperienced pool of potential active labour.

Capturing the Nation amidst the Pandemic

Already being young in Nigeria is very challenging, and the opportunities for jobs are hardly available. With the COVID-19 outbreak, we can expect an exponential increase in the nation’s already staggering youth unemployment data.

Take Olumide Ajayi, who realised two months after the first lockdown that he could not log into his work accounts, and later received an email that he had been fired. Only one reason was given: COVID-19.

All over Nigeria, there are thousands, if not millions, of stories like Olumide.

According to the Economic Sustainability Committee (ESC) report, the current economic crisis risks pushing an additional 39.4 million Nigerians into unemployment by December 2020. These statistics do not only include youth, but as 15-34 year-olds account for close to half of the nation’s working-age population and a vast majority of small business, young people will feel the greatest brunt of this economic shock.

As job losses rise and consumption decreases, the struggle will affect small businesses, who already struggle with limited access to capital, knowhow and markets. When combined with a long running inability to create an enabling business environment, the picture for small businesses is dire.

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Yet, with Government revenues declining, we are seeing a worrying trend of local government officials enforcing arbitrary and often illegal taxes, further worsening the ability of SMEs to remain in business.

With all of this doom and gloom, the critical question remains: how will the Nigerian economy recover and put millions of young people to work?

Rethinking Policy Decisions

Deng Xiaoping’s is famous for saying: “It doesn’t matter if a cat is black or white; as long as it catches mice, it’s a good cat.”

The reason Deng’s China lifted 800 million people out of poverty was an ideological fluidity that identified the best way to solve China’s poverty crises, regardless of how capitalist or socialist the policy. More than ever, Nigerian Governments at all levels need to rein in their direct intervention in the economy, and return to a primary role of being an enabler.

This will require clarity around the exchange rate policy to attract foreign capital; a clearer interpretation of fiscal reforms to drive trade; and an opportunity to privatize state-owned assets in aviation, railways, and possibly postal services.

At the end of the day, we will have to cross the river by feeling for stones, but what is most important is that we put millions of young people in jobs, and quickly too.

We must recognize that the government is simply unable to mobilise the capital required to invest in critical enablers, and Nigeria does not have a choice but to look for the private capital and knowhow required to drive critical sectors: such as power, transport, housing and agriculture.

In the aftermath of COVID-19, there is a need to provide an opportunity for Nigeria to benefit from the inevitable decentralization of supply chains, and rise in remote jobs. We must start identifying centres of excellence while providing our young people with the opportunity to get the required skills for today’s jobs. It will not be easy, but it is an absolute necessity if we are to put millions of young people in jobs.

READ MORE Nigeria: Pandemic to poverty in the post-COVID future

With limited capacity for a stimulus programme, various government institutions need to collaborate and harmonize their programmes for maximum impact.

The Central Bank of Nigeria (CBN), Development Bank of Nigeria (DBN) and Bank of Industry (BOI) are three examples of Government institutions deploying capital to cushion the impact of COVID-19 on the economy. With better collaboration, the limited capital can deliver a significantly better impact. For example, the CBN has spent over N170bn on the anchor borrowers programme in the last four years, yet our research institutions only spend 10% of the N30bn annual allocation on actual research.

READ MORE CBN’s Emefiele: ‘The Nigerian situation is a challenging one’ says analyst

It is a fair argument to say if the CBN focused its spend on financing agriculture research, we would have the productivity boost to make agriculture more attractive for DBN, BOI and commercial lenders to write bigger cheques.

Bottom line

Ultimately, government policies must be done with the end in mind. We must keep asking: What does a ban on maize, for example, do to prices? Does it impoverish the consumer, and cause even worse poverty? If the answer is yes, what benefits does one provide to offset the downside effects?

These are the dispassionate questions that must guide policy formulation. Youth unemployment in a COVID-19 world will require the government and key players across the development sector to innovate and question current and future initiatives.

At the end of the day, we will have to cross the river by feeling for stones, but what is most important is that we put millions of young people in jobs, and quickly too.

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