The Minister of Labour and Employment, Dr. Chris Ngige, recently deplored the rising unemployment in the country, especially youth unemployment. Ngige’s alarm came in the midst of the recent staggering statistics that put the nation’s unemployment rate at 50 per cent and youth unemployment at over 42 per cent. The youths reportedly make up 60 per cent of the total population estimated at over 200 million people. According to the minister, the high rate of unemployment portends great danger for the country.
Ngige, who spoke at an inaugural partnership economy summit organised by the Ministry of Special Duties and Intergovernmental Affairs, in Abuja, tagged:”Translating Sustainable Development Goals to Local Businesses in Nigeria,” stressed that addressing unemployment would be the beginning of fixing Nigeria’s multiple challenges. The minister’s observation is a reflection of the unemployment situation in the country. Therefore, he cannot be faulted.
The rising unemployment is a time bomb that will explode any time soon with dire consequences. The country, according to the minister, “is in trouble. We are facing a problem that is a vicious cycle.” Available statistics show that 50 per cent unemployment rate in the country is the highest in 20 years. According to the World Economic Forum (WEF), this is the first time in years that Nigeria would reach that frightening 50 per cent unemployment threshold. Without doubt, unemployment was one of the drivers of the EndSARS protests of last year. Currently, it is equally fueling the general insecurity in some parts of the country.
The best way to reduce unemployment is for the government to create more jobs or provide the enabling environment that will encourage massive job creation. Though the Federal Government has assured owners of Micro, Small and Medium Enterprises (MSMEs) of adequate loans and conducive environment for their businesses, only very few have received such support. The business climate is still suffocating for many start-ups to survive. The Federal Government should do more in addressing the rising unemployment.
When the present administration came to power in 2015, unemployment rate was at 8.2 per cent. According to the National Bureau of Statistics (NBS), it grew progressively worse: 13 per cent in the Q3, 2016, 18.88 per cent in 2017, 23.3 per cent in 2018, 27 per cent in Q2, 2020 and 33.5 per cent in Q4, 2020. Within this period, Nigeria did not do well in the human capital development index, the worst in 2016 when the country was 127th position out of 130 countries ranked in the World Economic Forum. This is bad news for Africa’s largest economy by Gross Domestic Product (GDP). At present, the domestic labour market remains fragile. The spending power of many Nigerians has weakened as a result of the COVID-19 pandemic and disruption of economic activities. Moreover, the inflow of Foreign Direct Investment (FDI) in the country has dropped significantly, as confidence in the economy continues to wane. The situation may likely deteriorate further until there is meaningful intervention by the government.
In all, dealing with the present high rate of unemployment requires massive job creation initiatives at multi-sectoral levels. What the country needs now is comprehensive policies that will boost employment opportunities and strengthen the purchasing power of consumers. Nigerians are getting poorer every day. Some programmes already put in place to boost employment must be retooled to ensure that they meet the exigencies of the present time.
Industries should be supported to reduce the production cost of manufactured products. Since the MSMEs remain the backbone of the economy, government must give them the necessary boost to thrive. They should be given loans at very low interest rates. The present ad hoc approach to creating jobs has failed. For youth unemployment, we believe that young people in the country can turn things around if they have better education, training and investment in entrepreneurship.
Since bad leadership, economic slowdown, poor industrilisation and foreign exchange scarcity have contributed to the rising unemployment, government at all levels must address them. Without addressing them, the country may witness anarchy. The minister may have predicted the likely consequences of rising unemployment. Government should not overlook them.