By Omodele Adigun
Between 2009 and 2011, due to the harsh operating business environment in the country, over 800 companies were shut down, according to the Natonal Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA).
This has thrown millions of Nigerians out of jobs and compounded the ever-bloated labour market. The unemployed figures from the National Bureau of Statistics (NBS) was indeed, very frightening.
For instance, out of a labour force population of about 81 million, 11.5 million people are currently unemployed and 17 million people are said to be under-employed. The total employment is around 52.6 million, while the working age population grows by 3.7 per cent every year. What is the way out of this? Experts believe that the development finance institutions, the central bank and banks should come and lend a helping hand.
For the Lagos State Governor, Mr. Akinwumi Ambode, just last weekend said: “To make a meaningful dent on unemployment and underemployment, and to reduce poverty, which is at over 60 per cent, we need to be creating at least four million jobs per year.
“Where do banks fit into all of this? Well, the reality is, if we do not have a well-functioning banking sector, all of this is not possible. Both investment and day-to-day commerce requires the intermediation of banks. And while someone outside of the formal financial sector can in some cases make a living, the reality is that incomes of the bottom of the pyramid are increased when we have better financial inclusion.”
To echoe this, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, recently declared: “If tomorrow we find investors that want to come back and reestablish the shut tumbler factory in Agbara, Ogun State, count on us, we will support you. If we find a company that says it wants to come back and make fluorescent tube or electricity bulbs in this country, we will support you. There is no how we can create jobs for our people without the support of the private sector. The Federal Government or the CBN can not do it alone. The support of the private sector is needed and very germane. How do we create prosperity for our people and nation? How do we make this country great again? There is no way this can be done without the support of the private sector.”
Using Unilever Plc as an instance, Emefiele said the company is an example of the manufacturing companies that “hearken to our call; that hearken to our cry.”
Going down memory lane, he explained how CBN helped to resuscitate its margarine plant. His words: “I always recall with nostalgia as a young credit officer in 1994. I came to this factory in Agbara. At the gate, we used to see a company producing tumblers and glasses. Somewhere around, we used to see Heleon Industry producing flourescent tubes and electricity bulbs.
“Unilever was not even producing Blue Band magarine there. But unfortunately, the story has changed. A couple of challenges surfaced. They either talked of challenges of finding fuel; LPFO, and other things. Unfortunately, as a result of these challenges, Unilever packed; the tumbler and glass manufacturing company, Tower Glass, is gone.
“Today, Heleon Industry, making flourescent tubes is history. And what does that mean? It means that Tower Glass that was producing tumblers and glass shut down and Nigerians began to import glasses. What do we make glass from? Just sand silicate and soda ash. That is all! Sand or silicate, we have in abundace. So we closed these factories and people lost jobs. Can you imagine those selling silicate and their families? They lost their jobs because the company buying the silicate has closed. We lost jobs to other countries. The same for Unilever. As a result of these challenges, Unilever shut this factory and went to another country. We lost these jobs and gave the jobs to other countries.
“But as a result of adversity, Yaw (Nsarkoh, Vice President, Unilever West Africa, who is in charge of Ghana and Nigeria) and his team came to my office to seek forex allocation or waivers. I asked him what he produced margarine with; oil and water. That is what gives you Blue Band margarine. And he explained that that business was shut down because of forex. I told him to relocate that company back to Nigeria because the country is the market. Demography and everything you talk about favour Nigeria. And that he needed to get that plant back so as to create jobs here and people can consume margarine here. He said ok, that it would take 18 months. For me, I am happy that he has kept his promise.”
Ambode advised banks to take a cue from M-Pesa in Kenya, which was credited with the feat of taking about two per cent Kenyan households out of extreme poverty.
“You all are familiar with the story of M-Pesa in Kenya. But there are a few facts: M-Pesa celebrated its 10th anniversary in March 2017. Before its launch, the average distance to a bank in Kenya was 9.2km. Today, the distance to an M-Pesa agent is less than 1.4km. The service, which has accumulated over 18 million users in Kenya alone has directly engaged close to 300,000 agents nationwide and is said to be responsible for lifting two per cent of Kenyan households out of extreme poverty. Essentially, this type of low-cost access to banking services has made a major contribution to Kenyan economic development, and created a very large number of jobs, particularly in micro-enterprises. Here in Nigeria, mobile money has been slow to take off.
“Mobile money usage in particular has remained low, increasing from 0.7 million adults in 2014 to 0.9 million in 2016. This shows that the uptake is still very low when compared to the number of adults, about 58.2 million, who were mobile phone owners in 2016. One reason for this is that there are too many competing systems and regulations. While we generally don’t like monopolies, the reality is that the system is much more valuable if everyone uses it and that is what M-Pesa has managed to achieve elsewhere on the continent. So while our banks are very focused on how the digital revolution is affecting financial services, I want to challenge them to go faster.”