Employment generation and expansion: a panacea for security challenge in Nigeria

Employment generation and expansion:

A panacea for security challenge in Nigeria.

Essay written and submitted by Ukwuegbu Anthony Chijioke. [email protected] or +234 818 212 0314

Department of Business Administration, University of Lagos.

BIOGRAPHY NAME: UKWUEGBU, ANTHONY CHIJIOKE

D.O.B: SEPTEMBER 13, 1992.

ADDRESS: 7, SALAKO STR., IJAOLA ESTATE,

LEMODE-IJOKO ROAD, AGBADO

STATION, OGUN STATE.

TELEPHONE: +234 818 212 0314

EMAIL: [email protected]

SCHOOL: UNIVERSITY OF LAGOS.



Abstract

Creating employment is vital on many levels. Politically, employment opportunities give the

population a stake in the peace process by providing young men and women with alternatives

to violence. Economically, employment provides income to poor families, revives domestic

demand for goods and services, and stimulates overall growth. Socially, employment

promotes social healing and improves social welfare. This essay focuses on how we can

create and expand employment opportunities in Nigeria in order to solve Nigeria’s security

challenges. This essay starts by giving an overview of the Nigerian employment landscape

since Independence, it then adapts Joachim Von Braun’s Employment generation chain to

schematically explain the economic impact of employment creation, and finally it proffers

solution on how Nigeria can create jobs for its population in order to live in a safer Nigeria.

The Nigerian Employment Landscape

Employment generation is a primary economic development goal of every industrialising

nation. More jobs generally mean more economic activities, more tax revenues for the

government, and less idle time. Job growth permits the expansion and improvement of public

goods and services, leading to an improved quality of life and enhanced prospects for future

employment growth. In addition, a vibrant job market provides an incentive for citizens to

continue their education since the rewards for such are evident in better employment

opportunities. While an expanding job market encourages workers to upgrade their skills in

order to qualify for available higher wage jobs, sustained job growth stimulates

improvements in the education and skills of the labour force, making the nation a more

attractive location for businesses in the future.

The present employment situation in Nigeria has its roots in the country’s economic

development and performance since 1960. At Independence, agriculture was the mainstay of

the Nigerian economy, accounting for 71.7% of her total employment (Nigerian Bureau of

Statistics, 1965). Because of the booming oil industry in the seventies, our dependence on

agriculture was swiftly transformed into oil dependency. Encouraged by the revenue flow

from oil, the government started to invest in large-scale capital intensive and strategic

industries like petrochemicals, refineries, iron, steel and fertilizer processing mills. The oil

boom in the 1970s and early 1980s was short-lived. Our economy began to decline following



the collapse of oil prices in the 1980s and the failure to promote the agricultural sector and

non-oil exports. After years of economic decline, falling per capita income, and debt crisis in

the mid-1980s, the government adopted the Structural Adjustment Programme (SAP) in 1986

with the standard objectives of stabilising the economy through restoration of fiscal and

monetary discipline, and liberalising of consumer and producer prices. With SAP in

operation, unemployment soared. According to the Nigeria Bureau of Statistics, Nigeria’s

unemployment rate in 2011 stands at 23.9% with GDP at $193bn in 2010. This high

unemployment rate exerts a lot of strain on the social fabrics of our society. Successive

governments have come up with different employment generation policies, but none has been

able to stem the upward climb of the unemployment rate.

Employment creation and expansion is an exercise largely carried out by government and

private entrepreneurs to initiate job or work opportunities for members of the community.

Employment generation has been one of the important objectives of development planning in

Nigeria. The argument for employment generation and expansion is closely interlinked with

the correction of social ills. The rate of urbanization in Nigeria — about 5.3% a year — is

one of the fastest in the world. Urban unemployment is estimated at about 10.8%. If

manufacturing and services sectors do not grow sufficiently to absorb the surge of labour, the

rate of urban unemployment could become unmanageable. The implication for society —

poverty, crime, conflict and the maintenance of democracy — are grave. The increased

activities of Boko Haram, Niger Delta militants, kidnappers and tribal conflicts are just a tip

of the iceberg of the dangers posed by rising unemployment.

Nigeria’s Unemployment Rates

Unemployment is the inability of people who are able and willing to work and are within the

working age (18 – 60 years) to find a job. There are different types of unemployment namely:

Structural, Cyclical, Real-Wage, Frictional, Seasonal and Residual unemployment. Structural

and Cyclical unemployment are most prevalent in Nigeria because of the skill mismatch

between the available jobs and the quality of graduates produced by our educational

institutions.



According to the Nigerian Bureau of Statistics (NBS), the aggregate unemployment rate in

2011 was 23.9%. The table below dissects the NBS unemployment data into various

components, comparing 2011 unemployment rate with that of 2009.

Items Urban (%) Rural (%) Composite (%)

Educational Group 2009 2011 2009 2011 2009 2011

Never attended 20.6 19.0 20.0 22.8 20.1 22.4

Primary 15.1 15.5 14.7 22.7 14.8 21.5

Secondary 21.4 13.9 25.3 22.5 23.8 20.1

Post-Secondary 13.9 16.8 26.4 23.8 21.3 20.2

Age Group

15 – 24 49.9 33.5 39.6 38.2 41.6 37.7

25 – 44 16.3 16.3 17.3 24.1 17.0 22.4

Source: Nigerian Bureau of Statistics (March 2012).

A closer observation of this unemployment table would show that unemployment rises

amongst people with minimal educational qualification. These are usually people with limited

economic means and living from hand to mouth. To this set of people education, which can

greatly improve their employment prospects, is a luxury. As the average member of the

society attains more educational qualification, the unemployment rate would tend to decline.

In Nigeria, Unemployment is at its highest among the youths (15 – 24 years old). This age

group is often at the end of the job queue because they lack adequate skills and experience, as

well as efficient social networks. Of all age groups, this age group is the most restive and it

doesn’t take much provocation for them to resort to violence. Worst of all are the teeming

number of graduates who leave school annually with no job to match their skills. After so

many years searching for jobs, they easily get frustrated and are most of the times the

brainchild of most of Nigeria’s insecurity challenges.

With all these statistics, the most important question is how can we create and expand the

employment opportunities in Nigeria and what impact this would have on our economy.



Consequences of Unemployment

Youth unemployment has security implications for virtually every nation, since desperation

and idleness often lead young people to fall prey to criminal gangs, political violence,

militancy, prostitution or internet scam. The Arab spring that swept the world in 2010 has the

disenchanted and frustrated youths at its fore. A research by the Police has shown that of the

armed militants in Nigeria - Boko Haram, Niger Delta militants, and Egbesu Boys, 40% of

the group composition are in the 16-17year-old age group, 10% are in the 18-19 year-old age

group, 20% in the 20-21 year-old age group and a further 20% between the ages of 20-23.

Approximately, 60% of them were unemployed.

In Nigeria, the lack of job prospects and the likelihood of a dissolute future for the youths

have contributed to socially deviant behaviour such as prostitution, armed robbery, suicide

bombings, kidnapping for ransom, political thuggery and so on. Many youths view youth

gangs as substitute families because they tend to satisfy their immediate economic and social

needs through violence. According to the World Bank, foreign investors cite Nigeria’s

insecurity challenges as a deterrent to investing in Nigeria. Accra is preferred as a West-

African Aviation hub to Lagos because of the insecurity in Nigeria. Recently, Royal Dutch

Shell has threatened to move its administrative office out of Nigeria.



The Employment Generation Chain

The Employment Generation Chain develop by Joachim Von Braun in 2006 schematically

explains the economic wide impact of employment generation and expansion programs. The

essence of employment programmes is to increase the income level in the country while

reducing social ills in the process.

Fig 1.1: Employment Generation chain.

Source: Adapted from Von Braun (2006)

These social ills — insecurity of lives and properties, increased kidnapping, bombings, theft,

political thuggery, etc — not only hamper economic development, but could also lead to

anarchy in a nation. Right from 1987 to present, the Federal Government of Nigeria through

Employment

generation programs

Assets (Infrastructure

improvement, better land

utilisation)

Technology Utilisation

(Agriculture, SME)

Short Term Income for

the Poor

Increased access to

Education, Health,

Opportunities

Increase in Household

Income.

Increased Long Term

Productivity.

Increased security of Lives

and properties.

Long Term benefits

Sho

rt Term

ben

efits



the National Directorate of Employment (NDE) has initiated various employment generation

programs like Operation Feed the Nation (1976), Youth Empowerment Scheme (2002),

National Economic and Empowerment Development Strategy (2004), and many more. But

these employment programmes have failed to achieve their aim. How then can we create jobs

for the average Nigerian? How then can we make these employment programmes work?

These questions can only be answered by developing and implementing a national

employment program that is relevant to our socio-economic milieu.

Prerequisites for successful Employment Programs

For any employment program to be effective in Nigeria, it needs to incorporate the following

elements:

1) The program should aim at providing marketable skills, i.e. skill acquisition.

2) The program should be able to provide start-up capital (either in form of cash or

equipment).

3) The program should encourage ‘public works programmes’, i.e. labour intensive

jobs.

1) Provision of Marketable skills: This involves the training and retraining of youths

and the unemployed in the acquisition of vocational or entrepreneurial skills. A proper

research needs to be carried out to determine the demography of people that will be

more receptive to a particular skill; those who possessing the skill will give them a

comparative advantage, and who would use that skill to create more employment.

These vocational skills acquisition should be all embracing — the youths, rural

dwellers and women; and should be flexible to accommodate societal changes and the

dynamic demands of the labour market. In the past, the various levels of government

especially the federal government focused mostly on technical skills churning out

programs like the National Open Apprenticeship Scheme, Waste-to-Wealth and

Resettlement Scheme. While these programs are good for the secondary school

leavers, they don’t appeal to the bourgeoning class of graduates in Nigeria. While as

undergraduates, these youths need to be sensitised on the culture of entrepreneurship

— its challenges and opportunities, internship and SIWES (Student Industrial Work

Experience Scheme) programs should be promoted among undergraduates. This is



because it allows youths to gather practical skills while keeping them busy. Through

SIWES and Internship opportunities, youths gain industry knowledge and market

experience. Some of them can use this knowledge to set up their own firms.

2) Provision of start-up capital: The lack of capital is a major constraint on youths in

starting and expanding their business. Capital could either be in the form of cheaper

access to loans, formation of cooperatives, leasing, or grants. Once capital has been

provided to businesses, it is very important that this capital is monitored to ensure its

judicious use in the business and creation of further employment. The YouWin

initiative by the Jonathan administration is a welcoming development, it aims to

provide credit in the range of one million naira to ten million naira in the hands of

1,500 Nigerian businesses.

3) Labour Intensive: All economic activities in the country should be encouraged to use

more of labour than capital. Labour intensive policies create more jobs for the people.

Traffic controlling is a good example of how the government creates employment by

emphasizing on labour intensity. It would be economically cheaper employing traffic

lights, but at a greater cost of growing unemployment and increased public insecurity.

Employment generation Programs and Strategies

1) Agriculturalisation: Agricultural programs like Operation Feed the Nation, Green

Revolution, etc. should be promoted nationwide. The government in collaboration

with the private sectors should reduce the cost of farm implements, increase access to

agricultural loans, provide agricultural extension services, etc. This would encourage

more people to take-up farming and in the process create more jobs in the country.

Also, Corps members should be posted to large agricultural farms and institutions

where for a full year they would be immersed in agricultural activities and after their

NYSC, take off grants like land and capital should be provided to them to encourage

them to take-up farming. If just 5% of 20,000 yearly Corps members become large

scale farmers, Nigeria would not only solve its unemployment issues but become a

net-exporter of agricultural products.

2) Information Computer and Technology (ICT): The Youths are the biggest

proportion of the unemployed in Nigeria, (37.7% of those aged 15-24 are

unemployed) and possess IT skills and thirst for innovation. They should be



encouraged to seek self-employment in the ICT sector. IT businesses are relatively

easier to kick-start as they require lesser capital. The cost of Internet should be

significantly made cheaper, broadband penetration increased and ICT foundations like

the Jim Ovia’ ICT Foundation should be allowed to thrive. Once these IT skills are

allowed to bud, the youths will become creative and think of ways of making a living

from IT. Google, Facebook and HP all with their Headquarters in Silicon Valley are

typical examples of how the proliferation of IT skills generated employment for

millions of Americans

3) Small and Medium Enterprises (SMEs): SMEs are regarded as the engine of

economic growth and tools for promoting equitable development. The major

advantage of the sector is its employment potential at low capital cost. The labour

intensity of the SME sector is much higher than those of larger enterprises. The

provision of reliable power supply, improved road networks and access to improved

infrastructural facilities would make SMEs blossom in Nigeria. As SMEs blossom,

the demand for labour increases, thus, leading to the creation and expansion of

employment.

4) Public projects: Public works projects are effective ways of generating employment

quickly while creating infrastructures that will benefit the society. Construction of

massive infrastructural facilities like dams, bridges, roads and hospitals would create

direct and indirect demand for labour and thus create jobs for the citizens in the

country.

5) Manufacturing: Promotion of industrial expansion strategies is part of the strategies

of creating massive employment in Nigeria. As manufacturing industries expand and

increase their output, they would create a huge demand for labour which will in turn

lead to higher employment rates in Nigeria. But these manufacturers would only

expand their outputs when basic infrastructures like roads, power supply and water

that would significantly reduce their cost of doing business is available.

Employment Generation Lessons: Case Study

Indonesia and Nigeria are classic tales of two countries similar in virtually every aspect. Both

countries are multi-ethnic and blessed with abundant human resources. Indonesia has a

population of 248million (2012 CIA World Fact Book). Even with the fourth largest



population in the world, Indonesia has an unemployment rate of 6.7% (CIA World Fact

Book, 2012) while Nigeria with its 160million population has an unemployment rate of

23.9%. The reason for employment growth in Indonesia is that she did not finance industrial

growth by squeezing agriculture. Rather, she made heavy investment in agriculture, by

improving rural infrastructures, upgrading irrigation system, and augmenting human capital

in rural areas through widespread provision of health and educational services. Also in 1986,

Indonesia succeeded in massive creation of employment by promoting a labour intensive

agricultural revolution. This was later followed by a simultaneous heavy investment in all

sectors of the economy. This strategy paid off as it created a massive demand for labour and

led to a significant drop in sectarian violence. This consistent approach allows Indonesia to

enjoy one of the lowest unemployment rates of any populous nation.

Policy Recommendation

While the three prerequisites are crucial, the employment generation policy has to implement

policies that will minimise bureaucracy, strengthen key institutions (tax and customs

administration), improve transparency of public institutions and strengthen the legislative and

judicial branches of government. More importantly, the government has to make basic

infrastructures like good roads, reliable power supply, and constant pipe borne water, etc.

available in the nation. These infrastructures would attract Nigerians to create more

employment as their cost of doing business would fall.

Conclusion

Employment generation and expansion programs require strategic plan of actions and policies

that cannot be left to chance. In Nigeria today, a major concern of all stakeholders is how we

can generate enough employment sufficient to starve off the security challenges we are faced

with. Any employment creation initiative should have youths and women at its centre,

because this demography is prone to engaging in violent misconduct and other social vices

that undermine the security of lives and properties in Nigeria. While experience has shown us

that government can improve the lives of its citizens, lots of effort is required from the



private sector to collaborate to create more jobs reduce unemployment as this would go a

long way in making Nigeria a safer place.

References

Ademola, A. (2001). Employment generation strategies for small towns. Lagos : UI Press.

Aremu, M. A., & and Adeyemi, S. L. (2011). Small and Medium Enterprises as a survival

strategy for Employment generation in Nigeria. Journal of Sustainable Development ,

203-213.

Braun, J. V. (2006). Employment for Poverty reduction and food security: Concept, Research

issues and Overview. Washington DC: IFPRI Book.

National Bureau of Statistics. (2009). National Manpower stock and Employment generation

survey. Abuja: Nigerian Press.

National Bureau of Statistics. (2012). 2011 Social Statistics in Nigeria. Abuja: National

Press.

Ojo, P. (1998). Meeting the challenges of rising Unemployment and Underemployment .

Lagos: Pumarks Publishing.

Salami, C.G. (2011). Entrepreneurship and Youth Unemployment in Nigeria: The Missing

Link . Global Journal of Management and Business Research, 3-5.

Torress, F. T., & Yacila, H. C. (2006). New options for generating Employment and Income

in the Rural Sector. Journal of the Inter-American Institute for Cooperation on

Agriculture, 35-51.

United Nations Development Programme. (2009). United Nations Policy for Post-conflict

employment creation, Income generation and Reintegration. Geneva: HarperCollins.

Documents

Employment generation and expansion: a panacea for security challenge in Nigeria