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UNIVERSITY OF BOTSWANA
FACULTY OF SOCIAL SCIENCES
DEPARTMENT OF POLITICAL AND ADMINISTRATIVE STUDIES
MPA-604 ECONOMICS FOR DEVELOPMENT MANAGEMENT
STUDENT NAME: SOLOMON SAMUEL ADETOKUNBO
STUDENT NUMBER: 201502535
EMAIL: Samuelisolomon@gmail.com
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LECTURE: PROFFESOR E. BOTHALE
TERM-PAPER TITLE
UNEMPLOYEMENT: A STUDY OF NIGERIA
YOUTH UNEMPLOYMENT: A STUDY OF NIGERIA
INTRODUCTION
Unemployment continues to be a global issue even as the world population continues to increase.
Some countries have effectively put in place policies that mitigate this growing issue while
others have failed to plan and continue to suffer the consequences of their actions and inactions
on a daily basis.
According to International Labour Organization (ILO) report, (World Employment and Social
Outlook Trends, 2015), there are 201 million people currently unemployed globally and by the
year 2019 more than 212 million people of the worlds population will be out of work.;
fortunately Countries like Singapore, Qatar, Thailand etc. were able to make long-term policies
that have helped stabilize their unemployment rate.
Reports from the 1952 census held in Nigeria indicate that the Country witnessed stable
employment during that period, four decades after reverse was the case. This threw the Country
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in disarray and led to build up of unlawful practices in Nigeria. (Ojo, 1997, p.14).
According to the Central Bank of Nigeria (1992) in 1990 unemployment rate in Nigeria stood at
3.2%, by 1995 it improved and reduced to at 1.8%. By 2003 it rose to 2.3%, ever since then it
has kept on increasing with no practical solutions from the government to help in curbing the
factors responsible for the increase. (Uniamikogbo, 1997, p.42).
This term paper therefore, seeks to explore the issue of unemployment in Nigeria, causes and
implication on the economy; Attempts was also made at recommending solutions to help tackle
the scourge of unemployment in Nigeria to the barest minimum
CONCEPT OF UNEMPLOYMENT
Unemployment in general refers to the condition of people who are without jobs but fall within
the workable age. The ILO defines the “unemployed,” as numbers of the economically active
population who are without work but available for and seeking work, including people who have
lost their jobs and those who have voluntarily left work. (National Bureau of Statistics, 2010).
According to (Adebayo, 1999; Bakare 2011), unemployment exists when the members of a
Country’s labor force wish to work but there are no jobs anywhere. It is the governments
responsibility to strive and ensure it provides good jobs and permeate favorable enabling
environment that will encourage young people to be employers of labour (entrepreneurs) so they
can create jobs rather than waiting for white collar jobs.
For the purpose of this term paper, unemployment will be described as when group of men and
women who fall within the working class age grade have the basic skills and are willing to work
but cannot find any job most especially the ones they desire for; or jobs that are in line with their
area of expertise and skills.
When the supply of labour is more than the demand for labour, it ultimately leads to joblessness
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and creates unemployment (Onah & Bakare 2011). Due to the lack of sufficient employment
opportunities readily available in the formal sector, young people are left with no better option
than to engage in casual work, thus leading to underemployment
LITERATURE REVIEW
CATEGORIES OF UNEMPLOYMENT
Various researchers have categorized unemployment into different forms; often times the forms
depend on the socio-economic climate of the research in focus.
Congress of the United States (2012) categorized unemployment into two forms: those that have
lost their jobs as a result of workers being laid off and those newly entering the labour force after
completing school with no job.
In the same vein Oyebade (2003, p.11), grouped unemployment into two categories, the older
unemployed who lost their jobs through redundancy or bankruptcy and the younger unemployed,
most of who have never been unemployed.
To term “underemployed”, simply refers to all the people who are not fully involved and in any
productive activity.
CAUSES OF UNEMPLOYMENT
Diejomah & Orimalade (1 s971, p.51) opined that reduction in the demand for labour, which has
resulted in the increase of unemployed labour force, has led to the high rate of unemployment
problems in Nigeria and will continue if measures are not put in place to correct this. The duo are
also of the opinion that another factor responsible for the increase in the unemployed labor force
is the growing increase of the labour force in urban areas which is caused by the push-pull factor
that arises from the rural-urban migration.
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Edwards (1979) elucidates more on the rural-urban movement by using the push - pull factors to
explain the causes of unemployment. According to him, the push factor arises as a result of the
pressure coming from the man-land ratio that exists in the rural areas. Todaro (1987, p.12)
blames the rural-urban migration that is generated by the push-pull factor to the distastefulness
and repulsiveness of life in the rural areas caused by in-accessibility to infrastructure and basic
amenities
Todaro (1987, p.36) attributes rural-urban migration to the relative unattractiveness of rural life
due to lack of basic amenities. This push-pull factor brings about a constantly widening rural-
urban income gap in favour of urban dwellers and a presumed higher probability of securing
wage employment in the cities.
Unemployment in Nigeria is soaring high due to government’s decision to administer the
economy with policies that are extraneous and not fit to meet the yearning of the public. Some of
these policies are usually forced or shoved down the throat of countries who are beneficiaries if
foreign donors as a result of the Country’s dependence on them for socio-economic resources.
E.g. International Monetary Fund (IMF) and the World Bank. The failed 1986 Structural
Adjustment programme imposed on Nigeria by the IMF is an example of such case.
Ojegbile (1986) is of the opinion that the alarming rise of unemployment in Nigeria was as a
result of the mono-product economy the Country decided to adopt. After the discovery of oil in
the 70’s in Nigeria, the government clamped down Agriculture and relied more on oil as a source
of generating revenue for the Country; unfortunately this approach has done more harm than
good in terms of unemployment.
THEORETICAL LITERATURE
Keynes (1936) in his book “The General Theory of Employment, Interest and Money” which
brought about the "Keynesian Revolution” argued the classical analysis of employment and
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insisted on nominal wage flexibility. He pointed out that insufficient demand in the commodity
market ultimately leads to involuntary unemployment; however Keynes concurs that once an
economy moves into a state of high unemployment, the price method will not adjust the
economy back to a high level of employment rather, the government’s qualitative policy will
have to increase the demand for output by raising public expenditure as soon as demand is
increased.
(Okun 1963, p.11) contributed by stating that there is a reverse connection that exists between
unemployment and output of a Country. He proposed a theory that asserts that one percent
decrease in employment is responsible for a three percent increase in input, which can affect a
Country’s foreign-exchange reserve.
According to the Nigeria National Bureau of Statistics Unemployment / under‐employment
watch Q2 (2015) report, unemployment and underemployment were highest for persons in the
work force between the ages of 15‐24 and 25‐34 which represents the youth population work
force. The rate of unemployment within the review period was highest for those within the ages
of 15‐24 (14.9% in Q1 2015, up from 13.7% in Q1 2015), while the underemployment rate for
those within the age’s 15‐24 rose to 33.8% from 30.6% in Q1 2015. For those in the labour force
within the ages of 25‐34 however, unemployment rose to 8.9% in Q2 2015 from 8.2% in Q1
2015 and 6.9% in Q4 2014, while underemployment stood at 19.5% from 17.7% in Q1 2015 and
19.0% in Q4 2014. Accordingly, 48.7% of Nigerians in the labour force (not entire population)
aged 15‐24 were either unemployed or underemployed in Q2 2015 compared to 44.3% in Q1
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2015, while another 28.4% aged 25‐34 were either unemployed or underemployed in Q2 2015
compared to 25.9% in Q1 2015.
The issue of unemployment has eaten deep into the fabric of the Nation like a cankerworm due
to the negligence of Nigerian leaders; the society continues to pay for it dearly on a daily basis.
The high level of youth unemployment in Nigeria has significantly contributed to the dramatic
rise in social unrest and crime such as Kidnapping, “419 yahoo-yahoo scam” Niger Delta
militancy, vandalism of the oil pipelines nationwide, and the Boko Haram (which means
Western Education is forbidden”) crisis amongst other.
One implication of the unemployment scourge is that it leaves most of these youths who will be
parents in their not too distant future with little or no adequate skills to compete globally in a
rapid emerging and competitive world and without the skill and experience it will be difficult for
them to find a balance and propel on the wheels of development (Douglason, 2009).
The cost implication of crime varies among the various segments of the growing youth
population and affects everyone in the society directly or indirectly. As the Nigeria economy
continues to witness growth and development, it is expected that crime rate would gradually
reduce.
The various cost of crime to victims and society include loss of lives, income, property and loss
in community productivity.
According to Nigeria Federal Bureau of statistics (2012), data on age group of people living in
Nigeria imprisoned between 2004 – 2011; youths between 16 and 20 years, 31,700 of them were
jailed in 2004, others include, 40,170 in 2005, 19,122 in 2006, 16,236 in 2007, 25,337 in 2008,
23,743 in 2009, 21,911 in 2010, and 10,103 in 2011. Age between 21 and 25 years, 39,045
youths were jailed in 2004, 34,600 in 2005, 57,736 in 2007, 28, 069 in 2008, 27,468 in 2009,
26,647 in 2010 and 14,835 in 2011 Also, between ages 25 and 50 years, 63,200 persons were
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jailed in 2004, 65,140 in 2005, 75,491 in 2006, 80,134 in 2007, 73,071 in 2008, 98,263 in 2009,
118, 140 in 2010 and 102,330 in 2011.
National Bureau of Statistics 2013
One of the major reasons behind the high number of imprisonment was unemployment
(Douglason 2009). if the culprits were to be gainfully employed with good benefits incentives
they might not have attempted to carry out such unlawful acts that landed them in Prison
REASONS FOR UNEMPLOYMENT IN NIGERIA
The reasons for the increased unemployment rate in Nigeria are quite enormous. Below are some
of the major reasons considered to be what contributed to the influx.
RURAL-URBAN MIGRATION
Rural urban migration also referred to, as urbanization is easier explained with the push-pull
technique. The push –pull factor involves the pressure resulting from a man or woman having no
choice but to leave behind his current residence, city or Country as a result of the unemployment
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or underemployment in that rural area arising from cycle of little or no infrastructure amenities
and development facilities, which generally makes the life in the rural area very unattractive.
Bairoch (1976, p.102) opined that excessive supply of labour cannot be separated from the issue
of the population growth rate due to the fact that size and growth rate of labour force is said to
depend primarily on the size and growth rate of the population. He further added that both have
been growing too rapidly in developing countries to the extent that employment expansion could
not keep pace and thus resulted in the growing unemployment.
Youths move to urban areas in search of greener pastures with the hope of securing lucrative jobs
in the cities and advanced countries of the world. This has brought about brain drain, leaving the
Country/rural areas intellectually barren.
The major cause of rural-urban migration is concentration of social amenities in limited areas
such as the urban centers which result to lack of social and economic opportunities in the interior
and rural areas leading to overcrowding and high crime rate in the urban area.
RAPID POPULATION GROWTH
Nigeria’s population was put at 140,431,790 based on the 2006 population and housing census
conducted by the Nigeria National Population Commission; by October 2011 the Commission
reported that Nigeria’s population had reached 167 million. The prediction for the future shows
that the population could increase to over 221 million by 2020, given the 3.2 percent annual
growth rate (National Population Commission and ICF Macro, 2009).
According to the World Bank (2013), Nigeria is the most populous Black Nation in the World. It
is asserted by researchers that the increasingly high population growth has resulted in the rapid
increase of the work force, which has led to unemployment leaving just a handful of jobs for the
millions of youth to struggle over. The implication of the increasing population growth coupled
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with high level of unemployment in Nigeria is disastrous to the economy and will only bring
about a state of insecurity that is unsafe for the working class and those who fall within the other
age grade.
LOW STANDARD OF EDUCATION
The average Nigerian graduate is unemployable due to the fact that they do not possess the
quality skills required by most employers of labour or for their desired employment.
In Nigeria of today, no employer of labour is ready pay or spend unnecessarily except on human
resource that can contribute positively through their skills and hands on experience to help
achieve the long and short term goals of the organization; since the primary goal of every
business organization is to make profit.
Often times, unemployment is attributed to the low standard of Nigeria’s education system. The
courses taught in Nigeria tertiary institution lack proper entrepreneurial contents that can help the
students become entrepreneurs instead of job seekers upon graduation.
Another factor that has contributed to this long-term crisis is the hindrance of access to
entrepreneurial training caused by limited and stringent access to capital and funds to establish
small and medium-sized enterprises after the training.
This lack of opportunities for young graduates makes them idle and constitutes a nuisance in the
society.
LACK OF ADEQUATE INFRASTRUCTURE
Nigeria is repellant to investors and investment due to lack of constant and sustainable power
supply/energy.
In spite of the several attempt made by the Federal Government to provide the necessary
infrastructure that will encourage a private driven economy, the government has failed. This
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situation has forced firms and organizations in the Country to depend on generators and
alternative power supply for their daily operations, adding to the cost of production, which leads
to an increase in overall running cost of the business.
Besides the epileptic power supply and lack of infrastructure, most organizations in the Country
also bear the burden of multiple taxations being paid by these business owners to the government
at the three tiers (Federal, State and Local). (Adeloye, 2010). These combined factors have made
the cost of managing business organization in Nigeria very difficult.
All these factors have made a very high number of companies fold up while some others have
relocated to a more enabling and economic-friendly environment. When this happens workers
are laid off and the hopes of employment are dashed.
CORRUPTION
Corruption is another big contributor to the cause of growing unemployment in Nigeria, this
unlawful practice has invaded every nook and cranny of the Country; both in the private and
public sector. The high rate of corruption in Nigeria is a product of bad leadership, which has
been spread from the top echelon to the grassroots.
Despite the vast mineral resources Nigeria has at its disposal, corruption has robbed the Country
of becoming a vibrant economy. Public funds supposed to be used for implementing projects
have been syphoned and embezzled by politicians and administrators of public enterprise and
parastatals. According to (Okafor, 2011, p.14) Political leaders, administrators and project
contractors come together and inflate contract fees. This act has robbed Nigeria’s treasury
revenue worth billions of dollars from the sale of oil in the last fifty years. The former Minister
of Petroleum, Allison Madueke still has unanswered cases with the anti-corruption agency
following the misappropriation of public funds that rocked her administration
The Nigerian Leadership sphere in the last sixteen years has failed the citizens due to the trail of
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corruption that has witnessed each successive administration and this has led to the failure of
creating jobs and forming competitive public private partnership; nowadays Nigerian Politicians
no longer serve in the best interest of the public but in the best interest of their family and
friends; only a handful of them are principled while the vast majority of them go into office and
abuse entrusted power for their private gain.
A vivid example of this case is the Subsidy Re-investment and Empowerment Programme
(SURE-P), a supposedly economic intervention that reduced the amount of subsidy paid on the
premium motor spirit (PMS), these funds were expected to be channeled into a combination of
many programmes to promote and provide quality life-changing development to the benefit of
Nigerians and alleviate poverty through provision of l jobs opportunity and safety net projects.
SURE-P has been described by many Nigerians as a drain pipe on Nigerians economy after it
failed to meet up with its objective and misappropriation of 180 billion Naira
($904,636,260,836.79) fund it received from the government in 2013 for the implementation of
project (Okwudili & Emmanuel 2014).
LACK OF POLITICAL WILL
The abandonment of vocational/technical education with much emphasis now placed on the
formal education, which gives no entrepreneurial training, has been making Nigeria miss out of
the potential contributions of young working class group to national development and economic
growth.
The incompetence of lawmakers to make logical and well informed decisions has led Nigeria to
the stage where the Country is today. (Dike 2009, p.51) argues that the state under-employment
in Nigeria could be associated to the neglect to vocational education institutions in spite of the
fact science & technology has been a part of the Country’s National Policy on Primary Education
(NPE) since 1981. Like most public policy in Nigeria, the implementation phase has always
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been the major challenge which many have termed as the lack of political will by our leaders,
simply because they aren’t ready to make sacrifices and pay the political cost it may require.
SKEWED BUDGETARY ALLOCATIONS
Even though Nigeria prides herself to have the largest economy in Africa with the highest GDP,
the average Nigerian standard of living is still all time low as most are underemployed or
unemployed, leaving wealth to revolve around few political elite and associate. This has brought
about a wide margin between the poor and the rich in the Country, which also encourages class
and segregation system.
The Federal Government of Nigeria allocation of distributable revenue is 54%, while that of the
state stands at 25% and the local government gets 19%; out of the 54% share the Federal
government gets, only 20-30% go to capital expenditure, while the remaining share goes to
recurrent and overhead cost; in comparison with a state like Lagos that allocates between 40-
45% to capital expenditure on a yearly basis (Salami, 2013).
One can therefore come to conclusion that there exists a reverse relationship between the capital
expansion and income system. A suggestion is that the Federal government should pay the price
of investing additional resources and committing more funds to infrastructure development in
order to yield increment in the income of Nigerian workers, especially the underpaid; additional
infrastructure will also bring about job creation for the millions of unemployed people in the
Country.
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EFFECTS OF UNEMPLOYMENT PROBLEMS IN NIGERIA
The effect of unemployment can be broadly categorized into three, social, economic and
political. The social consequence brings about inability to provide for basic things and thus leads
to poverty. The economic consequence leads to under-resourcefulness of a nation as a result of
failure to optimize the work force and if this happens for a very long time it will result to
workers losing their skills, loss of human capital and income inequality. The political
consequence of unemployment in Nigeria ranges from Civil unrest, political thuggery, terrorism
etc. Others are:
INEQUALITY OF INCOME: Inequality of income is one of the adverse effects of
unemployment in Nigeria. According to the Nigeria Federal Bureau of statistics (2011), in 2010,
65% of Nigeria’s wealth was owned by just about 20% of the population, which led to many
dimensions like concentration of wealth in the hands of few individual while majority so the
population suffered in abject poverty.
Inequality of income, poverty and unemployment can be said to be the cause of the increase in
violence and crime in Nigeria. Failure on the path of government to address socio-economic
issues facing Nigeria has brought about the accelerated increase in the unemployment rate.
DECLINE IN QUALITY OF LIFE: In Nigeria, unemployment has brought about the decline
in quality of life and standard of living. This has also created a vicious cycle of insecurity,
tension, conflicts, decline in access to shelter, education, health care etc. which ultimately leads
to reduction in life span.
NLC (2012) asserts that increase in the number of employment available and a rebased GDP
does not transform into social well being for the public. Unemployment has intensified the
epidemic of insecurity and other social vices in the society.
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RECOMENDATIONS
Unemployment is one of the most devastating ailments troubling Nigeria. In addressing this
scourge, a holistic approach is needed to help combat and shrink the excesses of its stinkers.
The following are recommendations to deal with Nigeria’s rapid increase in unemployment.
INFRASTRUCTURAL DEVELOPMENT: In order to savage the unemployment situation in
Nigeria, the government has to invest heavily to help promote infrastructure development in the
Country. A good example is power generation; the epileptic power infrastructure is a factor that
has contributed to the slow development of the Country. The poor state of in Nigeria has made
many organizations fold up while some others have had to relocate to neighboring countries with
good power infrastructures leaving thousands jobless.
If the government is able to invest funds in getting more megawatts to enhance power generation
more Organization would spring up leading to employment opportunities for job seeker. In
addition to the power Infrastructure, the government also have to have to develop transportation
systems in the county by creating alternative transportation systems and construct roads to help
promote agriculture in the Country.
One of the reason agriculture has failed in Nigeria is a s a result of bad road network, if this is
fixed then Nigeria agriculture sector would bounce back again and this will bring about more
jobs for the unemployed youths.
If all these are readily available it will attract both local and foreign investment in the Country
DIVERSIFICATION OF THE ECONOMY:
One of the failures of the past Government administration is the reliance on oil as its main source
of revenue at the expense of agriculture and other sectors.
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Diversification of Nigeria’s economy is the only viable way to survive the current
environment of global economic trend; It is crucialfor the government not to
believe that oil provides an endless source of revenue (Suberu et al., 2015, p.107)
When Nigeria’s economy is diversified and other sectors like mining and agriculture are
allocated necessary funds to operate, it will definitely require more hands to help in the discharge
of duties and this will help engage the unemployed youths as well as increase productivity on the
path of government which will amount to a win-win situation.
On October 1st
1960 when Nigeria gained independence, the key drivers of the economy were
mining and agriculture but by the 70’s when crude oil was discovered, mining and agriculture
were neglected and crude oil took over, making Nigeria become a mono-product economy. This
had led to an increase in the rate of unemployment in the Country.
ENTREPRENEURSHIP DEVELOPMENT & SKILL ACQUISITION:
Nigerian government have to go back to the drawing board and re-incorporate skill acquisition
and entrepreneurship development curriculum for every student in tertiary institutions so that
they can be sensitized and trained on vocational training.
The government should invest more on education that will empower the average Nigerian youth
to become self-reliance as opposed to seeking white-collar jobs after graduation. This can be
achieved through skill acquisition and entrepreneurship development.
Currently the government is promoting skills acquisition programs in the Country through the
National Youth Service Corps (NYSC) a one-year programme designed for graduates of
Polytechnics, College of Education and Universities.
The objective of the Skills Acquisition and Entrepreneurship Development (SAED) programme
is to sensitize Corps members on the need to empower themselves with skills that can make them
employers of labour rather than having to look for job after school.
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ACCESS TO GRANTS AND LOANS WITH LOW INTEREST RATE
An avenue to endi unemployment in Nigeria would be to provide convenient loan systems to
budding entrepreneurs to help them expand or set up small and medium sized businesses. Often
times, emerging entrepreneurs who have good ideas and initiative are discouraged by the bank
lending rate and this make them resort to doing nothing.
If access to credit at no more than ten percent interest rate were provided as opposed to the 25%
lending rate applicable in Nigeria, it would create a ripple effect that will lead to a virtuous
cycle of reducing unemployment at a geometric rate. In essence, the loan they receive will allow
them set-up their businesses and employ people to work with.
In addition to the loan system, the government can also increase business ideas pitching. This
will grant those who have valid business ideas seed funds to grow their business, and help solve
unemployment by employing a significant number of people in the Country.
CONCLUSION
The scourge of unemployment in Nigeria is a deterrent to the Nations dream of a progressive
economy. This could have been avoided if proper planning for the future had been put in place,
not withstanding it is not too late to right the wrongs of the past government.
Issues like rural-urban migration, corruption, low infrastructure investment, epileptic power
supply, low standard of education, rapid population growths etc. are the major deterrent to high
employment opportunity in the Country, if the government can fix this, then Nigeria will be on
the rise to greatness once again.
Unemployment has affected Nigeria and contributed heavily to the instability and uprisings in
the Country. Lack of good jobs and underemployment has resulted in inequality of income,
which has further accelerated the spread of poverty, also it resulted in political consequence like
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civil unrest, political thuggery, terrorism etc.
Youth unemployment is a threat to the future development of Nigeria and requires holistic
approach in resolving the issue. Solutions on how high rate of unemployment in Nigeria were
recommended, they include: infrastructure development, diversification of the economy,
entrepreneurship development and skills acquisition, access to grants and loans with low interest
rate etc.
Enough of the lip service, the Nigerian government should provide an enabling environment that
would promote industrial climate investment for emerging entrepreneurs and give room for a
private driven economy. Members of the public are also expected to hold the government
accountable in ensuring they fulfill their promises and make policies that will meet the yearning
needs of unemployed youths in Nigeria.
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Youth Unemployment in Nigeria

  • 1. UNIVERSITY OF BOTSWANA FACULTY OF SOCIAL SCIENCES DEPARTMENT OF POLITICAL AND ADMINISTRATIVE STUDIES MPA-604 ECONOMICS FOR DEVELOPMENT MANAGEMENT STUDENT NAME: SOLOMON SAMUEL ADETOKUNBO STUDENT NUMBER: 201502535 EMAIL: Samuelisolomon@gmail.com 1
  • 2. LECTURE: PROFFESOR E. BOTHALE TERM-PAPER TITLE UNEMPLOYEMENT: A STUDY OF NIGERIA YOUTH UNEMPLOYMENT: A STUDY OF NIGERIA INTRODUCTION Unemployment continues to be a global issue even as the world population continues to increase. Some countries have effectively put in place policies that mitigate this growing issue while others have failed to plan and continue to suffer the consequences of their actions and inactions on a daily basis. According to International Labour Organization (ILO) report, (World Employment and Social Outlook Trends, 2015), there are 201 million people currently unemployed globally and by the year 2019 more than 212 million people of the worlds population will be out of work.; fortunately Countries like Singapore, Qatar, Thailand etc. were able to make long-term policies that have helped stabilize their unemployment rate. Reports from the 1952 census held in Nigeria indicate that the Country witnessed stable employment during that period, four decades after reverse was the case. This threw the Country 2
  • 3. in disarray and led to build up of unlawful practices in Nigeria. (Ojo, 1997, p.14). According to the Central Bank of Nigeria (1992) in 1990 unemployment rate in Nigeria stood at 3.2%, by 1995 it improved and reduced to at 1.8%. By 2003 it rose to 2.3%, ever since then it has kept on increasing with no practical solutions from the government to help in curbing the factors responsible for the increase. (Uniamikogbo, 1997, p.42). This term paper therefore, seeks to explore the issue of unemployment in Nigeria, causes and implication on the economy; Attempts was also made at recommending solutions to help tackle the scourge of unemployment in Nigeria to the barest minimum CONCEPT OF UNEMPLOYMENT Unemployment in general refers to the condition of people who are without jobs but fall within the workable age. The ILO defines the “unemployed,” as numbers of the economically active population who are without work but available for and seeking work, including people who have lost their jobs and those who have voluntarily left work. (National Bureau of Statistics, 2010). According to (Adebayo, 1999; Bakare 2011), unemployment exists when the members of a Country’s labor force wish to work but there are no jobs anywhere. It is the governments responsibility to strive and ensure it provides good jobs and permeate favorable enabling environment that will encourage young people to be employers of labour (entrepreneurs) so they can create jobs rather than waiting for white collar jobs. For the purpose of this term paper, unemployment will be described as when group of men and women who fall within the working class age grade have the basic skills and are willing to work but cannot find any job most especially the ones they desire for; or jobs that are in line with their area of expertise and skills. When the supply of labour is more than the demand for labour, it ultimately leads to joblessness 3
  • 4. and creates unemployment (Onah & Bakare 2011). Due to the lack of sufficient employment opportunities readily available in the formal sector, young people are left with no better option than to engage in casual work, thus leading to underemployment LITERATURE REVIEW CATEGORIES OF UNEMPLOYMENT Various researchers have categorized unemployment into different forms; often times the forms depend on the socio-economic climate of the research in focus. Congress of the United States (2012) categorized unemployment into two forms: those that have lost their jobs as a result of workers being laid off and those newly entering the labour force after completing school with no job. In the same vein Oyebade (2003, p.11), grouped unemployment into two categories, the older unemployed who lost their jobs through redundancy or bankruptcy and the younger unemployed, most of who have never been unemployed. To term “underemployed”, simply refers to all the people who are not fully involved and in any productive activity. CAUSES OF UNEMPLOYMENT Diejomah & Orimalade (1 s971, p.51) opined that reduction in the demand for labour, which has resulted in the increase of unemployed labour force, has led to the high rate of unemployment problems in Nigeria and will continue if measures are not put in place to correct this. The duo are also of the opinion that another factor responsible for the increase in the unemployed labor force is the growing increase of the labour force in urban areas which is caused by the push-pull factor that arises from the rural-urban migration. 4
  • 5. Edwards (1979) elucidates more on the rural-urban movement by using the push - pull factors to explain the causes of unemployment. According to him, the push factor arises as a result of the pressure coming from the man-land ratio that exists in the rural areas. Todaro (1987, p.12) blames the rural-urban migration that is generated by the push-pull factor to the distastefulness and repulsiveness of life in the rural areas caused by in-accessibility to infrastructure and basic amenities Todaro (1987, p.36) attributes rural-urban migration to the relative unattractiveness of rural life due to lack of basic amenities. This push-pull factor brings about a constantly widening rural- urban income gap in favour of urban dwellers and a presumed higher probability of securing wage employment in the cities. Unemployment in Nigeria is soaring high due to government’s decision to administer the economy with policies that are extraneous and not fit to meet the yearning of the public. Some of these policies are usually forced or shoved down the throat of countries who are beneficiaries if foreign donors as a result of the Country’s dependence on them for socio-economic resources. E.g. International Monetary Fund (IMF) and the World Bank. The failed 1986 Structural Adjustment programme imposed on Nigeria by the IMF is an example of such case. Ojegbile (1986) is of the opinion that the alarming rise of unemployment in Nigeria was as a result of the mono-product economy the Country decided to adopt. After the discovery of oil in the 70’s in Nigeria, the government clamped down Agriculture and relied more on oil as a source of generating revenue for the Country; unfortunately this approach has done more harm than good in terms of unemployment. THEORETICAL LITERATURE Keynes (1936) in his book “The General Theory of Employment, Interest and Money” which brought about the "Keynesian Revolution” argued the classical analysis of employment and 5
  • 6. insisted on nominal wage flexibility. He pointed out that insufficient demand in the commodity market ultimately leads to involuntary unemployment; however Keynes concurs that once an economy moves into a state of high unemployment, the price method will not adjust the economy back to a high level of employment rather, the government’s qualitative policy will have to increase the demand for output by raising public expenditure as soon as demand is increased. (Okun 1963, p.11) contributed by stating that there is a reverse connection that exists between unemployment and output of a Country. He proposed a theory that asserts that one percent decrease in employment is responsible for a three percent increase in input, which can affect a Country’s foreign-exchange reserve. According to the Nigeria National Bureau of Statistics Unemployment / under‐employment watch Q2 (2015) report, unemployment and underemployment were highest for persons in the work force between the ages of 15‐24 and 25‐34 which represents the youth population work force. The rate of unemployment within the review period was highest for those within the ages of 15‐24 (14.9% in Q1 2015, up from 13.7% in Q1 2015), while the underemployment rate for those within the age’s 15‐24 rose to 33.8% from 30.6% in Q1 2015. For those in the labour force within the ages of 25‐34 however, unemployment rose to 8.9% in Q2 2015 from 8.2% in Q1 2015 and 6.9% in Q4 2014, while underemployment stood at 19.5% from 17.7% in Q1 2015 and 19.0% in Q4 2014. Accordingly, 48.7% of Nigerians in the labour force (not entire population) aged 15‐24 were either unemployed or underemployed in Q2 2015 compared to 44.3% in Q1 6
  • 7. 2015, while another 28.4% aged 25‐34 were either unemployed or underemployed in Q2 2015 compared to 25.9% in Q1 2015. The issue of unemployment has eaten deep into the fabric of the Nation like a cankerworm due to the negligence of Nigerian leaders; the society continues to pay for it dearly on a daily basis. The high level of youth unemployment in Nigeria has significantly contributed to the dramatic rise in social unrest and crime such as Kidnapping, “419 yahoo-yahoo scam” Niger Delta militancy, vandalism of the oil pipelines nationwide, and the Boko Haram (which means Western Education is forbidden”) crisis amongst other. One implication of the unemployment scourge is that it leaves most of these youths who will be parents in their not too distant future with little or no adequate skills to compete globally in a rapid emerging and competitive world and without the skill and experience it will be difficult for them to find a balance and propel on the wheels of development (Douglason, 2009). The cost implication of crime varies among the various segments of the growing youth population and affects everyone in the society directly or indirectly. As the Nigeria economy continues to witness growth and development, it is expected that crime rate would gradually reduce. The various cost of crime to victims and society include loss of lives, income, property and loss in community productivity. According to Nigeria Federal Bureau of statistics (2012), data on age group of people living in Nigeria imprisoned between 2004 – 2011; youths between 16 and 20 years, 31,700 of them were jailed in 2004, others include, 40,170 in 2005, 19,122 in 2006, 16,236 in 2007, 25,337 in 2008, 23,743 in 2009, 21,911 in 2010, and 10,103 in 2011. Age between 21 and 25 years, 39,045 youths were jailed in 2004, 34,600 in 2005, 57,736 in 2007, 28, 069 in 2008, 27,468 in 2009, 26,647 in 2010 and 14,835 in 2011 Also, between ages 25 and 50 years, 63,200 persons were 7
  • 8. jailed in 2004, 65,140 in 2005, 75,491 in 2006, 80,134 in 2007, 73,071 in 2008, 98,263 in 2009, 118, 140 in 2010 and 102,330 in 2011. National Bureau of Statistics 2013 One of the major reasons behind the high number of imprisonment was unemployment (Douglason 2009). if the culprits were to be gainfully employed with good benefits incentives they might not have attempted to carry out such unlawful acts that landed them in Prison REASONS FOR UNEMPLOYMENT IN NIGERIA The reasons for the increased unemployment rate in Nigeria are quite enormous. Below are some of the major reasons considered to be what contributed to the influx. RURAL-URBAN MIGRATION Rural urban migration also referred to, as urbanization is easier explained with the push-pull technique. The push –pull factor involves the pressure resulting from a man or woman having no choice but to leave behind his current residence, city or Country as a result of the unemployment 8
  • 9. or underemployment in that rural area arising from cycle of little or no infrastructure amenities and development facilities, which generally makes the life in the rural area very unattractive. Bairoch (1976, p.102) opined that excessive supply of labour cannot be separated from the issue of the population growth rate due to the fact that size and growth rate of labour force is said to depend primarily on the size and growth rate of the population. He further added that both have been growing too rapidly in developing countries to the extent that employment expansion could not keep pace and thus resulted in the growing unemployment. Youths move to urban areas in search of greener pastures with the hope of securing lucrative jobs in the cities and advanced countries of the world. This has brought about brain drain, leaving the Country/rural areas intellectually barren. The major cause of rural-urban migration is concentration of social amenities in limited areas such as the urban centers which result to lack of social and economic opportunities in the interior and rural areas leading to overcrowding and high crime rate in the urban area. RAPID POPULATION GROWTH Nigeria’s population was put at 140,431,790 based on the 2006 population and housing census conducted by the Nigeria National Population Commission; by October 2011 the Commission reported that Nigeria’s population had reached 167 million. The prediction for the future shows that the population could increase to over 221 million by 2020, given the 3.2 percent annual growth rate (National Population Commission and ICF Macro, 2009). According to the World Bank (2013), Nigeria is the most populous Black Nation in the World. It is asserted by researchers that the increasingly high population growth has resulted in the rapid increase of the work force, which has led to unemployment leaving just a handful of jobs for the millions of youth to struggle over. The implication of the increasing population growth coupled 9
  • 10. with high level of unemployment in Nigeria is disastrous to the economy and will only bring about a state of insecurity that is unsafe for the working class and those who fall within the other age grade. LOW STANDARD OF EDUCATION The average Nigerian graduate is unemployable due to the fact that they do not possess the quality skills required by most employers of labour or for their desired employment. In Nigeria of today, no employer of labour is ready pay or spend unnecessarily except on human resource that can contribute positively through their skills and hands on experience to help achieve the long and short term goals of the organization; since the primary goal of every business organization is to make profit. Often times, unemployment is attributed to the low standard of Nigeria’s education system. The courses taught in Nigeria tertiary institution lack proper entrepreneurial contents that can help the students become entrepreneurs instead of job seekers upon graduation. Another factor that has contributed to this long-term crisis is the hindrance of access to entrepreneurial training caused by limited and stringent access to capital and funds to establish small and medium-sized enterprises after the training. This lack of opportunities for young graduates makes them idle and constitutes a nuisance in the society. LACK OF ADEQUATE INFRASTRUCTURE Nigeria is repellant to investors and investment due to lack of constant and sustainable power supply/energy. In spite of the several attempt made by the Federal Government to provide the necessary infrastructure that will encourage a private driven economy, the government has failed. This 10
  • 11. situation has forced firms and organizations in the Country to depend on generators and alternative power supply for their daily operations, adding to the cost of production, which leads to an increase in overall running cost of the business. Besides the epileptic power supply and lack of infrastructure, most organizations in the Country also bear the burden of multiple taxations being paid by these business owners to the government at the three tiers (Federal, State and Local). (Adeloye, 2010). These combined factors have made the cost of managing business organization in Nigeria very difficult. All these factors have made a very high number of companies fold up while some others have relocated to a more enabling and economic-friendly environment. When this happens workers are laid off and the hopes of employment are dashed. CORRUPTION Corruption is another big contributor to the cause of growing unemployment in Nigeria, this unlawful practice has invaded every nook and cranny of the Country; both in the private and public sector. The high rate of corruption in Nigeria is a product of bad leadership, which has been spread from the top echelon to the grassroots. Despite the vast mineral resources Nigeria has at its disposal, corruption has robbed the Country of becoming a vibrant economy. Public funds supposed to be used for implementing projects have been syphoned and embezzled by politicians and administrators of public enterprise and parastatals. According to (Okafor, 2011, p.14) Political leaders, administrators and project contractors come together and inflate contract fees. This act has robbed Nigeria’s treasury revenue worth billions of dollars from the sale of oil in the last fifty years. The former Minister of Petroleum, Allison Madueke still has unanswered cases with the anti-corruption agency following the misappropriation of public funds that rocked her administration The Nigerian Leadership sphere in the last sixteen years has failed the citizens due to the trail of 11
  • 12. corruption that has witnessed each successive administration and this has led to the failure of creating jobs and forming competitive public private partnership; nowadays Nigerian Politicians no longer serve in the best interest of the public but in the best interest of their family and friends; only a handful of them are principled while the vast majority of them go into office and abuse entrusted power for their private gain. A vivid example of this case is the Subsidy Re-investment and Empowerment Programme (SURE-P), a supposedly economic intervention that reduced the amount of subsidy paid on the premium motor spirit (PMS), these funds were expected to be channeled into a combination of many programmes to promote and provide quality life-changing development to the benefit of Nigerians and alleviate poverty through provision of l jobs opportunity and safety net projects. SURE-P has been described by many Nigerians as a drain pipe on Nigerians economy after it failed to meet up with its objective and misappropriation of 180 billion Naira ($904,636,260,836.79) fund it received from the government in 2013 for the implementation of project (Okwudili & Emmanuel 2014). LACK OF POLITICAL WILL The abandonment of vocational/technical education with much emphasis now placed on the formal education, which gives no entrepreneurial training, has been making Nigeria miss out of the potential contributions of young working class group to national development and economic growth. The incompetence of lawmakers to make logical and well informed decisions has led Nigeria to the stage where the Country is today. (Dike 2009, p.51) argues that the state under-employment in Nigeria could be associated to the neglect to vocational education institutions in spite of the fact science & technology has been a part of the Country’s National Policy on Primary Education (NPE) since 1981. Like most public policy in Nigeria, the implementation phase has always 12
  • 13. been the major challenge which many have termed as the lack of political will by our leaders, simply because they aren’t ready to make sacrifices and pay the political cost it may require. SKEWED BUDGETARY ALLOCATIONS Even though Nigeria prides herself to have the largest economy in Africa with the highest GDP, the average Nigerian standard of living is still all time low as most are underemployed or unemployed, leaving wealth to revolve around few political elite and associate. This has brought about a wide margin between the poor and the rich in the Country, which also encourages class and segregation system. The Federal Government of Nigeria allocation of distributable revenue is 54%, while that of the state stands at 25% and the local government gets 19%; out of the 54% share the Federal government gets, only 20-30% go to capital expenditure, while the remaining share goes to recurrent and overhead cost; in comparison with a state like Lagos that allocates between 40- 45% to capital expenditure on a yearly basis (Salami, 2013). One can therefore come to conclusion that there exists a reverse relationship between the capital expansion and income system. A suggestion is that the Federal government should pay the price of investing additional resources and committing more funds to infrastructure development in order to yield increment in the income of Nigerian workers, especially the underpaid; additional infrastructure will also bring about job creation for the millions of unemployed people in the Country. 13
  • 14. EFFECTS OF UNEMPLOYMENT PROBLEMS IN NIGERIA The effect of unemployment can be broadly categorized into three, social, economic and political. The social consequence brings about inability to provide for basic things and thus leads to poverty. The economic consequence leads to under-resourcefulness of a nation as a result of failure to optimize the work force and if this happens for a very long time it will result to workers losing their skills, loss of human capital and income inequality. The political consequence of unemployment in Nigeria ranges from Civil unrest, political thuggery, terrorism etc. Others are: INEQUALITY OF INCOME: Inequality of income is one of the adverse effects of unemployment in Nigeria. According to the Nigeria Federal Bureau of statistics (2011), in 2010, 65% of Nigeria’s wealth was owned by just about 20% of the population, which led to many dimensions like concentration of wealth in the hands of few individual while majority so the population suffered in abject poverty. Inequality of income, poverty and unemployment can be said to be the cause of the increase in violence and crime in Nigeria. Failure on the path of government to address socio-economic issues facing Nigeria has brought about the accelerated increase in the unemployment rate. DECLINE IN QUALITY OF LIFE: In Nigeria, unemployment has brought about the decline in quality of life and standard of living. This has also created a vicious cycle of insecurity, tension, conflicts, decline in access to shelter, education, health care etc. which ultimately leads to reduction in life span. NLC (2012) asserts that increase in the number of employment available and a rebased GDP does not transform into social well being for the public. Unemployment has intensified the epidemic of insecurity and other social vices in the society. 14
  • 15. RECOMENDATIONS Unemployment is one of the most devastating ailments troubling Nigeria. In addressing this scourge, a holistic approach is needed to help combat and shrink the excesses of its stinkers. The following are recommendations to deal with Nigeria’s rapid increase in unemployment. INFRASTRUCTURAL DEVELOPMENT: In order to savage the unemployment situation in Nigeria, the government has to invest heavily to help promote infrastructure development in the Country. A good example is power generation; the epileptic power infrastructure is a factor that has contributed to the slow development of the Country. The poor state of in Nigeria has made many organizations fold up while some others have had to relocate to neighboring countries with good power infrastructures leaving thousands jobless. If the government is able to invest funds in getting more megawatts to enhance power generation more Organization would spring up leading to employment opportunities for job seeker. In addition to the power Infrastructure, the government also have to have to develop transportation systems in the county by creating alternative transportation systems and construct roads to help promote agriculture in the Country. One of the reason agriculture has failed in Nigeria is a s a result of bad road network, if this is fixed then Nigeria agriculture sector would bounce back again and this will bring about more jobs for the unemployed youths. If all these are readily available it will attract both local and foreign investment in the Country DIVERSIFICATION OF THE ECONOMY: One of the failures of the past Government administration is the reliance on oil as its main source of revenue at the expense of agriculture and other sectors. 15
  • 16. Diversification of Nigeria’s economy is the only viable way to survive the current environment of global economic trend; It is crucialfor the government not to believe that oil provides an endless source of revenue (Suberu et al., 2015, p.107) When Nigeria’s economy is diversified and other sectors like mining and agriculture are allocated necessary funds to operate, it will definitely require more hands to help in the discharge of duties and this will help engage the unemployed youths as well as increase productivity on the path of government which will amount to a win-win situation. On October 1st 1960 when Nigeria gained independence, the key drivers of the economy were mining and agriculture but by the 70’s when crude oil was discovered, mining and agriculture were neglected and crude oil took over, making Nigeria become a mono-product economy. This had led to an increase in the rate of unemployment in the Country. ENTREPRENEURSHIP DEVELOPMENT & SKILL ACQUISITION: Nigerian government have to go back to the drawing board and re-incorporate skill acquisition and entrepreneurship development curriculum for every student in tertiary institutions so that they can be sensitized and trained on vocational training. The government should invest more on education that will empower the average Nigerian youth to become self-reliance as opposed to seeking white-collar jobs after graduation. This can be achieved through skill acquisition and entrepreneurship development. Currently the government is promoting skills acquisition programs in the Country through the National Youth Service Corps (NYSC) a one-year programme designed for graduates of Polytechnics, College of Education and Universities. The objective of the Skills Acquisition and Entrepreneurship Development (SAED) programme is to sensitize Corps members on the need to empower themselves with skills that can make them employers of labour rather than having to look for job after school. 16
  • 17. ACCESS TO GRANTS AND LOANS WITH LOW INTEREST RATE An avenue to endi unemployment in Nigeria would be to provide convenient loan systems to budding entrepreneurs to help them expand or set up small and medium sized businesses. Often times, emerging entrepreneurs who have good ideas and initiative are discouraged by the bank lending rate and this make them resort to doing nothing. If access to credit at no more than ten percent interest rate were provided as opposed to the 25% lending rate applicable in Nigeria, it would create a ripple effect that will lead to a virtuous cycle of reducing unemployment at a geometric rate. In essence, the loan they receive will allow them set-up their businesses and employ people to work with. In addition to the loan system, the government can also increase business ideas pitching. This will grant those who have valid business ideas seed funds to grow their business, and help solve unemployment by employing a significant number of people in the Country. CONCLUSION The scourge of unemployment in Nigeria is a deterrent to the Nations dream of a progressive economy. This could have been avoided if proper planning for the future had been put in place, not withstanding it is not too late to right the wrongs of the past government. Issues like rural-urban migration, corruption, low infrastructure investment, epileptic power supply, low standard of education, rapid population growths etc. are the major deterrent to high employment opportunity in the Country, if the government can fix this, then Nigeria will be on the rise to greatness once again. Unemployment has affected Nigeria and contributed heavily to the instability and uprisings in the Country. Lack of good jobs and underemployment has resulted in inequality of income, which has further accelerated the spread of poverty, also it resulted in political consequence like 17
  • 18. civil unrest, political thuggery, terrorism etc. Youth unemployment is a threat to the future development of Nigeria and requires holistic approach in resolving the issue. Solutions on how high rate of unemployment in Nigeria were recommended, they include: infrastructure development, diversification of the economy, entrepreneurship development and skills acquisition, access to grants and loans with low interest rate etc. Enough of the lip service, the Nigerian government should provide an enabling environment that would promote industrial climate investment for emerging entrepreneurs and give room for a private driven economy. Members of the public are also expected to hold the government accountable in ensuring they fulfill their promises and make policies that will meet the yearning needs of unemployed youths in Nigeria. REFERENCES 18
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