1. Youth Unemployment in Nigeria –
Challenges and Way Forward
Akin Iwayemi
Department of Economics
University of Ibadan
Ibadan, Nigeria
Email :akiniwayemi@hotmail.com
Presented at the World Bank World Bank Regional Workshop
on Youth Employment Abuja July 23 and 24, 2013
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2. 1. Introduction and Overview
• The emergence and persistence of massive youth
joblessness, declining well being of majority of Nigerians despite
significant endowment of human and natural resources raise three
fundamental questions which this paper attempts to provide some
answers.
• First, what do we know and what have we learnt about the
emergence and persistence of youth unemployment?
• Second, what are the key challenges that confront effective and
efficient solution of the evolving social, economic and security
challenge?
• Third, how do we transit effectively and efficiently from the
current dismal situation to a more satisfactory environment
characterized by an economic future most young people are
gainfully employed in decent work?
• The scope of this paper is defined by these questions.
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3. 2. The Nature and Character of
Youth Unemployment in Nigeria
• Nigeria with a population of about 160 million people is the most
populous African country and among the top six most populous
countries globally.
• With annual population growth rate of 2.8% the country is yet to
experience the demographic transition (illustrated by significant
decline in fertility rate and high dependency ratio).
• Arguably, and from the perspective of our subject matter, eliminating
youth unemployment is more challenging where there is no
demographic transition.
• Of the labour force of 67.3 million people in 2011 which was about
41% of the total population, 76.1% was gainfully employed. This
however, is about 10.5% decline from 2008 figure.
• In the past five years, an average 2 million people enter the job
market despite the declining rate of job creation in the economy
fuelling the massive joblessness in the economy.
• Unskilled and semi-skilled workers dominate the structure of the
labour market.
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4. 2.The Nature and Character of
Youth Unemployment in Nigeria
• A striking observation is that one in four Nigerian was unemployed in
2012 compared to one in seven in 2008.
• Also notable, is that unemployment is becoming more of a rural
phenomenon 25.6% compared to 16.1% in urban areas.
• There is not much differential in the unemployment rate by gender
(24.3% female, 23.5% male).
• There is a wide disparity in the unemployment rate, with the range
spanning 7.5% to 39%. The highest unemployment rate is in Yobe
state with 39% while Lagos state has the lowest rate of 7.5%.
• All categories of educational levels below post graduate had double
digit unemployment rates above 20%, (20.2% for bachelors’ degrees
to 33.4% for Junior Secondary School Certificates).
• Unemployed educated and young people are a growing phenomenon
of the unemployment crisis
• Based on age group classification, the 15-24 age group has the
highest unemployment rate of 37.7%, followed by the 25-44 age
group with unemployment rate of 22.4%.
• These millions of poor and unemployed youth are made up of a mix of
educated and poorly educated young people.
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5. 3.Challenges in Setting the
Agenda for Sustainable Youth
Employment
• The challenges to sustainable youth employment
are multi-dimensional. They encompass
economic, social, political and cultural issues
which include:
• Weak economic, political and social institutions
• Accountability and Transparency in governance
• High cost of governance reducing available resources to
support job-creating opportunities for young people at
federal and state levels
• Political and bureaucratic corruption
• Jobless economic growth.
• Inadequate economic diversification based on current
economic structure
• Weak integration of SME’s with the rest of the industrial
sector with focus on raising their productivity level
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6. 3.Challenges in Setting the Agenda for
Sustainable Youth Employment
• Fiscal stimulus for job creation in the context of our fiscal history
and the need to maintain a stable macroeconomic environment
• High cost of finance
• Reducing free riding and other opportunistic behaviour in the
economy.
• Pricing, demand and supply of energy and infrastructure services.
• Declining education standards
• Lack of demographic transition
• Crime and insecurity.
• Federal Constitution and the operation of federalism in job
creation
• Large scale and medium term interventions including grants and
other financial support when governance is weak.
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7. 4: Path to Sustainable Youth
Employment in Nigeria
• The following are note worthy, though not exhaustive in terms of
some specific issues in the design and implementation of optimal
policy strategies for promoting youth employment.
• Most critical is improving the quality of institutions to support
economic growth and especially job creation.
• Establishment and sustenance of good institutions will reduce the
high cost of economic and social transactions and enhance the
ability of the economy and youth to be job creators than job
seekers only.
• More specifically, the radical reform of existing institutional
framework for promoting youth unemployment at both state and
federal levels is essential for sustainable youth employment.
• Several institutions have been set up over the years to tackle
youth unemployment but they have produced no significant
impact on the growing economic and social malaise.
• The effectiveness of the Industrial Training Fund, National
Directorate of Employment, Bank of Industry, Bank of Agriculture
and SMEDAN, to mention a few, in meeting their goals and
objectives needs to be evaluated to make more relevant.
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8. 4: Path to Sustainable Youth
Employment in Nigeria
• Security has become an important economic and political issue in
both the North and Niger Delta regions. Increasing security is a
sine qua non for sustainable economic growth and employment
creation. The impact of insecurity on the economy of several
states in the north is widely acknowledged.
• Systematic reduction in the cost of governance and corruption and
the use of the cost savings to support youth employment
programmes
• Phased elimination of fuel subsidy and the use of the cost savings
to support youth employment programmes
• Reduce the administrative, regulatory, economic and technical
barriers to entry of the youth as entrepreneurs
• Careful sequencing and implementation of investment supporting
infrastructure.
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9. 4: Path to Sustainable Youth
Employment in Nigeria
• Investment and development of agriculture value chain
underpinned by young agropreneurs will provide substantial short
term opportunities for young people.
• Creating synergy between the federal and state governments in
youth employment creation
• Financial market developments to support innovation drives
among young people and thus encourage them to be job creators
than job seekers. Improving access to finance and technology
acquisition are critical enablers in the promotion of sustainable
youth employment strategy
• Risk mitigation measures for job creators to reduce the difficult
risk environment for business in the country.
• Design of policy support and incentive plan to encourage and
reward young people who are job creators than job seekers.
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10. 4: Path to Sustainable Youth
Employment in Nigeria
• Minimize the discrepancy between what is in the budget and what
is disbursed in ministries and implementing agencies concerned
with the promotion of youth employment.
• Revamp of the educational system to re-establish quality and
standards so as to produce more appropriate human capital but
also supply more job creators. The introduction of
entrepreneurship centres and courses at the tertiary level is
commendable.
• Formulate, implement and ultimately institutionalize a national
skills programme to impart skills to the active population. This
could be based on state or zonal skills centres that will be jointly
supported by both state and federal governments. The Technical
and Vocational System has not been effective in producing the
skills required to support a diversified economy that seeks to be
globally competitive.
• Enlarge the scope of capacity building in research and
development with focus on assisting business development
services while recognizing the peculiarities of both the urban and
rural economy.
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11. 4: Path to Sustainable Youth
Employment in Nigeria
• Accountability and proper oversight functions of the legislative
houses to monitor and evaluate the effectiveness of youth
employment promotion programmes and projects.
• Support and sustain a robust business climate that is conducive
for all economic actors, small, medium, and large scale by
improving service delivery with electricity and transportation the
most critical. Nigeria is a laggard in this regard globally.
• Wider dissemination of information on opportunities for job
creation for youth using different information platform
• Undertake research to assist policy design and implementation on
promoting as well as prioritize youth employment options.
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