How to boost jobs, engage the youth in Nigeria, by World Bank

The World Bank seemed to be reading the mind of the Federal Government when it stated last week that with over 170 million people and a high rate of population growth, Nigeria needs to create 40 to 50 million additional jobs between 2010 and 2030.

The issue of youth unemployment cannot be over estimated as about two million youths enter the labour market every year.

Three new World Bank reports focus on this challenging agenda: reduce poverty and promote more inclusive growth, these jobs need to be more productive and provide higher incomes than the country’s jobs today.

The report tagged “More, and More Productive, Jobs for Nigeria” provides a detailed overview of jobs, workers, and employment opportunities, while “Understanding and Driving Private Sector growth in Nigeria” studies constraints and drivers of firm-level growth and implications for employment.” The third report “Skills for Competitiveness and Employability” examines the demand in priority economic and job growth sectors and how to ensure that Nigerians have the right skills. .

The World Bank Country Director for Nigeria, Rachid Benmessaoud explained that understanding where people work, constraints to firm growth, and the skills needed is fundamental for formulating appropriate policies while the solid, detailed diagnostics in these reports are critical inputs to developing education and jobs strategies for Nigeria. “

The reports show that “two Nigeria” seem to be emerging: One in which high and diversified growth provides more job and income opportunities, and one in which workers are trapped in traditional subsistence activities. The reports also show a geographic divide, with northern Nigeria having low levels of education access and high youth underemployment than the South. Although skills required in Nigeria remain mostly manual, the South is experiencing more demand for the cognitive skills required by the new knowledge economy.

According to the studies, thew majority of adult Nigerians are employed but locked into low-productivity and low-income work, with no job or income security. The studies find that half of working Nigerians are in small-holder farming and another 30 percent working as self-employed in small or micro household enterprises in the non-agricultural sector. Their work is not enough to escape poverty, or attain middle-class status for their households.

The reports call for attention to key areas for the country’s education, competitiveness, and jobs agenda. Among the solutions they offer.

First, a transition into more productive employment requires more skills. Nigeria needs to improve basic skills levels. Some 30 percent of youth have not completed more than primary education. Beyond basic skills, better policies and programs would improve access and market relevance of technical vocational education and training. Better job market information and facilitation would strengthen job accreditation and certification and expand opportunities for school-to-work transition. At the same time, informal short programs could help existing workers upgrade skills and become more employable.

Second, the private sector generates employment but firm growth is too small to absorb a large number of Nigerians. About 4 million microenterprises are capable of generating wage jobs, indicating that the informal sector should not be overlooked in development strategies. The formal sector appears to have an even greater potential to grow and generate employment but is limited by low productivity especially in northern Nigeria. The biggest gains to productivity would come from reducing crime, improving access to credit, reducing losses due to power outages, and increasing use of the Internet.

Third, a focus on agriculture is critical, as it will remain the largest employer for the foreseeable future. But there is a disconnect. Agriculture contributed 22 percent to GDP in 2012, but employed half of the working population. Raising agricultural productivity – incorporating small farmers in value chains, increasing access to markets, inputs, and technology would both help raise income opportunities for small holder farmers and simultaneously tap into the significant potential for domestic agriculture and agribusinesses in Nigeria.

Fourth, the reports advocate programmes that reduce income volatility over the short term. Safety nets are needed to prevent people from falling into poverty and to protect economic development over the longer term. A coherent framework and institutional set-up for social safety nets is needed.
Finally, according to the report, efforts to identify appropriate employment policies must be based on reliable data and rigorous analysis. Insufficient and poor quality data is still a constraint in monitoring jobs in Africa’s most populous country.

Under the new proposal titled, “Strategic Framework & Implementation Plan for Job Creation & Youth Employment in Nigeria,” more than three million jobs would be created in the country within three years, starting in 2016, especially in Technology, Wholesale & Retail, Construction and Agro-allied sectors of the Nigerian economy.”

Vice president Yemi Osinbajo explained that 700,000 private sector jobs, the majority of which are expected in the Agro-allied sector are expected to be created in the year under the initiative are said to be besides the 500,000 teaching jobs for unemployed graduates planned by the Buhari administration.

The presidency had set job creation as the central focus of government policy when he instructed that policy planning must address the question, “how many jobs would the policy create?”

Even though job creation might be “painfully slow”, Osinbajo assured Nigerians that the Buhari presidency was addressing the constraints that businesses face including regulatory and institutional delays.

While noting that government and the private sector only need to work together and get it right this time, the vice president seems to hit the nail on the head: ‘’we just need to get it right.”

Meanwhile, corruption, epileptic electric power supply, poor quality of education, lack of skills, negligence of agriculture and other available natural resources and other factors have been held responsible for the steady rise of unemployment in the country.

Nigeria ranks among the most corrupt country in the world. With corruption as the most serious cause of unemployment, analysts say corruption makes the government to spend less on the welfare of the citizens of the country

In terms of poor quality of education, from 2008 to 2012, over half of unemployed youth did not have an education past primary school. This particular group has consistently accounted for over 50 percent of all unemployed youth.

However, according to the Nigerian Institute of Social and Economic Reseach [NISER], graduates of tertiary institutions also seem to be badly hit by unemployment too—making up about 20 percent of youth unemployment [with women accounting for more than 50 per cent of unemployed youth] and often remaining unemployed for upward of five years after graduation.

There is a need for the present government to take serious and follow up the new project.

Since the day of Structural Adjustment Policy [SAP], different programs have been introduced by various administrations over time to address youth unemployment,

Successive civilian administrations have tried to refocus unemployment programs, discontinuing many of the old programs, restructuring some of them and creating new ones.

Consequently, certain institutional arrangements and agencies have been established to promote employment among youth. These included the Subsidy Reinvestment and Empowerment Programme (SURE-P), the Youth Enterprise With Innovation in Nigeria (YOU-WIN) and the Osun State Youth Employment Scheme (O’YES), among others.

The SURE-P was introduced in February 2012 and focuses on management and investment of federal government savings derived from proceeds accruing from the partial removal of the subsidy on petroleum products. The SURE-P was also an effort made to provide job opportunities to graduates of tertiary institutions. It is more or less a whole range of activities and programmatic schemes, including the Graduate Internship Scheme (GIS), Community Services Scheme (CSS), Vocational Training Scheme (VTS), and Community Services, Women and Youth Empowerment (CSWYE), among others.

Unfortunately, most of these programs have been unsuccessful hence increasing unemployment. Giving reasons for this, the Nigerian Institute of Social and Economic Research [NISER] explained that training is not supplemented with loans and not targeted appropriately.

It said that youth unemployment programs have concentrated more on training than on other activities that actually provide openings for immediate employment in white-collar jobs or jobs in the small- and medium-scale industries.

This strategy has not yielded the desired results because the training is often not accompanied by soft loans, which graduating trainees could use as start-up capital in order to facilitate their quick integration into the labor market.

‘’Targeting has also presented a challenge. Often, all categories of unemployed youth are lumped together as if they are homogeneous (in terms of education, skill, capabilities, and so on.) when, in fact, there ought to be distinctions on the basis of education, experience, and willingness to learn. The lumping together of graduates of primary school with those coming out of secondary schools and/or tertiary institutions makes training not only ineffective but also less impactful’’, it said.

Weak management, complex structures and inadequate funding hinder success also make ensure that unemployment policies do not work: ‘’When you run a multiplicity of programs at the same time under a weak management structure and practice, with inadequate funding, and with several layers of authorities that sometimes bicker among themselves, there is the risk of not being focused and effective.