‘Challenging environment limiting private sector capacity to create jobs’
Weak capacity to attract foreign investments and challenging local business environment have been attributed as major reasons the private sector is unable to create jobs needed to stem the rise in unemployment.
Indeed, Nigeria’s unemployment rate increased from 18.8 per cent in the third quarter (Q3) of 2017 to 23.1 per cent in Q3 2018, the National Bureau of Statistics (NBS) has said.
With 20.9 million people unemployed at the end of the third quarter, the statistics bureau stated the economically active or working age population (15 – 64 years) increased from 111.1 million in Q3 2017 to 115.5million in Q3 2018.
Of the 20.9 million persons classified as unemployed as at Q3 2018, 11.1 million did some form of work but for too few hours a week (under 20 hours) to be officially classified as employed, while 9.7 million did absolutely nothing, the NBS said.
“Of the 9.7 million unemployed that did absolutely nothing as at Q3 2018, 90.1% of them or 8.77 million were reported to be unemployed and doing nothing because they were first time job seekers and have never worked before.”
Similarly, half year (H1) data from the Manufacturers Association of Nigeria (MAN), showed that new manufacturing jobs in H1 2018 declined by 35 percent and 937 jobs from 9,355 jobs created in the same half of 2017, and 10,257 jobs created in the preceding half respectively.
In a chat with The Guardian, the Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, explained that government has reached its saturation point and needs to get the private sector activated for effective job creation.
The President of the Chamber, Babatunde Ruwase, had noted that the inability of the nation to check its population growth rate alongside its gross domestic product (GDP), may be fuelling key economic concerns that border on the economic and social well-being of the Nigerians.
“Our population is growing at a rate faster than the rate the economy is growing. That is one problem that we have. We have infrastructural decay, which this government is trying to address. Nigeria is supposed to be the production hub of West Africa, but these challenges prevail and limit the chances.
“You have people without the right skills required to drive the economy; there is no power and factories are closing down or they are downsizing their production capacity,” Ruwase said.
Yusuf also noted that although investors create jobs, but without the environment to create jobs, not much can happen.
“The private sector is not robust and it is affecting the growth of the economy. We keep borrowing to finance projects. The FDIs are not going to sectors that are elastic in terms of job creation. All these need to be improved upon,” he said.
The NBS had in its Nigeria Capital Importation (Q3 2018) report disclosed that the total value of capital importation into Nigeria reduced to $2.855 billion in the quarter.
According to the bureau, the figure represents a 48.21 per cent decrease compared to Q2, and 31.12 per cent decrease compared to Q3 2017.