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Need for national job creation policy (2)

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Buhari

Buhari

In a recent development, I visited an African store in the United States were African staple foods are sold. I requested to buy corn. The seller immediately informed me this is Nigerian corn.

Upon buying the corn, my first observation was that it was labelled made in China and distributed by a Chinese company out of California. The second observation was that most agricultural products are labelled packed in Ghana.

I inquired why Nigerian product were labelled made in Ghana only to be informed it is easier to process products from Ghana where Standardization and Compliance procedures are recognized worldwide and are properly done, ensuring that products are easily processed upon arrival into the United states.

Subsequent regimes have all failed to actualize AGOA and take advantage of its job creation remedies, however, Muhammadu Buhari has the opportunity to get it right, first in 30 years.

Moreover, we are now forced to ask, what’s the essence of spending billions of Naira setting up export free processing zones, when they are never used.

Most Countries in the world with successful export free processing zones, have just one zone, why do we have multiplicity of export free zones virtually in every state with a sea port in Nigeria? Until we get it right at National planning, and ensure that all components of the state are functional and have the ability to communicate with one another, then addressing job creation may remain a campaign promise.

The outgoing government of President Good luck Jonathan budgeted billions of Naira to set up skill acquisition centers which ordinarily would have gotten the capacity to house garment factories, or used as food processing hubs for export, rather they were reduced to centers housing computer labs and left redundant? Over and over again, Nigeria has been unable to execute successful projects like the rest of the world.

How do we explain the millions of Naira spent to organize meaningless trainings and workshops by government ministries when youths are never mobilized to set up small businesses, and in the event they are mobilized, monies paid is not sufficient for trained youths to meet up basic survival demands prior to investing. If Muhammadu Buhari must succeed, then it cannot be business as usual.

A detailed program, well thought out and implemented to the letter must be pursued. BPO- India and South Africa:  Business Process Offerings commonly called BPO’s is the outsourcing of business operations and responsibilities of specific business functions to a third party provider.

It is also called back office functions such as human resources, finance and front office outsourcing. Business process offerings are largely built around an effective information technology based economy.

India commands over 63% of the offshore component of business process offerings in the world. In recent years with the advent of globalization, the mobility and internationalization of capital, information, entrepreneurship as factors of production, has led to the internationalization of labor mobility.

Nigeria may continue to get it wrong if we keep addressing unemployment as a domestic affaire. Information technology has internationalized labor and created a mobility never before seen in history.

Countries that are currently benefiting in this scheme are countries that invested in information technology networks. This explains why the bulk of customer service calls made in the United States and Canada are routed to call- centers in India.

The introduction of IT call centers in India has greatly reduced unemployment in that country. BPO’s are services that moved from first world countries to third world countries resulting to increased profit line due to the low cost of labor in developing economies.

Effective and efficient broadband internet technologies, plays a dominant role in the success of this industry. While Nigeria has more than enough broadband capacities from several submarine cables at the shores of the country, yet less than 10 percent of the total broadband capacities from the three cable operators is being utilized in a country of over 160 million people.

As Ms Funke Opeke of Main One cable recently opined in the Nigerian Guardian published august 14th, 2013, “that broadband capacities utilization remain low in Nigeria because of the high cost paid by consumers”.

Comparing Nigeria with other African Countries, Ms Opeke further opines that “Kenya and Tanzania have gone far in internet access penetration because the government of those countries built a nationwide infrastructure backbone and allowed the private sector to run it at a determined low cost and that every internet service provider has equal access to available broadband capacities.

However, in Nigeria, rather than follow the Kenya-Tanzania example, every cable company is building her own broadband infrastructure and fixing prices arbitrarily which in most cases are very high because the operators have to add the cost of building their own infrastructure backbone”.

As a business model, this is unthinkable, highly inefficient and unproductive. If Buhari administration must meet the job creation target as promised, an urgent intervention in the broadband industry is required.

The government should either nationalize broadband, reach a settlement with cable operators, or subsidize the general usage. One major problem we have with job creation in Nigeria today is that the government has not been able to figure out the link between better and affordable internet services and job creation.

The government has not been able to figure out that there’s a relationship between infrastructural development and job creation, stable power supply and job creation, maintenance of law and order and job creation, and that job creation does not operate in a vacuum, but a carefully planned and sustained socio economic milieu.

This explains the lackadaisical attitude state governments have with executing projects to completion. With better affordable internet, we can tap into the business process offerings market like India, Pakistan, and Countries of Eastern Europe.

If the Nigerian government come to realize the amount of employment that will be generated if the government takes on the financing of a nationwide infrastructure backbone and make internet and phone calls affordable, then unemployment certainly become a thing of the past in Nigeria.

While our government officials are busy scouting around the world looking for International investors to come to Nigeria, they fail to understand that when investors talk about favorable conditions of investment, one of their major concerns is the affordability and availability of internet access, other infrastructure and how it relates to their end product.

Garment/Textiles Industries: Garment factories have succeeded in Indonesia, Bangladesh, Singapore and Malaysia and accounts for over 50% of their foreign exchange earnings, accounts for mopping up over 45% of their unemployed youths into gainful employment, accounts for attracting billions of western investment dollars, short and long term into their economies, accounts for the successful execution of micro credit facilities and labor mobility to surrounding Asian economies.

The question therefore is, why can’t we adapt such a tested and proven job creation policy, considering the boom in the industry worldwide? The answer is simple: Visionless leadership and corruption.

A successful garment factory with sufficient capacity to mop up a good percentage of our teaming unemployed population requires first and foremost, the government to consider unemployment as a national security threat that requires urgent attention.

Second, the government should promote skill development in this sector, which will attract capital infusion into the industry, functional and efficient business friendly banking systems, identification of a nitch market willing and ready to bulk purchase from primary producers, production friendly markets, stable exchange rates, production friendly cost of labor in relation to profit maximization in secondary markets, identification of tertiary markets, and the development of economies of scale.

Can we meet up with these expectations? Yes we can, with the right political will. While some will be quick to point out that government cannot be involved in business at a time the rest of the world is privatizing state owned investments, the truth is that the cost implications, market fluctuations, shipping logistics, lack of support infrastructure, state compliance and standardization neglect, lack of drive from employees due to low wages to enhance profit maximization in secondary markets, makes this venture unattractive to the private sector on the short run, even though if properly executed is a promising long term investment. Bangladesh has similar characteristics like Nigeria.

They have little or no natural resources. As a matter of state policy with rising unemployment and poverty, they decided to invest in the textile industry and training their vast unemployed youths as tailors and garment makers.

Today, the textile and clothing industries provide the single source of economic growth in Bangladesh’s rapidly developing economy. By 2013 exports of textiles, clothing, and ready-made garments (RMG) accounted for 77% of Bangladesh’s total merchandise export. A job creation policy of this sort will readily work in Nigeria.

The administration of President Jonathan built some work stations called “skill development centers, with Billions of Naira in contracts, however, there’s no specific workable program on how to use these centers to reduce unemployment other than mounting a few computer work stations in a building and calling it “skill development centers”.

Skill development centers without a definite national job creation plan is a project in futility. Bangladesh with a population of about 156 million has the highest population density in the world.

This Country has a similar population like Nigeria, while 45% of their youths are actively involved in the textile employment; over 45% of Nigerian youths have no hope of ever being employed if only they are employable.

The first question any investor would ask in promoting any venture would be is there a market for the garment industry? The answer is yes. In addition, there’s a large garment industrial need in Africa and the United states currently dependent on the Asian garment industry. Let me point out here, Nigeria is notorious for failed projects.

To get this right, all component units of the state must be efficient and being able to communicate with one another. In summary, unemployment in Nigeria remains a function of failed state policies, an underfunded failed educational system that over the years has produced unskilled and unemployable graduates, coupled with a failed political class whose vision of Nigeria has been blurred, the prevalence of institutionalized corruption and a replacement of merit with sycophancy and mediocrity in all levels of government and policy execution.

All hope is not lost, as a people, so long as we can identify the problem, then there’s a solution. With the emergence of Muhammadu Buhari, the right leadership is in the offing. Recommendation for Buhari’s Administration The Incoming administration should revisit AGOA and set up institutions to moderate compliance and standardizations and in addition, expand AGOA to include more Agricultural products for which we have a comparative advantage.

The Federal Government should establish laboratories that would ensure that exportable Agricultural products under the AGOA agreements meet the required international standards.

As Osemede earlier suggested, the establishment of a functional commodity board and commodity exchanges, to moderate the demand and supply of commodities should be promoted if we must attain our expected objectives with the AGOA agreement.

The federal government should support the creation of Agricultural Cooperatives by unemployed youths and they should be provided with professionally targeted export orientation training, to enable them engage the agro export trade, taking advantage of AGOA.

This venture if funded by a well-managed micro credit program will mop up a large percentage of the unemployed population in Nigeria. The Government should convert our redundant skill acquisition centers to pilot programs to implement the garment factories.

Skilled business professionals should pilot the initial project with goals of commercialization to explore opportunities in secondary and tertiary markets globally.

Finally, government intervention is necessary in the communications industry to improve broadband capacities utilization. While I will not speculate here on the nature of this intervention, it should be noted that Nigeria pays one of the highest rate per minute in phone and broadband utilization worldwide.

If broadband accessibility remains an exclusive preserve for the rich or unlimited accessibility is not attained for a fixed affordable rate in the nearest future, then our dream of reducing unemployment may never be attained or at most will remain a campaign promise.

I hope the incoming administration will get it right this time. •Odidi is a United States-based project management consultant.


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