The future of work means more opportunities; Nigeria’s first hurdle is signing the Startup Bill into law
Looking at the state of unemployment across Africa, you find a tapestry weaved with stories of despair. The continent is brimming with young people eager to work, yet jobs are becoming less available. Chances are you likely know someone of ‘job-seeking’ age, hoping to find ‘anything’ to do because ‘things are tough’. But, unfortunately, hope is not a strategy, and no amount of optimism offered to these young people can change the unemployment situation if the government does not take urgent and strategic steps.
The Nigeria Bureau of Statistics data shows that for 2021, 33.3% or 23.2 million of about 70 million people who should be working are out of work, when an acceptable level would be 4%-6%. While this is deeply concerning, the country’s underemployment rate (people who work less than 20 hours a week) is also high at 22.8% and on an upward trend.
Any casual observer can list the factors responsible for this – from the critically poor state of the economy, poor (foreign) investment across sectors, to inconsistent government policies on job creation. One may even be tempted to pin the situation on a pandemic that no one prepared for. But the priority at this time should be to address the job situation at every opportunity to avoid further complications.
Recently, ONE Campaign and more than 40 partners across the continent convened the Jobs Now Africa Coalition to look into the challenge of job creation and draw up an advocacy campaign on how the government can tackle this challenge. The campaign found that Africa needs about 15 million new decent jobs every year to harness its demographic dividend. As a result, the coalition developed the People’s Charter on Jobs in Africa, which focuses on ideas and solutions that address employment issues from the perspective of young people.
In Nigeria, around four in ten people live below the national poverty line, according to the World Bank. This highlights an urgent need for a fresh approach to tackle unemployment through policy reform.
Already, initiatives by young Nigerian entrepreneurs are starting to provide an optimistic view of what lies ahead when it comes to creating opportunities for themselves.
Start-ups are springing up and are receiving seed capital investment from foreign and local investors, like the Tony Elumelu Foundation.
These start-ups are becoming a growing source of Foreign Direct Investment in Nigeria. This way, young entrepreneurs are showing that the youth population could be the asset needed to address the issue of unemployment, by creating jobs for themselves and their peers.
The Nigerian start-up space is unarguably the largest in Africa. Not too long ago, several start-ups were each valued at $1 billion (specifically Andela – founded in 2014, Flutterwave – founded in 2016, and Opay – founded in 2018), Paystack was acquired by Stripe for $200 million, and over $1.6 billion was invested in Nigeria tech space in 2021.
Similarly, a report by Salient Advisory showed that the country was the biggest hub of innovation among focus countries, with 58% of innovators active as compared with Kenya (21%), Ghana (16%), and Uganda (5%).
Global tech giants recognise the potential of start-ups in creating jobs, growing the economy, and lifting people out of extreme poverty, and are playing their part in supporting them. For example, an initiative like the Google for Start-ups Accelerator Africa program has supported over 80 start-ups from 17 African countries over the past four years and collectively raised $112 million and created 2800 direct jobs. There is also Salient Advisory Investing in Innovation (i3)’s $7 million fund to support health-driven African start-ups, which is being done by the African arm of the World Health Organisation, the Bill and Melinda Gates Foundation, Merck Sharp & Dohme (MSD), AUDA-NEPAD, and AmerisourceBergen.
Nigeria is fast becoming a destination for tech talents. One can only imagine the opportunities if Nigeria’s operating environment were more welcoming to start-up innovations.
It is time for the government to recognise tech as a cross-cutting sector that can grow the economy and drastically reduce unemployment, and develop an economy-wide strategy that supports its growth – in Nigeria’s case, the signing of the recently passed Nigeria Start-up Bill (NSB) 2021 into law is a good starting point.
NSB is a culmination of years of collaboration between the government and start-up investors, law firms, entrepreneurs, policy advocacy groups and other stakeholders. It creates a new regulatory framework for emerging tech firms to thrive by addressing poor infrastructure, access to capital and high taxes. In addition, the Bill promotes local content and grants start-ups greater international recognition, increasing their appeal, customers, and revenue base.
The Bill establishes the start-up investment Seed Fund – a dedicated fund by the federal government for young innovators. It also recommends tax holidays for up to four years for start-ups, incentives to attract investors, the establishment of tech parks across the country, where innovators could incubate their ideas, talent development mechanism and university-industry collaboration.
President Muhammadu Buhari promised to “develop an enabling environment to turn their (young Nigerians) passions into ideas that can be supported, groomed and scaled.” It is therefore important for this crucial legislation to receive presidential assent without any delay so that implementation can begin in earnest.
Stanley Achonu is the Nigeria Country Director of The ONE Campaign and writes from Abuja.