Economy, Featured
THE latest unemployment figure from the National Bureau of Statistics shows that the federal government’s target of supporting more than 4 million Nigerians since 2016 is unattainable and that the funds should be used to tackle the growing menace of unemployment and poverty which breed extremism that fuels insurgency and banditry in Nigeria.
By Goddy Ikeh
A few weeks after the National Bureau of Statistics, NBS, announced that Nigeria’s inflation rate had risen to 17.33% in February 2021 from 16.47% recorded in January, which is the highest point since April 2017, the NBS followed with another shocker that Nigeria’s unemployment rate has increased from 27.1% to 33.3% in the fourth quarter of 2020.
The announcement of the high inflation rate did not come to many Nigerians as a surprise because of the high food prices induced largely by insecurity across the country. But the unemployment figure of 33.3% could hardly be matched with daily claims of the federal and state governments of the number of jobs that were being created with their numerous empowerment programmes and the high labour intensive projects being executed by them.
According to the NBS, the new figure is 6.2% higher than 27.1% recorded in the second quarter of 2020. The report explained that the number of persons in the economically active or working-age population (15 – 64 years of age) during the reference period of the survey, the fourth quarter of 2020, was 122,049,400 and that it was 4.3% higher than the figure recorded in the second quarter of 2020, which was 116.871,186.
The breakdown of the labour report showed that the total number of people with employment stood at 46.48 million, while the underemployment rate was 15.91 million. Unlike in the economically active population, the age group that accounts for the highest number under the labour force is the 25-34 age group.
“The results of the survey indicate that the estimated number of persons in the economically active or working-age population (15 – 64 years of age) during the reference period of the survey, Q4, 2020 was 122,049,400. This is 4.3% higher than the figure recorded in Q2, 2020, which was 16,871,186. Of this number, females represent 50.49%, while males account for 49.5%,” the report said.
Reacting to the report, the opposition Peoples Democratic Party, PDP, accused the ruling All Progressives Congress, APC-led federal government of lying to Nigerians about employment and job creation. In a statement shortly after the release of the figures by the NBS, the National Publicity Secretary of the PDP, Kola Ologbondiyan, noted that the latest figure of the unemployment rate is a direct confirmation that the claims of massive job creation by the present administration are mere statistic hoax being used to deceive the people.
He alleged that the report by the NBS, that millions of able-bodied Nigerians have lost their jobs and means of livelihood while many more have become underemployed, have shown the sad situation that the government has brought the nation.
“The rise in unemployment from the alarming 27.1 percent in Q2, 2020 to 33.3 percent in Q4 2020, despite the bogus claims of the APC administration, confirms that indeed, there is no hope in sight under the Buhari Presidency and the APC.
“It is clear that the direct cause of the escalating unemployment is the incompetence, as well as the widespread corruption and treasury looting in the Buhari administration, where APC leaders are reported to have looted over N15 trillion, which should have been used to create wealth, develop our country and provide jobs for our citizens,” the statement said.
The PDP condemned the situation in which the unemployment rate among the youths within the age of 15 to 34 years had risen to 42.5 percent. It added that it was obvious that the federal government created jobs only in its alleged fake statistics, while in reality, it was taking no concrete steps to empower the hard-working citizens.
Unfortunately, the authorities and many Nigerians hardly pay attention to the informed views often expressed by experts on critical issues affecting the economy and their wellbeing. For instance, when the nation celebrated the sudden exit from recession in February, many experts warned that it was not yet ‘Uhuru’ or freedom for the economy and the nation.
The experts warned that although Nigeria’s resilient private sector helped the economy to exit recession in the fourth quarter with a growth of 0.11 percent, there were still concerns about the country’s structural problems in the form of foreign exchange pressures, relatively lower oil prices and production, subdued global demand, spiraling consumer prices, repressed purchasing power, heightened unemployment levels, weak investor confidence, worsened insecurity and social tensions.
They attributed Nigeria’s exit from recession to the non-oil sector, especially the Information and Communication (Telecommunications & Broadcasting) and other drivers such as agriculture (crop production), real estate, manufacturing (food, beverage & tobacco), mining and quarrying (quarrying and other minerals), and construction.
For the Members of the Organised Private Sector, OPS, including the Lagos Chamber of Commerce and Industry, LCCI, output contraction recorded in year 2020 further highlighted the country’s weak macroeconomic fundamentals and the persistent structural, policy and regulatory issues in the economy.
“Apart from declining growth, the economy is currently confronted with several challenges, including rising consumer prices (inflation now at 45-month high of 16.47 per cent in January 2021), weak employment level, persisting liquidity concerns in the foreign exchange market, high poverty incidence, weak investor confidence and insecurity, among others.
“These challenges, which had been part of the country’s economic narrative prior to the pandemic, were amplified by the COVID-19 induced disruptions. We, however, recommend clarity in government’s policy direction is critical in deepening investor confidence. Mobilising efforts in making the business environment more conducive for medium and small enterprises and large corporates by addressing structural bottlenecks and regulatory constraints contributing to high cost of doing business,” the director general of LCCI, Muda Yusuf, was quoted as saying by local media reports.
For Razia Khan, Chief Economist for Africa and the Middle East at Standard Chartered Bank, the fact that Nigeria had seen a recovery in non-oil GDP growth was positive. “However, the headwinds associated with the second wave of Covid-19 may still be considerable,” Bloomberg quoted Khan as saying.
In his reaction, the Lead Director, Centre for Social Justice, Eze Onyekpere, maintained that the federal government must come to terms with the fact that economic growth cannot proceed in an environment of accelerated tension, disunity, ethnic conflicts, suspicions and prevaricating political positions. “It must put its house in order and lead with the interest of all Nigerians at heart,” he said,
Onyekpere added that it would be advantageous to sustain investments in the growth drivers of the economy while striving to unlock the potentials of the other sectors so that they would contribute reasonably to revenue generation efforts. He further said on areas for improvement, the agriculture sector could contribute more to the GDP if “the full value chain approach is adopted’’. Furthermore, the issue of insecurity needs to be addressed. “The number of incidences of attacks, killings and maiming of local farmers cultivating their lands is on the rise,” he told Vanguard newspaper.
“Creating a further enabling environment for businesses to thrive would allow sectors such as the services, trade and start-ups to blossom. This would aid in addressing the problem of unemployment and provide a platform for citizens, particularly the youths, to apply themselves and contribute more meaningfully to the economy,” Onyekpere said.
In the same vein, the Professor of Economics and Public Policy, University of Uyo, Prof. Akpan Ekpo, urged the federal government to embrace developmental state economic philosophy that will concentrate on poverty reduction for the benefit of every Nigerian citizen. Prof Ekpo told ThisDay in an interview that the current economic framework of the federal government could not achieve President Muhammadu Buhari’s desired objective of lifting 100 million Nigerians out of poverty.
Ekpo, who is also the Chairman, Foundation for Economic Research and Training, said: “The trickle-down economics the country is practicing could not reduce and eradicate poverty in a record time and leapfrog the country into prosperity.
“But a developmental state economic philosophy will concentrate on poverty eradication for the benefit of us all and enable governments to perceive poverty as a priority and a development challenge and tackle it headlong and not as an appendage to development programmes.”
The former director general of the West African Institute of Financial and Economic Management said that poverty in Nigeria was getting worse due to many factors, such as, “rising unemployment, especially among youths, is a major contributing factor to poverty in recent times.”
On the part of the federal government, the Central Bank of Nigeria, CBN, said that about ₦300 billion had been disbursed to 76 manufacturing companies from the ₦1 trillion facilities set up in April last year, in a bid to mitigate the impact of the coronavirus pandemic on the sector.
Speaking during the contract signing for localisation of manufacturing of Oral B products by P&G in Nigeria, the CBN Governor, Godwin Emefiele, explained that the facility is a strategic move by the monetary and fiscal authorities towards driving recovery of the Nigerian economy, following the downturn in the 1st half of 2020, as a result of the COVID-19 pandemic.
“At the Central Bank of Nigeria, we set up a N1 trillion facilities in April 2020 for the growth and expansion of manufacturing firms in Nigeria,” he said.
“So far close to N300bn has been disbursed to 76 manufacturing firms, which would boost local manufacturing across critical sectors over the next few years. Our efforts have aided the recovery of the manufacturing sector as reflected in the Purchasing Managers Index which shows that the index on manufacturing activities rose from a low of 42.4 points in May 2020 to 48.7 points in February 2021,” he said.
“Our efforts at putting in policy measures to encourage improved production of made in Nigeria goods, is driven out of the need to create jobs and wealth for our growing population. The impact of a manufacturing plant also goes beyond its immediate environment, as it also enables the growth of SMEs that work to meet the needs of the manufacturing plants and the staff,” he stated.
Although many experts have applauded the interventions of the CBN in aiding the recovery of many industrial establishments and tackling unemployment, they have failed to see the impact of the National Social Investment Programme, SIP, of the federal government. They believe that the trillions of naira being thrown at some of the programmes such as N-power, Trader Money, Conditional Cash Transfer programme, the Government Enterprise and Empowerment Programme, and the Home Grown School Feeding Programme, could be better used to achieve the desired goals of tackling unemployment, empowering Nigerians and improving the welfare of Nigerians if more pragmatic programmes are embarked upon by the government.
According to these experts, the nation’s economy cannot sustain the “photo charity” of government with much fanfare, dole out a few currency notes in some states for some thousands when millions are in desperate need, just to be seen to be executing social investment programmes. In addition, they suggest that some of these funds can be used as “support funds” to firms that are laying off workers due to the effects of the pandemic and firms that are capable of employing many Nigerians like the firms currently engaged in electrifying the rural areas with solar energy.
– Mar. 21, 2021 @ 17:50 GMT
A.I
Tags: Central Bank of Nigeria Centre for Social Justice Eze Onyekpere Godwin Emefiele High Unemployment Rate: Changing narrative through pragmatic programmes
