NextierWhat Are the Causes?
Nigeria is wasting, possibly, her greatest resource. The youth. With a young population, having more than 60 percent of the population under the age of 25, youth unemployment is a major economic and social challenge. According to a report published by the International Monetary Fund, youth unemployment in emerging markets and developing economies is about 18 percent on average.[1] In Nigeria, the rate is at 34.9 percent, up from 29.7 percent in 2018. This percentage includes 2.9 million graduates and postgraduates. Although the current generation of Africans entering the labour force is the most educated ever, for many of them, there are no significant differences in their prospects for employment and earnings and those of their parents. The economic growth and development of a country is highly dependent on the youth, and so far, the Nigerian youth are far from adequately positioned to lead this charge.
Unemployment itself can be classified into different types depending on the causes. Frictional unemployment, for instance, refers to workers in-between jobs. Demand-deficient unemployment, also considered the most prominent cause, usually occurs during recessions.[2] Structural unemployment, on the other hand, occurs when the skills of certain workers are made obsolete due to changing markets or new technologies. Lastly, unemployment can be voluntary.
Now, youth unemployment in Nigeria is typically structural or demand-deficient in nature. This statement infers that the causes of youth employment have to do with the demand of workers, their supply, and the macroeconomic conditions of the country. Going further, it also means any proposed solutions must be tailored to address these three areas. This essay, however, focuses on the causes of youth unemployment in the country.
To start with, a leading cause, which will be discussed, is termed ‘jobless growth’. This phenomenon has to do with weak employment elasticity, such that employment is not very responsive to economic growth in the country.[3] Between 2000 and 2014, the Nigerian economy recorded an average annual growth of 7.6 percent. In this same period, the labour force grew at 2.9 percent, with the employment rate falling below at 1.2 percent. As a result, the unemployment rate increased from 13.1 percent in 2000 to 24.3 percent in 2014. Now, jobless growth is usually linked to a weak employment rate in the manufacturing sector, especially. It is a salient issue to address, as it contributes to poverty and social unrest in the country.
Against the backdrop of an inadequate job creation capacity, the country’s population continues to grow, and rapidly. The level of job creation in the country remains below the population growth rate. It is forecasted that Nigeria’s population will double by 2050. Also, the population of Nigerians under 25 is set to double to over 224 million by the same year. According to the World Bank (2015), to employ the country’s population between 2010 and 2030, about 40 to 50 million additional jobs would need to be created.[4] These jobs would need to be more productive and higher paid. Going by the fact that only 450,000 jobs were created in 2018 to offset the loss of 700,000 jobs in the previous year, it is clear that there is quite a distance to cover.[5]
On the supply side of this debate, education and training is an essential factor. The Nigerian educational system is impaired. The country has about 13.2 million out-of-school children, most of them being female. In 2020, 8.3 million of the total unemployed population of 21.8 million had never completed secondary school, and 3.7 million had never attended school (National Bureau of Statistics, 2020). Going further, even among graduates, 2.8 million were unemployed. This shows that there is another issue. Aside from the lack of education, the education system is not aligned with the needs of the job market. This problem results from poor teacher training and a flawed educational system, leading to the entrance of more graduates into a very saturated job market with low demand for them.
Another aspect of education and skill acquisition is Technical Vocational Education and Training. Many governments have used these institutions to reduce unemployment and improve the productivity of their economies.[6] Nigerian TVET institutions, however, face the challenges of inadequate financing, poor teacher training, deficient infrastructure, substandard ICT facilities and gender inequality.[7]
Additionally, Nigeria has a challenging business climate, making it arduous to do business in the country. Some of the reasons for this include inadequate infrastructure, widespread corruption, insecurity, non-transparent economic decision making and so on.[8] These factors discourage entrepreneurship, reduce job creation and hinder private sector development. A 2014 World Bank enterprise survey identified access to finance, electricity and corruption as the top three business environment obstacles in the country. Similarly, of 840 MSMEs surveyed in Nigeria, only 31 percent had obtained a loan from a bank or microfinance institution with most using alternative means to finance their businesses (Novelli et al., 2017). Access to finance in the country is impeded by the lack of collateral, high interest rates and complicated documentation procedures.[9] This is in addition to the fact that 36.6 million Nigerian adults, 36.8{1c02100822988c48c7b0a484ab61ac3d7f398d67c2f66594d88b2db33072d9d9} of the adult population, are financially excluded.
Another factor is pervasive corruption. Corruption in Nigeria is a multidimensional issue. In the 2019 corruption perceptions index, the country ranked 146th out of the 180 countries surveyed worldwide and came in 32nd of the 49 countries surveyed in the sub-Saharan African region. It has a devastating impact on the economy, and through the pursuance of political power for self-aggrandisement, political patronage played out in cronyism and nepotism, the youth are robbed of equal access to economic opportunities.
Furthermore, the North-South divide contributes to the incidence of youth unemployment in the country. This point speaks to the regional and social disparities between the north and south Nigeria. In terms of education, almost children in the southern zones and states enter formal education at some point, and those that are out of school are majorly dropouts. On the other hand, in northern zones and states, a significant percentage of children are not in formal school; with a large proportion opting for non-formal education Quranic schools).[10] The gender gap is also higher in the north, disproportionately affecting girls, with one girl enrolled in school for every two to three boys depending on the state.[11] These differences translate into different outcomes in the job market. For instance, the total number of unemployed women, according to the NBS (2020) is 12.2 million, in contrast to 9.5 million men.
Similarly, social and economic disparities are also evident in rural and urban areas. In the 2020 labour force survey conducted by the National Bureau of Statistics, the total number of unemployed persons in the rural areas was 14.5 million, compared to 7.2 million persons in urban areas. These disparities encourage the migration of the youth away from rural areas to the more developed urban cities in search of opportunity. These movements, however, lead to an increase in the population of urban areas, worsening the level of unemployment in addition to other unintended consequences such as a shortage of basic amenities, crime, instability and social unrest, etc. [12]
Lastly, both a cause and implication of youth unemployment, is the level of insecurity and conflict in the country. Some of these security challenges and areas of conflict include the Boko Haram insurgency, farmer-herdsmen clashes, the Niger Delta, etc. Insecurity adversely impacts employment by destabilising economic activities, encouraging migration out of conflict-ridden areas and deterring local and foreign investors. The appeal of crime is also heightened by the lack of job opportunities, leading some young people to disengage from the labour market and contribute to insecurity and conflict in the country.[13]
Youth unemployment is not only a waste of the country’s greatest assets for development but also, a failure to take advantage of the country’s demographic dividend. As thus, the federal government must take a renewed, and well-targeted multisectoral approach to ensure the Nigerian youth can access decent jobs opportunities.
