Employment generation and expansion: a panacea for security challenge in Nigeria.


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Employment generation and expansion: a panacea for security challenge in Nigeria.

  1. 1. Employment generation and expansion:A panacea for security challenge in Nigeria.
  2. 2. BIOGRAPHYNAME: UKWUEGBU, ANTHONY CHIJIOKED.O.B: SEPTEMBER 13, 1992.ADDRESS: 7, SALAKO STR., IJAOLA ESTATE, LEMODE-IJOKO ROAD, AGBADO STATION, OGUN STATE.TELEPHONE: +234 818 212 0314EMAIL: CHIJISTAR@GMAIL.COMSCHOOL: UNIVERSITY OF LAGOS.Essay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  3. 3. AbstractCreating employment is vital on many levels. Politically, employment opportunities give thepopulation a stake in the peace process by providing young men and women with alternativesto violence. Economically, employment provides income to poor families, revives domesticdemand for goods and services, and stimulates overall growth. Socially, employmentpromotes social healing and improves social welfare. This essay focuses on how we cancreate and expand employment opportunities in Nigeria in order to solve Nigeria’s securitychallenges. This essay starts by giving an overview of the Nigerian employment landscapesince Independence, it then adapts Joachim Von Braun’s Employment generation chain toschematically explain the economic impact of employment creation, and finally it profferssolution on how Nigeria can create jobs for its population in order to live in a safer Nigeria.The Nigerian Employment LandscapeEmployment generation is a primary economic development goal of every industrialisingnation. More jobs generally mean more economic activities, more tax revenues for thegovernment, and less idle time. Job growth permits the expansion and improvement of publicgoods and services, leading to an improved quality of life and enhanced prospects for futureemployment growth. In addition, a vibrant job market provides an incentive for citizens tocontinue their education since the rewards for such are evident in better employmentopportunities. While an expanding job market encourages workers to upgrade their skills inorder to qualify for available higher wage jobs, sustained job growth stimulatesimprovements in the education and skills of the labour force, making the nation a moreattractive location for businesses in the future.The present employment situation in Nigeria has its roots in the country’s economicdevelopment and performance since 1960. At Independence, agriculture was the mainstay ofthe Nigerian economy, accounting for 71.7% of her total employment (Nigerian Bureau ofStatistics, 1965). Because of the booming oil industry in the seventies, our dependence onagriculture was swiftly transformed into oil dependency. Encouraged by the revenue flowfrom oil, the government started to invest in large-scale capital intensive and strategicindustries like petrochemicals, refineries, iron, steel and fertilizer processing mills. The oilboom in the 1970s and early 1980s was short-lived. Our economy began to decline followingEssay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  4. 4. the collapse of oil prices in the 1980s and the failure to promote the agricultural sector andnon-oil exports. After years of economic decline, falling per capita income, and debt crisis inthe mid-1980s, the government adopted the Structural Adjustment Programme (SAP) in 1986with the standard objectives of stabilising the economy through restoration of fiscal andmonetary discipline, and liberalising of consumer and producer prices. With SAP inoperation, unemployment soared. According to the Nigeria Bureau of Statistics, Nigeria’sunemployment rate in 2011 stands at 23.9% with GDP at $193bn in 2010. This highunemployment rate exerts a lot of strain on the social fabrics of our society. Successivegovernments have come up with different employment generation policies, but none has beenable to stem the upward climb of the unemployment rate.Employment creation and expansion is an exercise largely carried out by government andprivate entrepreneurs to initiate job or work opportunities for members of the community.Employment generation has been one of the important objectives of development planning inNigeria. The argument for employment generation and expansion is closely interlinked withthe correction of social ills. The rate of urbanization in Nigeria — about 5.3% a year — isone of the fastest in the world. Urban unemployment is estimated at about 10.8%. Ifmanufacturing and services sectors do not grow sufficiently to absorb the surge of labour, therate of urban unemployment could become unmanageable. The implication for society —poverty, crime, conflict and the maintenance of democracy — are grave. The increasedactivities of Boko Haram, Niger Delta militants, kidnappers and tribal conflicts are just a tipof the iceberg of the dangers posed by rising unemployment.Nigeria’s Unemployment RatesUnemployment is the inability of people who are able and willing to work and are within theworking age (18 – 60 years) to find a job. There are different types of unemployment namely:Structural, Cyclical, Real-Wage, Frictional, Seasonal and Residual unemployment. Structuraland Cyclical unemployment are most prevalent in Nigeria because of the skill mismatchbetween the available jobs and the quality of graduates produced by our educationalinstitutions.Essay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  5. 5. According to the Nigerian Bureau of Statistics (NBS), the aggregate unemployment rate in 2011 was 23.9%. The table below dissects the NBS unemployment data into various components, comparing 2011 unemployment rate with that of 2009. Items Urban (%) Rural (%) Composite (%)Educational Group 2009 2011 2009 2011 2009 2011 Never attended 20.6 19.0 20.0 22.8 20.1 22.4 Primary 15.1 15.5 14.7 22.7 14.8 21.5 Secondary 21.4 13.9 25.3 22.5 23.8 20.1 Post-Secondary 13.9 16.8 26.4 23.8 21.3 20.2Age Group 15 – 24 49.9 33.5 39.6 38.2 41.6 37.7 25 – 44 16.3 16.3 17.3 24.1 17.0 22.4Source: Nigerian Bureau of Statistics (March 2012).A closer observation of this unemployment table would show that unemployment risesamongst people with minimal educational qualification. These are usually people with limitedeconomic means and living from hand to mouth. To this set of people education, which cangreatly improve their employment prospects, is a luxury. As the average member of thesociety attains more educational qualification, the unemployment rate would tend to decline.In Nigeria, Unemployment is at its highest among the youths (15 – 24 years old). This agegroup is often at the end of the job queue because they lack adequate skills and experience, aswell as efficient social networks. Of all age groups, this age group is the most restive and itdoesn’t take much provocation for them to resort to violence. Worst of all are the teemingnumber of graduates who leave school annually with no job to match their skills. After somany years searching for jobs, they easily get frustrated and are most of the times thebrainchild of most of Nigeria’s insecurity challenges.With all these statistics, the most important question is how can we create and expand theemployment opportunities in Nigeria and what impact this would have on our economy.Essay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  6. 6. Consequences of UnemploymentYouth unemployment has security implications for virtually every nation, since desperationand idleness often lead young people to fall prey to criminal gangs, political violence,militancy, prostitution or internet scam. The Arab spring that swept the world in 2010 has thedisenchanted and frustrated youths at its fore. A research by the Police has shown that of thearmed militants in Nigeria - Boko Haram, Niger Delta militants, and Egbesu Boys, 40% ofthe group composition are in the 16-17year-old age group, 10% are in the 18-19 year-old agegroup, 20% in the 20-21 year-old age group and a further 20% between the ages of 20-23.Approximately, 60% of them were unemployed.In Nigeria, the lack of job prospects and the likelihood of a dissolute future for the youthshave contributed to socially deviant behaviour such as prostitution, armed robbery, suicidebombings, kidnapping for ransom, political thuggery and so on. Many youths view youthgangs as substitute families because they tend to satisfy their immediate economic and socialneeds through violence. According to the World Bank, foreign investors cite Nigeria’sinsecurity challenges as a deterrent to investing in Nigeria. Accra is preferred as a West-African Aviation hub to Lagos because of the insecurity in Nigeria. Recently, Royal DutchShell has threatened to move its administrative office out of Nigeria.Essay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  7. 7. The Employment Generation ChainThe Employment Generation Chain develop by Joachim Von Braun in 2006 schematicallyexplains the economic wide impact of employment generation and expansion programs. Theessence of employment programmes is to increase the income level in the country whilereducing social ills in the process. Employment Assets (Infrastructure Long Term benefits improvement, better landgeneration programs utilisation) Short Term benefitsShort Term Income for Technology Utilisation the Poor (Agriculture, SME) Increased access to Increased Long Term Education, Health, Productivity. Opportunities Increased security of Lives Increase in Household and properties. Income.Fig 1.1: Employment Generation chain.Source: Adapted from Von Braun (2006)These social ills — insecurity of lives and properties, increased kidnapping, bombings, theft,political thuggery, etc — not only hamper economic development, but could also lead toanarchy in a nation. Right from 1987 to present, the Federal Government of Nigeria through Essay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  8. 8. the National Directorate of Employment (NDE) has initiated various employment generationprograms like Operation Feed the Nation (1976), Youth Empowerment Scheme (2002),National Economic and Empowerment Development Strategy (2004), and many more. Butthese employment programmes have failed to achieve their aim. How then can we create jobsfor the average Nigerian? How then can we make these employment programmes work?These questions can only be answered by developing and implementing a nationalemployment program that is relevant to our socio-economic milieu.Prerequisites for successful Employment ProgramsFor any employment program to be effective in Nigeria, it needs to incorporate the followingelements: 1) The program should aim at providing marketable skills, i.e. skill acquisition. 2) The program should be able to provide start-up capital (either in form of cash or equipment). 3) The program should encourage ‘public works programmes’, i.e. labour intensive jobs. 1) Provision of Marketable skills: This involves the training and retraining of youths and the unemployed in the acquisition of vocational or entrepreneurial skills. A proper research needs to be carried out to determine the demography of people that will be more receptive to a particular skill; those who possessing the skill will give them a comparative advantage, and who would use that skill to create more employment. These vocational skills acquisition should be all embracing — the youths, rural dwellers and women; and should be flexible to accommodate societal changes and the dynamic demands of the labour market. In the past, the various levels of government especially the federal government focused mostly on technical skills churning out programs like the National Open Apprenticeship Scheme, Waste-to-Wealth and Resettlement Scheme. While these programs are good for the secondary school leavers, they don’t appeal to the bourgeoning class of graduates in Nigeria. While as undergraduates, these youths need to be sensitised on the culture of entrepreneurship — its challenges and opportunities, internship and SIWES (Student Industrial Work Experience Scheme) programs should be promoted among undergraduates. This isEssay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  9. 9. because it allows youths to gather practical skills while keeping them busy. Through SIWES and Internship opportunities, youths gain industry knowledge and market experience. Some of them can use this knowledge to set up their own firms. 2) Provision of start-up capital: The lack of capital is a major constraint on youths in starting and expanding their business. Capital could either be in the form of cheaper access to loans, formation of cooperatives, leasing, or grants. Once capital has been provided to businesses, it is very important that this capital is monitored to ensure its judicious use in the business and creation of further employment. The YouWin initiative by the Jonathan administration is a welcoming development, it aims to provide credit in the range of one million naira to ten million naira in the hands of 1,500 Nigerian businesses. 3) Labour Intensive: All economic activities in the country should be encouraged to use more of labour than capital. Labour intensive policies create more jobs for the people. Traffic controlling is a good example of how the government creates employment by emphasizing on labour intensity. It would be economically cheaper employing traffic lights, but at a greater cost of growing unemployment and increased public insecurity.Employment generation Programs and Strategies 1) Agriculturalisation: Agricultural programs like Operation Feed the Nation, Green Revolution, etc. should be promoted nationwide. The government in collaboration with the private sectors should reduce the cost of farm implements, increase access to agricultural loans, provide agricultural extension services, etc. This would encourage more people to take-up farming and in the process create more jobs in the country. Also, Corps members should be posted to large agricultural farms and institutions where for a full year they would be immersed in agricultural activities and after their NYSC, take off grants like land and capital should be provided to them to encourage them to take-up farming. If just 5% of 20,000 yearly Corps members become large scale farmers, Nigeria would not only solve its unemployment issues but become a net-exporter of agricultural products. 2) Information Computer and Technology (ICT): The Youths are the biggest proportion of the unemployed in Nigeria, (37.7% of those aged 15-24 are unemployed) and possess IT skills and thirst for innovation. They should beEssay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  10. 10. encouraged to seek self-employment in the ICT sector. IT businesses are relatively easier to kick-start as they require lesser capital. The cost of Internet should be significantly made cheaper, broadband penetration increased and ICT foundations like the Jim Ovia’ ICT Foundation should be allowed to thrive. Once these IT skills are allowed to bud, the youths will become creative and think of ways of making a living from IT. Google, Facebook and HP all with their Headquarters in Silicon Valley are typical examples of how the proliferation of IT skills generated employment for millions of Americans 3) Small and Medium Enterprises (SMEs): SMEs are regarded as the engine of economic growth and tools for promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The labour intensity of the SME sector is much higher than those of larger enterprises. The provision of reliable power supply, improved road networks and access to improved infrastructural facilities would make SMEs blossom in Nigeria. As SMEs blossom, the demand for labour increases, thus, leading to the creation and expansion of employment. 4) Public projects: Public works projects are effective ways of generating employment quickly while creating infrastructures that will benefit the society. Construction of massive infrastructural facilities like dams, bridges, roads and hospitals would create direct and indirect demand for labour and thus create jobs for the citizens in the country. 5) Manufacturing: Promotion of industrial expansion strategies is part of the strategies of creating massive employment in Nigeria. As manufacturing industries expand and increase their output, they would create a huge demand for labour which will in turn lead to higher employment rates in Nigeria. But these manufacturers would only expand their outputs when basic infrastructures like roads, power supply and water that would significantly reduce their cost of doing business is available.Employment Generation Lessons: Case StudyIndonesia and Nigeria are classic tales of two countries similar in virtually every aspect. Bothcountries are multi-ethnic and blessed with abundant human resources. Indonesia has apopulation of 248million (2012 CIA World Fact Book). Even with the fourth largestEssay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  11. 11. population in the world, Indonesia has an unemployment rate of 6.7% (CIA World FactBook, 2012) while Nigeria with its 160million population has an unemployment rate of23.9%. The reason for employment growth in Indonesia is that she did not finance industrialgrowth by squeezing agriculture. Rather, she made heavy investment in agriculture, byimproving rural infrastructures, upgrading irrigation system, and augmenting human capitalin rural areas through widespread provision of health and educational services. Also in 1986,Indonesia succeeded in massive creation of employment by promoting a labour intensiveagricultural revolution. This was later followed by a simultaneous heavy investment in allsectors of the economy. This strategy paid off as it created a massive demand for labour andled to a significant drop in sectarian violence. This consistent approach allows Indonesia toenjoy one of the lowest unemployment rates of any populous nation.Policy RecommendationWhile the three prerequisites are crucial, the employment generation policy has to implementpolicies that will minimise bureaucracy, strengthen key institutions (tax and customsadministration), improve transparency of public institutions and strengthen the legislative andjudicial branches of government. More importantly, the government has to make basicinfrastructures like good roads, reliable power supply, and constant pipe borne water, etc.available in the nation. These infrastructures would attract Nigerians to create moreemployment as their cost of doing business would fall.ConclusionEmployment generation and expansion programs require strategic plan of actions and policiesthat cannot be left to chance. In Nigeria today, a major concern of all stakeholders is how wecan generate enough employment sufficient to starve off the security challenges we are facedwith. Any employment creation initiative should have youths and women at its centre,because this demography is prone to engaging in violent misconduct and other social vicesthat undermine the security of lives and properties in Nigeria. While experience has shown usthat government can improve the lives of its citizens, lots of effort is required from theEssay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.
  12. 12. private sector to collaborate to create more jobs reduce unemployment as this would go along way in making Nigeria a safer place. ReferencesAdemola, A. (2001). Employment generation strategies for small towns. Lagos : UI Press.Aremu, M. A., & and Adeyemi, S. L. (2011). Small and Medium Enterprises as a survival strategy for Employment generation in Nigeria. Journal of Sustainable Development , 203-213.Braun, J. V. (2006). Employment for Poverty reduction and food security: Concept, Research issues and Overview. Washington DC: IFPRI Book.National Bureau of Statistics. (2009). National Manpower stock and Employment generation survey. Abuja: Nigerian Press.National Bureau of Statistics. (2012). 2011 Social Statistics in Nigeria. Abuja: National Press.Ojo, P. (1998). Meeting the challenges of rising Unemployment and Underemployment . Lagos: Pumarks Publishing.Salami, C.G. (2011). Entrepreneurship and Youth Unemployment in Nigeria: The Missing Link . Global Journal of Management and Business Research, 3-5.Torress, F. T., & Yacila, H. C. (2006). New options for generating Employment and Income in the Rural Sector. Journal of the Inter-American Institute for Cooperation on Agriculture, 35-51.United Nations Development Programme. (2009). United Nations Policy for Post-conflict employment creation, Income generation and Reintegration. Geneva: HarperCollins.Essay written and submitted by Ukwuegbu Anthony Chijioke. Chijistar@gmail.com or +234 818 212 0314 Department of Business Administration, University of Lagos.