Addressing the Rising Youth Unemployment Rate in Nigeria
Why the Rise of Youth Unemployment in Nigeria?
Nigeria has a population of 211.4 million people, out of which the working age population is 53.9%. As defined by the National Bureau Statistics, the working age population comprises the labour force (those willing and able to work) and those not in the labour force (who are unable, unwilling or not actively seeking to work).
Our focus here is on evaluating the Nigerian labour force. With a labour force of 69.7 million Nigerians, it is alarming that the current unemployment rate in Nigeria is 33.3%; this means at least 1 in every 3 Nigerians is unemployed. It is important to note that globally, the acceptable level of unemployment is within the range of 4%-6%.
The African Union defines youth as people aged between ages 15-35. In Nigeria, the rate of youth unemployment has increased over the years with the unemployment rate of youth within the ages 15-24 increasing from 21.5% in 2016 to 53.4% in 2020 and the rate for youth aged 25-34 increasing from 12.9% in 2016 to 37.2% in 2020. In both age segments, the unemployment rate has at least doubled, over 5 years. This poses the question-’Why has the Nigerian youth unemployment rate risen rapidly over the past years?’
The answer to this can be traced to the following factors: the COVID-19 pandemic, the country’s overdependence on crude oil (which accounts for 87% of its export earnings), and the imbalance between the demand and supply for jobs in the country.
The onset of the COVID-19 pandemic worsened the economic condition in Nigeria as businesses were forced to shut down in compliance with lockdown restrictions. The reduction in economic activities led to further loss of jobs as businesses struggled to adapt to the new realities. Prior to the pandemic, the Nigerian economy had been witnessing conditions such as poor governance and enabling policies, epileptic power supply and the lack of an enabling environment for businesses to thrive. Businesses were left with no choice but to take hard decisions to ensure their continued survival. For instance, talent outsourcing company, Andela and financial institution, Ren Money downsized their workforce to remain in operation during the global pandemic. Nigerian SMEs account for 84% of employment in the country and as such, business shutdowns and disruptions further contributed to increased youth unemployment as they struggled to deal with the effects of the pandemic.
Crude Oil – Nigeria’s Achilles Heel
An over-dependence on crude oil has contributed to rising unemployment due to the unmatched attention the government has given to other sectors with a high potential for contributing to overall economic growth. In Q2 2020, crude oil exports contributed to about 80% of Nigerian exports while agriculture’s contribution was about 4%; a reflection of the government’s focus. However in terms of GDP contribution, agriculture has over the years contributed more than the oil sector as depicted below:
With such a primary focus on the oil sector, it has not provided adequate and inclusive employment opportunities for the youth due to the highly specialized skill sets required for successful operation. Such technical knowledge requires time to acquire so without specific and detailed training, the majority of the youth are robbed of the opportunity to acquire jobs in the oil sector. Agriculture on the other hand is the second highest producer of jobs in Nigeria across the chains of production and had previously provided employment for 60% of the Nigerian population.
Though the government has made many investments in the agriculture sector, the budget allocation over the years has been below the 10% agreed by African countries in the Maputo Declaration of 2003. More investment into this sector, such as financial support for farmers and the use of technology to predict weather conditions or crop quality will improve the agricultural sector outputs and enable many to employ citizens in the country.
The rise in the Nigerian population over the years has translated to an even greater rise in the youth population. This has caused an imbalance between job demand and supply as the number of jobs available is barely enough to cater to the number of new entrants in the market. For instance, data from the 2015 National Bureau Statistics Job Creation Report shows the variation with job availability and labour population growth. 427,000 jobs were created in Q3 2015, however, the Nigerian labour market had 1.9 million new entrants in the same quarter. This depicts the inadequacy of jobs to meet the population demand for employment as the growing gap between two factors increases unemployment in Nigeria. Additionally, the digital and entrepreneurial skills required for the available jobs are not possessed by Nigerian graduates due to the poor quality of formal education (curricula and teaching staff) at universities. With a lack of skill set required for specific jobs, many Nigerian youth are left unemployed as they may not meet the specifications for available jobs.
Current Actions to Reduce Youth Unemployment
Youth unemployment has plagued Nigeria for many years and the government has responded through the creation and implementation of certain policies to address unemployment since the 1980s. Some of these programmes include the National Economic and Empowerment Development Scheme (NEEDS) , Government Enterprise Empowerment Programme (GEEP),Graduate Internship Scheme (GIS), N-Power, You-Win and National Youth Investment Fund. These programmes were targeted at enabling youth through the:
- Creation of jobs
- Provision of an enabling environment for enterprises
- Provision of funds for new businesses by youth
- Access to soft loans for traders, artisans and farmers
- Training and internship within private companies for practical experience
More recently, the Nigerian government has collaborated with the United Nations Development Programme (UNDP) to develop the Nigeria Jubilee Fellowship programme set to launch soon. Thisprogramme aims to help 20,000 graduates with job search after the COVID-19 pandemic. It is a 12-month programme that offers graduates the opportunity to acquire leadership and entrepreneurial skills, a source of income and tangible experience of working in Nigeria. The implementation of such programmes is anticipated to contribute to the reduction of the current graduate unemployment rate of 40.1%. Additionally, the Federal Ministry of Youth and Sports Development led the development of the Nigerian Youth Employment Action Plan (NIYEAP) with development partners (ECOWAS, ILO and Fundación Internacional para Iberoamérica de Administración y Políticas Públicas) for the implementation tenure of 2019-2023. This programme is targeted at people aged 18-35 years with the thematic focus of: digital skills for youth, youth in the rural economy, youth entrepreneurship and self-employment. With the execution of such programmes, the government is positioning itself to gradually prevent further rise in youth unemployment.
On a state level, various projects have been developed to curtail the ravaging growth of the youth unemployment epidemic. These programmes play a part in the reduction of youth unemployment in their regions of operation. Some of these programmes are:
- Employability Support Project by the Lagos State Employment Trust Fund (LSETF) and United States African Development Programme: This programme aims to equip 15,000 Lagos residents, 3000 youth (ages 18-35 years) annually for 5 years. It commenced in 2019 and involved skills development and vocational training for a period of 4-12 weeks in key sectors of the economy. With the training, internships are offered to the beneficiaries of the programme with the hope of internships transitioning into full- time jobs upon completion.
- Foundation for Partnership Initiatives in the Niger Delta (PIND): In partnership with the NIPD based in Washington, DC, this NGO is focused on promoting economic development in the Niger Delta region through various funding, capacity building and job creation initiatives. Some of its results are the provision of agricultural and business best practices to 614,503 farmers and MSMEs, the creation of over 30,000 full-time jobs in sectors supported by PIND and access to funds by 93 local development organizations in the region.
In addition, private companies, development partners and NGOs participate in actions to aid with reducing youth unemployment. One of such NGOs is the Tony Elumelu Foundation focused on curating programmes for the support of African entrepreneurs during specific timeframes. One of its most recent programmes is the TEF-UNDP project aimed at equipping 100,000 young African entrepreneurs (with Nigeria being one of the target countries) over the next 10 years with seed capital, business training and mentoring. Concerned with employment improvement, Jobberman Nigeria conducts career fairs and employability training such as the Soft Skills programme offered free to Nigerians. A number of interventions across Nigeria and Africa have also been identified geared towards providing youth with the required technical and soft skills required for them to be worthy candidates for employment.
Future of Youth Employment in Nigeria
The recommendations for further reduction of youth unemployment will be explored across the four pillars established in the NIYEAP project, mentioned earlier. These pillars are referred to as the 4 E’s, namely: Entrepreneurship Development, Employability, Employment Creation and Equal Opportunity. Though implementation of this project has not commenced, the identified pillars serve as an effective guideline to reduce youth unemployment.
Entrepreneurship and self-employment has been identified as a probable solution for job creation in Nigeria. This is because research by the United Nations Environment Ecosystem Based Adaptation for Food Security Assembly (UNEP-EBAFOSA) states that 11 million new jobs need to be created annually to deal with unemployment in Nigeria. With the current state of the Nigerian economy, the creation of this number of jobs on a yearly basis does not seem feasible. However, with support and encouragement for entrepreneurship, jobs can be created at a fast pace across the various sectors of the Nigerian economy. Entrepreneurship provides the business owner with a source of income and the opportunity for further employment of staff as the business expands. With MSMEs generating the majority of jobs in Nigeria, adequate support is required to encourage increased entry to entrepreneurship. This support can be provided through improved access to finance, capacity training and infrastructure development.
Employability refers to the skill development of Nigerian youth to improve individual employability. This can be achieved through the restructuring of education in Nigeria, formally and informally. Formally, the curricula implemented in secondary schools and universities should be revised to include relevant topics such as digital skills, financial literacy and entrepreneurial skills across the various fields of learning. This could improve the unemployment rate of graduates as this group of individuals gain skills that are relevant and required by employers in the Nigerian labour force. In the same vein, job opportunities and creation paths exist in the informal sector and specific training of technical and vocational skills ensures that equipped youth are positioned to engage in gainful employment or create jobs as needed. A previous report by EyeCity highlights Technical and Vocational Education Training (TVET) as an effective method of education, as designed curricula meet the needs of people that engage in an array of activities such as trading, craft making and hairdressing amongst others. With the inclusion of digital and entrepreneurial skills in education design, the Nigerian youth possess the skills to serve as assets to any business with employment opportunities.
Employment creation is needed across the public and private sector. A sole reliance on entrepreneurship would not be beneficial for the rapid economic development needed for the reduction of youth unemployment. Companies and the government need to engage in the evaluation process of their value chains and national operations to identify opportunities for further job creation in the country. A major area of opportunity within this pillar is Nigerian dependence on imported goods across sectors such as food/agriculture, fashion, manufacturing, amongst others. The development of Nigerian infrastructure and its industrial economy will lead to job creation as many people will be needed to rebuild a country with a greater dependence on internal operations.
Equal opportunity is required across the various regions in Nigeria to ensure success in the entire country. Prior government unemployment policies have been criticised for a focus on urban areas and negligence of the rural areas. Therefore, with the plans, actions and methods for dealing with youth unemployment in Nigeria, all programmes should include suitability and adjustability for both the rural and urban areas. Additionally, corruption within systems of operation need to be rectified to ensure that equal opportunities are provided to all Nigerians rather than an elite few or those that possess relationships that can ascertain one’s employment.
Beyond the 4 E’s, a multi-sector collaboration is needed for action across the pillars discussed, to achieve sustained change. The key players include the Nigerian government, private sector philanthropists and the International Donor Organisations (IDOs). These players stand a better chance of achieving faster results when they provide the following in partnership:
- Funding provision and allocation: Research shows that access to finance is a major challenge for youth-led firms. The government, private sector and interested IDOs can partner on fund generation and allocation initiatives across growing sectors of the country. Such funding mechanisms would benefit entrepreneurs, youth enablers, entrepreneur support organizations, incubation centres, TVET and skill development institutions.
- Capacity building and training: The key stakeholders can engage in skills development through curricula design, training of teachers and ESOs, programme development for youth in rural and urban areas. The Nigerian government needs to ensure the sustainability of programmes as some interventions failed due to corrupt practices, bad management and policy discontinuity. For example, we had the Better Life Programme (BLP) for Rural Women which was started in September 1987 by Maryam Babangida, the programme was discontinued after a change in government. Another government intervention that shared the same fate was the People’s Bank of Nigeria (PBN), established by General Ibrahim Babangida (rtd.) in October 1989. The Bank was charged then with the responsibility of extending credit to under-privileged Nigerians who could not ordinarily access such loans from the orthodox banking system. After the General’s death, the Bank also followed suit.
- Improvement of infrastructure: Primarily, the Nigerian government at all levels should focus on the development of infrastructure in the country; namely power supply, better transport networks, eradication of corruption and less bureaucratic processes in business formation. Such an enabling environment in industries will prevent the closure of businesses who can be employers of labour and also encourage more businesses to spring up.
To sum it all up, the youth are a vital segment of the population, even more so the working population. Curtailing youth unemployment in Nigeria will benefit both the youth and the country at large as talents, skills and productivity can be applied across sectors in the country. We remain hopeful that with the combined efforts of all the players involved, the jinx of rising unemployment rate in Nigeria will surely be broken.
Jointly written with Ememobong Etim.