Factors Responsible for High Rate of Unemployment in Nigeria
(Over 20 years investing experience in Nigeria’s financial markets)
This and next week, I want to take a short break from my investment discussion and touch on another very important subject – employment.
The rate of youth unemployment is quite alarming, and if something drastic is not done by the youths, government and the society at large this problem may consume us all.
The incident that occurred during the recruitment exercise of the Nigerian Immigration Service on 15th March 2014 is a national embarrassment which must not occur again. My condolence goes to the families of the deceased.
We need to ask ourselves how the problems of unemployment in Nigeria degenerated to the current level. While thinking about this over the week, I identified some of the factors which may be responsible for the high rate of youth unemployment in Nigeria.
1. LEADERSHIP PROBLEM: Past leaders of the country should have envisaged the current state of unemployment in the country and made adequate plans towards mitigating the effects. Money made during the oil boom should have been diversified into other sectors of the economy. Policies that will make small businesses to thrive and become big ought to have been initiated by past leaders of the country.
2. CORRUPTION: Although the President said corruption is not our major problem in Nigeria, but I think corruption plays a major role in the problem of unemployment that is currently experienced in Nigeria. Just recently we heard about the missing or unaccounted for $20 billion at NNPC. This is money that would have been invested in infrastructures that will aid businesses which will create job openings or building of world class heath and educational institutions.
Nigeria Immigration Job Test – Unsettling rate of unemployment in Nigeria
3. PROFLIGACY: Most of us are all guilty of this, from the student who buys on credit a phone he cannot afford, to the Minister who spends over almost $1 million every month to maintain her private jet, to the President with over 10 aircrafts in the Presidential fleet costing tax payers over $60 million dollars annually to maintain. We can imagine the numbers of businesses or jobs the money we spend excessively on irrelevant things can create.
4. WORK ETHICS: Nigerian youths need to change their attitudes to work; the easiest route to success in the workplace is hard work and having the right attitude. We need to ask our business moguls like Dangote, Adenuga etc why whenever they need young people in highly demanding areas of their business operations they usually prefer foreigners. A number of Small and Medium Enterprises owned by Nigerians now prefer employing workers from Asia in order to man critical areas of their businesses.
5. INCOMPETENT MANAGEMENT: With a competent management a small business will grow to become a great business, it will grow from 50 employees to over 5000 employees. But an incompetent management will make a great business to become a small or an extinct business. Cases abound of how incompetent management caused job losses when they killed some great businesses that were indigenised during the indigenisation policy of former President Obasanjo between 1976 and 1979.Twenty years after the businesses were indigenised most of the businesses become extinct due to incompetent management, corrupt management and lack of good corporate governance.
6. LACK OF SAVING AND INVESTMENT CULTURE: The world has a lot to learn from our Asian brothers on how they have been able to save an average of 40% of their income. No wonder they are setting up businesses and also buying up businesses all over the world.
Some of the unemployed Nigerians had jobs in the financial sectors, manufacturing sectors and service sectors, but because saving and investing for the rainy day is alien to some of us we now have a situation whereby people who had worked for 15 years or more and were laid off with severance benefits still find themselves into the labour market instead of graduating to become employers of labour.
7. LACK OF INFRASTRUCTURES: Nigeria is a consuming nation rather than a producing nation. It is when we become a producing nation that more jobs can be created. The manufacturing sectors, agricultural sectors and the construction sectors are the ones that can create more jobs that will have multiplier effects on the economy.
These sectors can only thrive and contribute more to our GDP when infrastructures like roads, railways, land, industrial estates, electricity, security, water, energy and finance are put in place.
8. EDUCATIONAL POLICY: It is unfortunate that the curricula used in our educational institutions are not in tune with the demands of the labour market. Any student who wants to be employable needs to be conversant with the current trends in their fields.
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The pedagogical approach used by our teachers and professors does not equip our students to be problem solvers and creative thinkers but merely prepares them to regurgitate facts and maybe come out with good grades.
It is good to come out with good grades and regurgitate facts, but a good problem solver and creative thinker will succeed as a job creator and will climb the corporate ladder faster.
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