REDUCING UNEMPLOYMENT THROUGH INVESTMENTS BY NIGERIANS
(Over 20 years investing experience in Nigeria’s financial markets)
I read in the newspaper on 2nd April 2014 where the Vice President and Chief Operating Officer of the Multilateral Investment Guarantee Agency (MIGA) Michael Wornser stressed the need for significant investments by Nigerians in the country in order to create jobs. MIGA is the political risk insurance and credit enhancement arm of the World Bank Group.
The statement from Michael Wornser shows that the only way unemployment can be reduced in Nigeria is when Nigerians embark on massive investments and government provides the right investment climate that will make businesses thrive in the country. It is good to get foreign direct investments, but it will better when Nigerians are fully invested in strategic sectors of our economy because most of the foreign direct investments funds in Nigeria are hot moneys that can be withdrawn without notice which can lead to economic instability and job losses.
Nigeria Immigration Job Test – Unsettling rate of unemployment in Nigeria
It may not be totally possible for unemployment to be completely eradicated in Nigeria, but unemployment can be reduced when Nigerians save and invest their resources in the country. Those of us who are opportune to be employed must see investment as a social and economic responsibility, because if investors had not invested and set up businesses we would not have had the opportunity of being employed. While employees are striving to earn more certificates and promotions we must also endeavour to invest and create jobs for a minimum of two people, I currently have interests in two family businesses and other small businesses that provide jobs for over sixty people even-though I currently have a fulltime job.
The starting point is for Nigerians to embrace saving, it is from our savings and loans that we can be equipped to grab economic and investment opportunities whenever they arise. It is the money we save that will save us when financial problems emerge, it also the seed capital that can be used to establish flourishing business empires.
It saddens my heart when I see foreign owned construction companies in Lagos using foreigners for unskilled and semi-skilled labour whereas we have millions of Nigerians who can do such jobs, ministry of labour and productivity should enforce the provisions of the labour laws of the country where it was stipulated that expatriates could only be used where there are no Nigerians which could do certain jobs.
The last time some Nigerian investors in one of the GSM companies sold their shares in the company, the people who bought the shares were the Arabs, who later sold their holdings to the Indians. When the Indians finally took over the company, hundreds of Nigerians engineers and managers lost their jobs. I am sure this would not have happened if the founding Nigerian investors sold their shares to fellow Nigerians or if the Nigerian workers and management were financially buoyant and investment savvy to have opted for a Management Buyout Out which would have enabled them to save their jobs.
Nigerians must be given the right of first refusal when businesses and business assets are to be sold. A profitable logistic subsidiary and foods subsidiary of a Nigeria conglomerate was sold to South Africans in 2013, the flour mill company of Nigeria’s most successful entrepreneur was also sold to another South African firm in 2013. The new owners of these firms are gradually easing out the Nigerian workers in these companies thereby leading to an increase in unemployment in the country.
I do not know why Nigerian strategic investors in profitable companies prefer selling their holdings to foreigners; is it because Nigerians do not have the financial muscle to buy the holdings due to lack of saving and investment culture or they do not have confidence in the competence of Nigerian investors and managers to manage the businesses that were offered for sale.
When the management of UACN sold their holdings in MDS Logistics and UAC Foods to the South Africans, they should have given the existing shareholders and workers the right of first refusal if they have the interests of their shareholders and workers at heart. The companies could also have been spun-off, just the way UBA Plc spun-off UBA Capital and UBA Registrars now Africa Prudential Registrars in compliance with CBN directive on the sale of non-core subsidiaries of banks. Both UBA Capital and Africa Prudential Registrars are doing well after the spin-off closing more deals, increasing their market shares and creating more jobs for Nigerians. Dangote could have also sold his core holdings in Dangote Flours to Nigerian individual and institutional investors or merging the company with other major players in that sector rather than selling to the Tiger brands of South Africa.
Nigerians should open their eyes and see the money generating potentials in the agricultural sector; this also a sector that has the ability to create millions of jobs if properly harnessed. I will find time to write an article on investment opportunities in the agricultural sector. The two profitable companies that are listed on the agricultural sector of the Nigeria Stock Exchange have foreign core investors, these companies make billions of Naira as profits after tax, they pay billions of Naira as taxes every year and they create employments for tens of thousands of workers and farmers in Edo State. As a matter of fact these two companies create more jobs than the Edo State government. There are quite a number of other unquoted companies that are owned by the Lebanese, Greeks and Indians that are also making hundreds of millions and billions of Naira as profits. How can Nigerians become partakers of the fortunes that are being made by foreigners in this sector?
In order to be employable and relevant in the labour market Nigerians need to invest in their skills; the labour market and the economy are very dynamic, while some sectors are declining new sectors are springing up. The only way Nigerian workers can be relevant and be employable is through constant upgrading of their skills, learning of relevant entrepreneurial skills and the ability to adapt their skills to different industries.
While Nigerians are advised to be fully in charge of the economy of their country through investments in order to create jobs and wealth, Nigerian government should implement policies, enact laws, build infrastructures, have strong institutions and create conducive environment that will make Nigerian businesses and entrepreneurs to thrive.
