Why Employment crisis persists- NECA DG

The DG, Mr. Segun Oshinowo, in a chat with Vanguard, speaks on  Employment Csrisis in Nigeria and ways to address same.

“Nigeria is looking for a microwave solution to unemployment. That is why we are all disappointed, that in spite of what may seem to be government seriousness and sensitivity in handling the issue of unemployment, we are not getting  result”

Fundamental approach

If the reason government is borrowing is to put on ground infrastructure that will make our economy grow so that we can record higher GDP…that is good

The question we should be asking ourselves is, why are we not getting it right? We are not getting results because we are not doing the right things.  Let me repeat myself again, we are looking for a microwave solution to a problem that requires a far more robust and fundamental approach. The first thing we must realise as a country is that employment comes from meaningful  inclusive and consistent growth. Now when you look at the state of our economy particularly, in the last three to four years, we have not really posted meaningful growth. Even in time past, when Nigeria was posting an average of 6 percent and 7.5 percent Gross Domestic Product, GDP growth rate, it did not result into meaningful employment.  That was why I said earlier that what we require is sustainable and inclusive growth. Now, when we talk about sustainable inclusive growth, we  bear in mind critically  four components.

In the four key components that drive growth, take consumer expenditure. What is the level of our disposable income in this economy? When you look at the US economy as an example, you discover that the GDP growth, it is principally propelled by the consumer spending.  So, the level of the income of  your people is a key factor in determining whether you are going to have a meaningful growth.

The second factor is investment. How well have we done in attracting foreign investment into Nigerian economy? The third component is government expenditure.  When we  talk of expenditure in this regard, I will qualify the expenditure on critical infrastructure that your economy requires for growth. How consistence has our government been investing in infrastructure?   If you check the profile of government budgets in the past six to seven years, you will discover that the chunk of your budgets, has been going into recurrent expenditure rather than capital expenditure.  When you now look at the balance of trade in terms of our export, you discover that we are far more income dependent and less export  oriented. So, all of these variables that drive growth, consumer expenditure, flow of foreign investment, government expenditure, particularly on capital expenditure, and then on our balance of trade,   we have not fared well.

These are the key fundamentals we really need to look at if we are to solve this huge employment problem. We will not solve this by government rhetoric, we will not solve unemployment by creating agencies, we will not solve this unemployment by imparting skill on our youth, though it is part of it.  We will not solve by addressing the quality of our education. Now, do not get me wrong, quality of education is important, technical and vocational skills are important.  But, at the end of the day, we are going to focus on the market.

It is possible for you to give youths the best quality education and impart on them with the most contemporary technical and vocational  skills,  yet they remain unemployed if your economy is not doing well. So, these are key inputs. But you need to address the demand needs for it, has to do with posting a sustainable inclusive growth.  That is really the way forward. Education, economy: There are two issues here now.  First one has to do with functionality.  As to whether, the graduates we are churning out are in the areas of the  needs of your economy .

The second issue is whether  the number we are churning out are far more than the numbers the industries required. Because, It is possible to address the issue of functionality,  but to produce functional graduates far beyond what the economy  requires is another issue.  So, we should not mix up these two issues together.

Nevertheless, these two issues are key to us. Why are they key to us? Let us even assume that we are addressing the issue of functionality. Sustainable enterprises We are not producing these graduates for their own use,  we are producing them for the use of the economy. In which case,  it is possible for somebody to have acquired functional skill, but if the state of the economy is unhealthy, the person will not have a place to utilise the functional skill acquired. That is where the issue of promoting sustainable enterprises and creating enabling environment is extremely important  in an attempt to solve unemployment. We are beginning to see large numbers of Nigerian youths that attended the best universities abroad coming back to the country, only to join the queue of the  unemployed.

In which case, if the argument had been that universities were churning out now qualitative graduates, how would you now explain that those who have had the best education are unable to get  job? That is why I am quite convinced that the issue of unemployment goes beyond having quality graduates. Market dynamics:  If you do not get the market dynamics right,  if you do not create avenue where  wealth creation will be encouraged and businesses will thrive, you may have the best of graduates in the world,  you may have the best functional workforce,   you will still end up being unemployed. Because  the market which will provide for functional or skilled graduates is in comatose. That is the key issue in Nigeria, and if you analyse it further,  it comes down to quality choices over the years. I would give you an example. Why should a graduate of Chemical Engineering be unemployed in Nigeria,  the largest crude oil exporter in Africa? Which industries should provide jobs for graduates of Chemical Engineering , the oil and gas. But,  what have we been doing over the years? We built four refineries that are non-functional, we ended up importing petroleum products and other derivatives.

We instituted a policy that discourages investment and establishment of Industries. So, if you got it wrong in the area of your policy choices,  it will reflect in the labour market in terms of unemployment. That is one example,  we could go on and on. You are a consumption country, importing rice from Asia, meanwhile,  we have ariable land.  Graduate of agriculture. So, why should a graduate of Agriculture be unemployed? It is because of our policy choices.  If we have embraced policies that would support diversification,  backwards integration, local content, graduates of Agriculture will have no business  being unemployed,  graduates of Industrial Chemical will also have no business being unemployed.  So,  the quality and appropriateness of our policy  is a major cause of our  unemployment problems. Apart from the keys that drive growth,  we need to look at our quality choices.

At any point in time,  we need to ask ourselves the  questions,  these  choices we are about to articulate, and implement,  are they  job rich or  will  they promote employment? These questions need to be answered, else we continue creating jobs for non Nigerians.