By Nigeria Today
Unemployment is when people are ready, able, and willing to work, but do not find work. By the International Labor Organization definition, a person is employed when they work at least 40 hours a week. The working age is regarded as between 15 and 60. Currently, 33.3% or 23.2 million of the about 70 million people who should be working in Nigeria are out of work. An acceptable level of unemployment would be 4%-6%.
WHAT IS GOING ON IN NIGERIA EDUCATION SYSTEM
Nigeria’s inability to engage a large proportion of her youth meaningfully through job creation has the potential for social dislocation. The dire unemployment situation many graduates and those with advanced education in the country face is a cause for widespread concern.
The International Labour Organization (ILO) has linked unemployment in Nigeria to the phenomenon of jobless growth, increased number of school graduates with no matching job opportunities, a moratorium on employment in many public- and private-sector institutions, and continued job losses in the manufacturing and oil sectors.
World Bank data pinpoints the percentage of unemployed Nigerians with advanced education at 13.69% in 2016, and 15.3% in 2019.
In addition, the ILO said the recent economic growth in Nigeria has not resulted in a rapid reduction of poverty or the creation of sufficient decent jobs for the young and rapidly growing labor force.
HOW MANY GRADUATES NIGERIA PRODUCE EVERY YEAR
This is worrisome as it translates to a bulging youthful, energetic unemployed population with no contribution to the economic growth of the country. Each academic year, universities and polytechnics admit close to 2 million students and produce about 600,000 graduates.
On 10 November 2020, the National Youth Service Corps mobilized 66,000 Nigerian graduates for its mandatory one-year service to the country, Vanguard Media reported. This practice has been ongoing since 22 May 1973 as an avenue for the reconciliation, reconstruction, and rebuilding of the nation after the civil war.
The status of the seemingly saturated Nigerian labor market leaves most graduates frustrated. The situation has been gradually declining over the past almost 20 years.
NIGERIA’S EMPLOYMENT SYSTEM
The percentage of unemployed people stands at 27.1 percent. The last report which was released in 2018 showed the rate at 23 percent. Apparently, within two years, the unemployment rate in Nigeria will rise by four percent.
CAUSES OF UNEMPLOYMENT IN NIGERIA
One factor is the critically poor state of the economy. The economy has not been in good shape for the past five years and first went into a recession in 2016.
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In 2020 in the wake of the COVID-19 pandemic, it plunged into another recession – its worst in four decades. It recorded a gross domestic product contraction of 3.62% in the third quarter of 2020.
There’s been a lot of uncertainty, largely due to policy inconsistencies, about where people should invest. This cuts across various economic sectors.
Since the current government came into power in 2015, there has been a lot of policy change with the “command and control” posture adopted in managing the economy. For instance, exchange rates were left fixed for the first year of the administration until the distortions in the market became chaotic before some form of flexibility was allowed in the determination of the exchange rate, following market forces. Also, land borders were arbitrarily closed to imports, despite the huge damage it could have on the country’s trade within the ECOWAS sub-region. This had a direct impact on the prices of items. These policy somersaults have caused capital flight. The political uncertainty played a role in the downward trend of markets.
The result has been job losses and the dwindling capacity to create jobs.
The poor performance of different sectors of the economy, especially the agricultural sector, has created uncertainty and unemployment. The recurring farmer-herder crisis has hurt agricultural labor and production.
Another issue is Nigeria’s weak currency, which has been bad for manufacturing. As many people only have access to foreign currency through unofficial sources, prices of raw materials for manufacturing have affected the sector and its output. Several galvanizations cannot scale or employ more people.
CAUSES OF UNEMPLOYMENT GENERALLY
Unemployment is caused by various reasons that come from both the demand side, or employer, and the supply side, or the worker.
Demand-side reductions may be caused by high-interest rates, global recession, and financial crisis. From the supply side, frictional unemployment and structural employment play a great role.
HOW WORSE HAS COVID-19 MADE THINGS?
Measures like lockdowns, social distancing, work from home, and travel restrictions significantly affected the economy. The aviation sector and related services were one of the worst hits. The entertainment sector – movies, sports, shows – was caught in the stay-home mandate. The small and medium-scale industry was also badly hit, particularly micro-businesses – those who earn on a day-to-day basis.
Even with the opening up of the economy, the effects remain. And we’re not sure COVID-19 is going away in a hurry.
RATE OF UNEMPLOYMENT IN THE UNITED STATES AND EUROPE
The rate of global unemployment in the year 2022 is estimated to be 5.7% by the International Labour Organization (ILO). ILO has estimated that nearly 205 million unemployed people would exist around the world, which is higher than the 2019 level of 187 million.
The US unemployment rate was unchanged at 3.6 percent in April of 2022, remaining the lowest since February 2020 and compared with market expectations of 3.5 percent. The number of unemployed people declined by 11 thousand to 5.941 million, while employment levels fell by 353 thousand to 158.105 million. The seasonally-adjusted national unemployment rate is measured every month in the United States. In April 2022, the national unemployment rate was at 3.6 percent. The monthly unemployment rate in the United States from April 2021 to April 2022.
In March 2022, the euro area seasonally-adjusted unemployment rate was 6.8%, down from 6.9% in February 2022 and from 8.2% in March 2021. The EU unemployment rate was 6.2% in March 2022, down from 6.3% in February 2022 and from 7.5% in March 2021.
Unemployment refers to the share of the labor force that is without work but available for and seeking employment. China’s unemployment rate for 2020 was 5.00%, a 0.4% increase from 2019. China’s unemployment rate for 2019 was 4.60%, a 0.3% increase from 2018.
HOW DID CHINA FIGHT UNEMPLOYMENT IN ITS SYSTEM
Since 1986, and especially since 1997, the central government’s policy on unemployment has focused on helping cities and towns register the unemployed and “laid-off workers” through unemployment insurance, reemployment service centers, and employment services such as training and employment assistance.
n 2020, the employment rate in China decreased to around 63.5 percent, from 65.1 percent in the previous year. China is the world’s most populous country and its rapid economic development over the past decades has profited greatly from its large labor market.
In 2020, the employment rate in China decreased to around 63.5 percent, from 65.1 percent in the previous year. China is the world’s most populous country and its rapid economic development over the past decades has profited greatly from its large labor market. While the overall working conditions for the Chinese people are improving, the actual size of the working-age population in China has been shrinking steadily in recent years. This is mainly due to the low birth rate in the country.
Economic slowdown – impact on the labor market
After decades of rapid development, the world’s second-largest economy now seems to have difficulties boosting its economy further. The GDP growth rate fell to a new record low and the number of employed people decreased for the first time in decades in 2018. Under the influence of the global economic downturn and the US-China trade war, many Chinese enterprises engaged in international trade are having tough times, which leads to a recession in China’s labor market.
WHAT CAN BE DONE TO REDUCE OR ERADICATE UNEMPLOYMENT IN NIGERIA
How can Nigeria reduce unemployment? By addressing the causative factors. The policy framework has to be more stable. The government must address insecurity so people can go about their normal business. The government must also manage the exchange rate so that imported inputs are cheaper. That will expand production and create jobs.
Nigeria must also encourage investment. There’s a very low level of deposit rates. And it is unattractive to invest even in treasury bills or other securities. The rates are low, and the inflation rate is much higher. So every day your money loses value. The infrastructure for small-scale production, including electricity supply, is poor and people have to provide their own.
The low level of infrastructure in the economy is another critical factor. For instance, farmers need to move their goods to markets. The routes that link the farms to the cities are in poor shape. The power supply is erratic and security is poor. These factors add up to a poor level of investment.
Meanwhile, the labor supply is growing. People are graduating from higher institutions, but the demand for labor is shrinking. There are not enough jobs for young people who are leaving school. People with A levels as their highest qualification had the highest rate of unemployment with 50.7%, followed by people with a first degree or higher national diploma at 40.1%.
African universities must undertake strategic collaborations, boost innovation and develop entrepreneurial initiatives, targeting the needs of students to remain relevant in the future, a higher education conference in Nigeria has been told.
