Unemployment And Boundless Pressures On Nigeria’s Economy
Emmanuel Ugbo is a construction worker based in Abuja. He however lost his job at the beginning of this year, following the decision of a major construction firm where he worked until December 2014, to lay off some of its staff. Ugbo was unfortunate to be one of those who the company’s retrenchment axe chopped off, not for his lack of requisite skill, but a compelling need to reduce staff strength to be able to meet up with the emoluments of the remaining ones, within the available resources.
Players in the construction industry under the auspices of Federation of Construction Industry (FOCI), recently lamented the huge debts owed its members by the government, saying as a result of the debts, some companies had already started laying off staff and more job cuts would follow, if the situation did not improve.
The situation in the construction industry is only a glimmer of what is happening in other sectors of the economy where there have been reported job cuts, following the prevailing economic situation in the country.
Like Ugbo, many young people have been thrown back into the labour market, with little or no jobs available for them.
The National Bureau of Statistics (NBS) in its latest labour statistics for the first quarter of 2015, released about a week ago, stated that unemployment rate had increased from 6.4 per cent at the end of the fourth quarter of 2014, to 7.5 per cent.
According to the NBS, the increase in the number of the unemployed by 861,110 persons or 18.43 per cent between the fourth quarter of 2014 and the first quarter of 2015 was responsible for the increase in the unemployment rate.
In the first three months of 2015, the labour force population increased to 73.4 million from 72.9 million in the fourth quarter of 2014, representing 0.69 per cent increase, the NBS further stated adding that the implication was that 504,596 economically active persons within the age bracket of 16 to 24 entered the labour market.
According to a number of analysts, it would be absolutely misleading to ask Nigerians not to worry about the current state of things in the country, especially with regards to the ever increasing level of unemployment which accounts for the country’s staggering poverty level.
While the rebasing of Nigeria’s economy has shown that she may have the highest GDP on the continent, it is still a far cry to say that the country also ranks high in terms of employment and economic equality.
With poverty levels still on the increase, which analysts say has been compounded by the recent fall of global oil price, Nigeria’s economic mainstay, there is, indeed, a reason to worry.
The sharp fall of global oil price has led to the devaluation of the naira by the Central Bank of Nigeria (CBN) and with the continuous plunging of oil price, stakeholders have raised concerns and insisted on more proactive measures in order to save the economy.
While unemployment has always remained a major national challenge, the recent and negative turn of events has led to more cases of unemployment as some oil companies, banks and a number of other corporate organisations have decided to reduce their staff strength in order to cope with the rising tides.
Abiola Michael, now a former banker, spoke to LEADERSHIP Sunday. He is also a victim of recent job cuts in the banking sector.
“A couple of other bankers and I were served a notice of job termination because our employers claimed that there was too much burden on them, and we had to be the sacrificial lambs. I don’t even know where to start from right now. It took me nearly four years after leaving school to get employed,” he lamented in frustration.
Abiola is just one of many victims of such ‘austerity measures’ by a number of organisations.
Obora Amos, a media practitioner, revealed to LEADERSHIP Sunday that there were also plans by the government to downsize its workers.
The Nigerian economy has witnessed a lot of blows lately, some of these include rising insurgency in the North, the depletion of the country’s foreign reserve and stricter foreign exchange rates, amidst reports of some investors leaving the country for other African countries such as Kenya and South Africa, among others.
A report by the NBS indicates that Nigeria’s poverty level is still high and rising as well.
The report for the year 2010 revealed that the number of Nigerians living under poverty conditions stands at about 112.5 million.
The relative poverty figure of 112.5 million, which was contained in the 2010 poverty profile report of the agency, was released in Abuja. It represents 69 per cent of the country’s total population, according to the last census figures.
The 26-page report, which provides details of poverty and income distribution across the country, put the 2004 poverty measurement rate at 54.4 per cent.
The Statistician-General of the federation, Dr. Yemi Kale, while unveiling the report, noted that the figure might increase to 71.5 per cent when the 2011 figure is computed.
“The NBS estimates that this trend may have increased further in 2011 if the potential impacts of several anti-poverty and employment generation intervention programmes are not taken into account,” he said.
With or without such statistics, which are of course very important, one can feel the burden of poverty and unemployment in virtually every state of the country.
It is very evident in the deplorable situations people are found in, with little or no access to good drinking water, high mortality rates, absence of adequate social infrastructure and dwindling purchasing power.
Reacting to the NBS statistics, an economist and a former staff of UNICEF, Tayo Adesoji, told LEADERSHIP Sunday that, “there is nothing to say other than that our country is in a pitiable condition, given the array of opportunities and resources open to her in terms of human and natural resources. In my view, this is the kind of data we should be getting from countries at war, countries undergoing periods of natural disaster and landlocked countries.”
Adesoji also spoke about the several issues pertaining to Nigeria’s GDP and the persistent case of poverty and unemployment.
“We seem to be wrong in our perception of the economy. What was done recently was rebasing the economy; the economic indices have not changed, it is wrong to give an impression that the economy improved that is why we are the largest economy in Africa.
“There is a total contrast if compared with the poverty in Nigeria, which is significant, with high economic growth rate, which the same NBS placed at 7.4 per cent. This can easily be interpreted to mean that there is inequality in wealth distribution in Nigeria. In simple terms, the wealth of the nation is in the hands of a few. It can also be interpreted to mean that most of the poverty alleviation programmes of Nigeria are not translating to the improvement of the standards of living of the people,” he added.
Adesoji further averred that Nigeria’s unemployment rate cannot be understood or solely interpreted with the recent fall in oil price alone.
“Unemployment in the country has been on a consistent rise for 10 years, using the NBS figures between 2002 and 2011. It only dropped from 13.4 per cent in 2004 and to 11.9 per cent in 2005. But from 2006, it has been on the increase, moving from 12.3 per cent in that year to 23.9 per cent in 2011,” he said.
In any case, Adesoji didn’t absolve current economic woes from the drop of oil price, when he said, “I agree with the fact that an economy whose consumption is totally dependent on imported goods will be experiencing price shocks as soon as there is any variation in the world market, which is what we are experiencing with price instability and the exchange rate fluctuations.”
Also speaking on the issue, the president, Association of Senior Staff of Banks, Insurance and Financial Institution (ASSBIFI), Comrade Sunday Salako, said the state of the country’s economy had worsened the suffering of the masses and made them to wallow in poverty.
In an interview with LEADERSHIP Sunday, the labour leader maintained that waste of resources by the government makes the poor poorer, while the rich get richer.
“The common man on the street is feeling the pain of the austerity measures because nothing is really working now. Government is just trying to make money to pay salaries and nothing is left for any infrastructural development or any other intervention in the critical sectors of the economy and this is as a result of the fall in the oil price.
“The question then is what did we do with the excess money realised from oil proceeds when the price was high? We just squandered the money and you know anything that goes up must come down and vice versa.
“If we were managing our resources prudently, it is likely we wouldn’t experience this kind of problem; all we would have had to do is to dip our hands in the excess crude account and use that as an intervention measure to augment what we have,” he stated.
Continuing, Salako emphasised, “now, we are faced with the reality that things will not be as easy as before and to worsen the situation, every effort of government is to make the rich richer and the poor poorer because if you have a few dollars, you become richer in naira wise and the average rich man who wants to do anything will use foreign currency and will pay more.”
In his reaction, the President of Trade Union Congress of Nigeria, Comrade Bobboi Bala Kaigam,a noted that the level of poverty would always increase, as the nation is not economically independent. “That is why we have 80 per cent of the population wallowing in poverty. The level of poverty would always increase because we have a nation that is not independent economically. The devaluation of naira has really affected the purchasing power of the masses and that is why they cannot afford to buy what they could, hitherto,” he pointed out
On his part, Hon. Taiwo Kolawole, said the high level of poverty among Nigerians is as a result of governments’ non-performance.
“The government has not been performing and everybody wants to come to the urban areas. We have also abandoned farming. Nigerians prefer imported goods to locally made ones. It is unfortunate that people have neglected farming,” he added.
Also speaking on the increasing rate of poverty in Nigeria, an economist, Mr. Tunde Oyediran said, “this is caused by the negative influence of economic variables which determine economic growth, such as unemployment and poor living standards.”
He pointed out that a situation where income is generated by only a few people who are working in high income-generating activities, for instance, does not augur well for citizens’ living standards generally.
He noted that the federal government has being making efforts aimed at reducing the rate of poverty, adding that some of the indicators of Nigeria’s poverty reduction were federal government’s efforts towards reducing infant and maternal mortality rates, agriculture, healthcare delivery, salaries and mass housing, among others.
For Muda Yusuf, the poverty situation is of great concern to everybody and has become a major risk to social stability and security of life and property.
“People who are in abject poverty are easily persuaded to engage in criminal activities,” he said, pointing out that there is need for government to intervene
urgently, by creating an enabling environment for businesses to thrive so that more jobs can be created.
National president of the National Association of Government Approved Freight Forwarders (NAGAFF), Chief Eugene Nweke said, “poverty is a human attribute and it cannot be completely eradicated. But the unfortunate thing about the Nigerian situation is that poverty is fasting rising and eating up the fragile middle class in the Nigerian society.”
“With increasing unemployment, people losing jobs, growing inflation and the falling naira value, poverty is fast edging up. More people belonging to the middle class are losing their jobs and failing in businesses. The falling naira value has even worsened the situation. Poverty is getting stronger and stronger by the day and there’s nothing the government can say to cover this reality.
“There are critical sectors through which the government can create jobs and reduce poverty. One of them is maritime, but the government has continued to fail in realising and making good economic use of the maritime potential of the country,” he stated.
Steps to salvage the situation
Thinking of solutions is just as vital as discussing or discovering the problems.
According to Adesoji, a number of calculated steps must be taken to redeem the state of things.
Among the solutions mentioned by Adesoji are the provision of accurate and efficient data which will guide interventions, infrastructural improvements that encourage MSMEs, educational reforms that would encourage entrepreneurship and building skills for youths, economic diversification and sustenance of policies that directly work to reduce poverty.
Another major step to be taken according to Adesoji should be “the fight against corruption. Addressing the issue of corruption will go a long way in redistributing the wealth of the country, give voice to the voiceless and give hope to the economically active population who need only little support to blossom economically.”
Yusuf on his part, said, “government should accord higher priority to investment in infrastructure to reduce the current high infrastructure deficit and moderate the cost of doing business in the economy. Quality infrastructure would improve private sector productivity and competiveness as this would boost the capacity to create new jobs. Government needs to invest more in the development of human capital, education and health of citizens.
“This is important because the quality of human capital can help to mitigate the poverty situation in the country. People who are educated and healthy would be more resourceful and therefore, contribute to wealth creation.”
0 comments:
Post a Comment