WEF: Rising youth unemployment puts Nigeria on ‘time bomb’.

Nigeria’s rising youth unemployment is now a major source of worry with the World Economic Forum (WEF) and the Lagos Business School saying the country sits on a ‘time bomb.’

Government says the situation is under control and efforts to curb joblessness will pay off in 2017. The country’s unemployment rate rose from 13.3 per cent in the second quarter of 2016 to 13.9 per cent in third quarter, according to the National Bureau of Statistics’ Unemployment/Under-employment Report released in October last year.

The rising rate of unemployment will enlarge existing risk of insecurity and militancy in major parts of the country and undermine government’s efforts at fighting insurgency in the Northeast, uprisings in the Southeast and other serious crimes in parts of the country. Past President of the Nigeria Employers Consultative Association (NECA), Mazi Sam Ohuabunwa, in agreeing with the WEF/LBS’ report, said Nigeria is experiencing insecurity largely due to joblessness and perceived marginalization. He added that unemployment rate has been rising consistently since 2014.

“The impact of unemployment is already evident, as we look at general levels of militancy in the South South, the problems with the Boko Haram and even some of the eruptions in other parts of the country, especially the IPOB and the MASSOB,” says Ohuabunwa who still sits in the NECA council. He argues that the country’s misery index has reached 50 per cent, meaning that more than half of Nigeria’s more than 180 million people “are miserable.” The Misery Index is a measure of unemployment in line with inflation rate — the average rate of increase in prices of good and services. Ohuabunwa explains that gross unemployment rate when factored with under-employment rate in the third quarter of last year for example, puts the unemployment rate at 50 per cent. “We are the third highest country with misery index, only behind Venezuela and Iraq. Recession has worsened our condition. Therefore, social stability and job creation should be at the core of our economic policy.”

But there is always the good side. Abiola Rasaq, an investment analyst with the UBA Capital, sees the challenge posed by youth unemployment differently. “It can either be positive or negative for the country,” he submits. “The rising youth unemployment reinforces the fact that Nigeria can become a manufacturing giant given the repository of labour force,” says Rasaq as he cites the productive activities of the Asian Tigers — China, Taiwan, Singapore and Malaysia, among others — with relatively cheap labour. “If we can harness and drive productivity, then it will be a win-win.”

Rasaq agrees that failure to harness “this rich human capital resource can create social menace for us. There is potential that unemployed youths can become a social force for civil unrest; we need to ensure that we make our youths productive,” said Rasaq who cited the Tony Elumelu Foundation and the Dangote Foundation as exemplary initiatives driving entrepreneurship and job creation.

The Federal Government yesterday responded to The Guardian enquiry on the WEF/LBS report as Festus Akanbi, the media aide to the Minister of Finance, Kemi Adeosun, said “government already has a lot of programmes to address unemployment this year.”

Senior Special Assistant on Media and Publicity in the office of the Vice President, Mr. Laolu Akande, also said government’s N-Power programme is already targeting unemployed graduates.

“Half a million people are being targeted but we have done 200,000. It is just for unemployed graduates. And we have already reached another 100,000 non-graduates as micro credit is being made available to young people who want to develop their businesses.”

Akande explained that the scheme is not limited to youths but they could get as much as N100, 000 business grant as part of government’s Social Investment Scheme. He also hinted of plans to create technology hubs in eight strategic centres across the country — one each in Lagos and Abuja, and the rest in the six geopolitical zones of the country.

The number of unemployed in the labour force, the NBS said, increased by 555,311 persons just as the underemployment rate rose from 19.3 per cent in second quarter to 19.7 in the third quarter.

Nigerians aged 15 to 64, who during the reference period were available and actively seeking work but were without work were categorised ‘unemployed,’ while underemployment occurs when a person works less than 40 hours, but works at least 20 hours a week. The NBS also explained that underemployment could occur when a person works full time but is engaged in an activity that underutilises his skills, time and educational qualifications.

The report stressed that addressing the “youth unemployment is not only important, but also most urgent given the link between unemployment and other social problems such as terrorism, kidnapping, armed robbery, which are unfortunately becoming more common in Nigeria.”

Joe Ajero, who leads one of the factions of the Nigeria Labour Congress (NLC), yesterday told The Guardian that the unemployment situation was a national emergency. “No one needs to tell us that this is a problem that will explode any moment from now, especially as those who are leaving school are not getting jobs,” he said. “Those who are working are not being paid salaries and those who had worked and are retired are not being paid their pensions.” Ajero called for urgent action to avert what he said could lead to civil unrest.