Thursday, 13 August 2015

Unemployment in Nigeria

Unemployment, by default, is the difference between the labour gainfully employed at the wages and working conditions that exist, and the amount of labour available, however, Gbosi (2006) defined unemployment as a situation in which people
who are willing to work at the prevailing wage rate are unable to find jobs. This implies that not just anyone who is to be counted as part of the unemployed labour force, in order to avoid over estimation of the official rate of unemployment.
The international labour organization (ILO) defines unemployed in this manner, “the unemployed is a member of the economically active population, who are without work but available for and seeking for work, including people who have lost their jobs and those who have voluntarily left work (World Bank, 1998). The application of this definition across countries has been faulted, especially for the purpose of comparison and policy formulation, as countries characteristics are not the same in their commitment to resolving unemployment problems (Douglason et al, 2006).
The rate of unemployment in Nigeria can be attributed to a lot of factors including the depression in the 1980s and during the late 1970s. Economic downturn leads to the implementation of stabilization measures which includes restriction on exports, to increase dependency on Nigeria manufacturing enterprises and the resultant effect are mostly not positive.
The analysis by educational status in past years suggests that people who have been majority affected by unemployment are these without basic education, however today, even the educated have acute troubles getting employed.
It is impressive to note here that in 2003, Nigerian’s unemployment rate declined to the various government efforts aimed at addressing the problem through poverty alleviation programmes. This decline also pointed to an increased number of people who got engaged in the informal sector activities. They also found that education of owner of a business enterprise was a significant factor influencing efficiency. They conclude that the evidence of variations in efficiency is indicative of the need for more proactive actions to raise the level of efficiency and employment among the firms in the sample.
Employment generation has been seen as a means of alleviating poverty, increasing the level of economic activities which translate into economic growth. The situation of unemployment in Africa, Nigeria as a case study has been on increase which has resulted in increases in social vices among other negatives. Although the Nigeria government put in place policies and programmes which are meant to combat this menace, but the inadequacies of implementation and up till now these programmes have not made much impact.
According to Bloom, (2000); if Nigeria is able to overcome it challenges and collect its demographic dividend, we estimate that:
v Nigeria can obtain almost 12% increased GDP per capital over the default scenario by 2020 and more than 29% increased GDP per capita by 2030. With additional modest institutional improvement, the extra GDP per capita over the default scenario could be almost 13% by 2020 and 31% by 2030.
v With the demographic dividend, Nigeria’s economy can be 3 times larger than today in 2030, instead of only 2 times larger without the demographic dividend.
v By realizing the demographic dividend, Nigeria can lift about 5.8 million more people out of poverty by 2020 and about 31.8 million by 2030, over and above the default scenario. With institutional improvement, the number of additional people lifted out of poverty can be 34 million by 2030.
v By increasing investment in human capital as fertility rates decline, Nigeria could increases GDP by nearly 50% and sustain that gain indefinitely.
But to realize its demographic dividend, we estimate that Nigeria will need to create around 24 million new jobs in the next decade and around 50 million new jobs over 2010 – 2030. Further, the jobs will have to be productive. This will require increasing Nigeria’s human capital which cannot be achieved without strong investments in health, educations, gender parity, and institutions. In particular, the role of education is so closely tied together with health, gender parity and institutions that any specific intervention that ignores the other three aspects is very unlikely to work. Even if some benefits are realizable in the short term, they will not be sustainable (Bloom, 2010).
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