Nigeria is facing a youth unemployment crisis. This problem affects the daily lives and long-term futures of 5 to 12 million youth who are currently unable to find work to sustain their households – that’s nearly a quarter of Nigeria’s entire population.
These youth are entering the labour market unprepared with inadequate skills that the market requires, and limited access to the tools they need to create their own jobs. The majority of these youth are from rural areas but beyond geographic disparities, female youth are particularly disadvantaged when it comes to employment and economic opportunities given social norms where females are expected to shoulder domestic responsibilities.
Addressing youth unemployment should be a national priority. Here we look beyond macroeconomic indicators that reflect jobless GDP growth and propose six solutions that center on the small and medium enterprise (SME) sector, which we believe can drive inclusive growth and raise living standards.
(1) Support small and medium enterprises and protect informal workers. Simply put, there are not enough jobs – particularly formal-sector jobs – in Nigeria. Nearly 85 percent of those employed work in the informal sector, which includes small and medium businesses ranging from petty trading and personal services to informal construction, transport, money lending, manufacturing, and repairs. SMEs have potential to drive economic transformation in Nigeria and around the world, but their job creation potential is grossly unrealized. Given the primacy of Nigeria’s informal sector, job creation should emphasize entrepreneurship to provide opportunities for youth. For this to happen, the government should support SMEs with the resources they need to overcome infrastructural, trade policy, and legislation challenges. The growth of the informal sector itself is partially due to government failure – including lack of infrastructure and lack of access to finance – but it’s the government that now needs to step in to provide cushions to protect workers against income shocks and variability, and to sustain long-term employment.
(2) Match education to employers’ needs, and ensure we look outside educational institutions. Many have responded to the youth unemployment crisis by calling for better education. While education is important, the government invests N400 million a year in schooling for youth that is uncorrelated to earnings because schools aren’t teaching the skills that employers need. Youth face a high opportunity cost to staying in school rather than gaining job experience, evidenced by tertiary school students who suffer the highest unemployment rates. Young people are unprepared to make the transition from education to employment, even with the rollout of vocational education curriculum at the secondary level.
(3) Don’t focus all the attention on graduates; youth without educational qualifications have it much harder.Although the situation is dire for youth with education credentials, many youth suffering unemployment lack formal credentials altogether and are in critical need of support and training in order to find work. Existing youth-focused interventions like the National Youth Corps Scheme in Nigeria largely focus on developing and training graduates. That said, initiatives like Babban Gona and Generation Enterprise are working with a broader range of youth, including out-of-school youth and rural youth: those without degrees and certificates who have more acute barriers to employment. Unfortunately, these youth still do not have advocates and funding for entrepreneurship programs, and these programmes are often not tailored to their realities (e.g., showing them how to manoeuvre with limited access to capital and markets). Youth development and training initiatives need to create opportunities for those who need them most, which is often young men and women with limited educational backgrounds or no geographic access to job search services and employment opportunities.
(4) Develop professional networks for youth seeking jobs and standardize assessments of job candidates.Whether a candidate has the right educational qualifications or not, it can be nearly impossible to obtain a job in the formal sector. Candidates need access to the right networks and letters of support, otherwise they will exit the labour force altogether. So how do we level the playing field? As a first step we need to develop a set of candidate assessment markers to help employers better measure all candidates efficiently and effectively, so that they do not depend only on those with the right connections. A comprehensive initiative such as WAVE creates awareness among employers and quality assurance so that employers know what standard of applicant they are getting, and creates access to employer networks for the applicants. Others such as the Co-Creation HUB aim to foster connections between professionals and provide access to capital for social innovation. However, these initiatives are resource-intensive and have had trouble scaling nationally. In the longer-term, the government must play a role to develop standardized candidate assessment markers. While the government of Nigeria has already made a start through the National Board for Technical Education, the private sector must give input into and trust the markers, and educators need to teach these skills so youth are prepared and qualified for the assessment tests.
(5) Support youth-driven innovations and ensure they can tap into existing market opportunities to scale their initiatives. Lagos’ Yaba area, the “Silicon Valley of Nigeria”, has many celebrated tech and e-commerce companies, but there is little spotlighting of entrepreneurship and innovation in other areas of the country. Just as youth need assistance developing professional networks, youth-driven initiatives outside Yaba and in sectors outside tech also need to be celebrated and funded. Do youth in rural Nigeria in, say, the agriculture sector, have the platforms they need to receive the financial support and visibility necessary to scale and hire more youth down the line? Do they have the mentorship needed to improve their business know-how, to ensure their initiatives can tap into existing value chains, and to scale their businesses successfully? Youth need access to these markets, mentorship opportunities, and to a wider community of innovators – the right ecosystem for youth innovation, in a nutshell – to ensure the success and growth of their initiatives. For example,Generation Enterprise helps curb youth unemployment by linking youth to emerging entrepreneurs and larger companies. Public sector and government organizations like SMEDAN are also tasked with supporting youth entrepreneurs and may provide a strong starting point by providing adequate infrastructure – e.g., financial infrastructure, finances, market linkages – to help these businesses scale.
(6) Rethink our social perceptions toward careers and business. The role models society presents are often “suited and booted”: bankers, lawyers, pharmacists, engineers, etc. These archetypes are further upheld within society by parents, teachers, students, and community members as lucrative career options that require significant educational investment and certification. But the suit-and-tie careers are not always those with the best prospects or earning potential. We need to better understand career paths, training requirements, employment prospects and the return on investment of growing sectors like construction, hospitality, services and, to an extent, manufacturing that can all be highly lucrative businesses. Levelling the playing field for emerging sectors will require better promoting information exchange and appreciation of the range of talents and livelihoods in different career paths.
With the right business support services, finance, working markets, and access to stable talent and investment from both the private and public sectors, SMEs will be able to thrive and create new opportunities by and for youth. We urgently need to scale the above solutions to enable today’s youth to succeed. If we can do so, young people will drive inclusive growth that will raise Nigeria’s living standards across the country.
Nneka Eze
Eze is the founding partner of the Dalberg Lagos Office. Dalberg Global Development Advisors is a leading global strategy consulting firm focusing on development issues.
