Chinedu Onuoha has walked the streets of Lagos, the past two years in search of a job to no avail since graduating from the University in 2011.
Unable to afford rent, Onuoha 29, still lives at home with his parents with the attendant discomfort it brings for him sometimes.
“Life is very difficult in Nigeria and if you are unemployed it is hell,” Onuoha says, adding that he has probably sent over 100 job applications, written about 20 job tests, and gone for a few interviews from 2012 till date.
“Sometimes I feel my life is just wasting away. People look down on you for being unemployed, even some of your family members. If I don’t get a job this year the plan is to move abroad.”
Finance Minister Ngozi – Okonjo Iweala acknowledged the need to set up a safety net to assist poor and unemployed citizens like Onuoha after the rebased GDP of $510 billion showed that while the country as a whole was getting richer, inequality was also growing.
Nigeria’s poverty rate of 61 percent is the highest of any country in the top 30 largest group of economies in the world by GDP size.
“Inequality has been rising,” Okonjo-Iweala said, “We have to work on building a social safety net to take care of those at the bottom of the ladder.”
The Finance Minister ability to set up such a programme may however be limited by budgetary constraints, as a new social grant system would put further strain on the country’s already slim tax base.
South Africa spends 13 percent of GDP, on social programmes including health, while the developed-world’s average, calculated by the Organisation for Economic Cooperation and Development is put at 22 percent.
Mexico spends about 7.4 percent, and South Korea, 9.3 percent.
Assuming Nigeria decided to go with the mid-range and spend an equivalent of 10 percent of GDP on a new safety-net programme, it would mean the country would need to appropriate $51 billion (N8.1 trillion) – out of its total consolidated budget (Federal and State) of about N9 trillion – to social spending alone.
The need for safety nets in the country with an unemployment rate of 24 percent is huge however.
Fifteen people died in stampedes in four Nigerian cities last month as the National Immigration Service was conducting aptitude tests to recruit new officers.
Seven people died in a crowd of about 68,000 who registered for the test on March 15 at the National Stadium in Abuja, the capital.
Five were killed in the oil capital of Port Harcourt, two in Minna in the north and one in Benin City.
Nationwide, more than 522,000 applicants paid N1,000 ($6) each to take the test for about 4,500 open job positions.
“Young people are desperate to get work,” Shamsudeen Yusuf, Programme Officer at the Centre for Democracy and Development research group, said. Nigeria has averaged growth rates of 8 percent per annum over the past decade; however the economic expansion has been unable to provide enough jobs to keep up with population growth.
The Government currently has a safety net programme using funds saved from the removal of fuel subsidy or Sure-P.
The Government says it has been able to reach over 10,000 women and children with conditional cash transfer programmes across eight states.
That is however a drop in the bucket, compared to an estimated 100 million Nigerians living below the poverty line. In South Africa, 16.5 million people receive government benefits.
The greatest obstacle to establishing a robust safety net programme for Nigeria is the low tax base.
Nigeria’s tax revenue as a percentage of GDP fell to 12 percent after the rebasing exercise, which is one of the lowest in Africa, as well as for a country of its economic size.
The Federal Government’s revenue as a percentage of GDP also fell to 4.6 percent from 8.7 percent previously.
PATRICK ATUANYA
