Stakeholders in the private sector have attributed the incapacity of the sector to create jobs, which has consequently led to an increase in the incidence of unemployment, to the challenging local business environment and poor attractiveness of the economy to foreign investment.
The National Bureau of Statistics (NBS) disclosed last Wednesday that unemployment rate for the third quarter of 2018 climbed to 23.1%, up from 18.8% recorded in the corresponding quarter of the previous year.
The absolute number of unemployed adults was 20.9 million in the third quarter of the year. Out of this figure, 11.1 million worked for less than 20 hours in a week (too small to be included among people who are employed) and the other 9.7 million did absolutely nothing, the statistics office said.
In a disclosure made by the Manufacturers Association of Nigeria (MAN), new jobs in the sector reduced by 35% in the first-six months of the year, from 9,355 and 10,257 jobs created in the first and second half of the previous year.
Experts have continued to lament over the poor state of the country’s business environment, and claim it has limited the capacity of private sectors to provide job opportunities.
Commenting on the issue, Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), stated that government had reached a juncture where it could do nothing to create jobs, and therefore need to support the private sector for job creation.
“The private sector can create jobs, but without an enabling environment, nothing can happen. The private sector is not robust and it is affecting the growth of the economy. We keep borrowing to fund projects. Foreign investors are not going into sectors that are elastic with respect to job creation,” Yusuf said.
Babatunde Ruwase, president of the Chamber, said the failure of the country to monitor its rate of population growth vis-à-vis growth of GDP might be the consequences of vital economic concerns that centre on the material wellbeing of the citizens.
“Our population is growing at a faster rate than the rate at which the economy is growing. That is one of the problems we have. We have infrastructural decay, which the government is trying to solve. Nigeria ought to be the production hub of West-Africa, but these challenges is limiting the chances,” Ruwase said.
Rafiu Raji of Macroafricaintel attributed the inability of private sector to create jobs to the challenging nature of the country’s economic environment. In his words, “Some companies say that Nigerian graduates are not sound enough. So, some vacancies remain unfilled. Even so, we have seen companies retrench staff in the banking sector, for instance. Mental jobs in sectors like construction have not been forthcoming, either. All these are results of the challenging economic environment of the country.”
Speaking further, he said, “Unless we were in a command economy, the government could not realistically hope to significantly create jobs through its social programmes. Facts remains that even when we were having above 5% GDP growth, it was not particularly job-creating”. He added that since the sectors that create jobs on a large-scale like agriculture and manufacturing are continued to be constrained by power shortages, unemployment problem may remain with us for a while.”
Nigeria business environment has continued to receive poor rating from different international agencies. Earlier in the year, the World Bank scored Nigeria -0.68 out of 2.50 in its regulatory quality index, which captures the perceptions of ability of government to formulate and implement policies and regulations that permit and promote private sector development, indicating that government policies and regulations meant to facilitate the development of the private sector are weak.
