PROBLEMS OF UNEMPLOYMENT IN NIGERIA By iyke4wit UNEMPLOYMENT, RIDICULE TO ANY NATION “Nigeria as a country is often described as a rich country majority of poor citizens where 50% of the Citizens live below poverty level. Unemployment has been a problem in Nigeria, especially since 1980, when the nation's economy took a turn for the worse as world petroleum prices tumbled, the Nigerian currency became devalued, corruption became rampant, and the population of Nigeria ballooned at a breathtaking pace. The resultant poverty has posed questions about the wisdom of conventional strategies for national development. Many decades ago, Nigeria was perceived one of the richest countries in Africa because of her great petroleum reserves and large population. Ironically, the most dominant feature of the Nigerian economy is unemployment and poverty. There is a need for a development plan that will revitalize the economy of Nigeria, and thereby provide relevant strategies for combating unemployment and poverty in Nigeria. Effective land tenure reform and provision of training in development of agriculture related industries suitable for unskilled Nigerians could make agriculture a more viable source of employment opportunities and building wealth for those citizens. Also, Governmental organizations and landowners could be encouraged to make land available to poor Nigerians on a more equitable basis for agricultural related industries, such as farming. Until such occurs, agriculture will continue to be an unviable source of employment opportunity and poverty alleviation for most Nigerians. Nigeria has sufficient land mass and labor resources to become a great location for labor-intensive industries, and thereby provide employment for the masses. Cost cognizant industries could easily be developed and located in places with the most poverty stricken people in order to take advantage of low-cost of labor and land, and as a means of economic development. Nigeria has a total land mass of 923,768 square kilometers, which comprises of 13,000 square kilometers of water and 910,768 square kilometers of land, however, the climate varies from equatorial in the south of Nigeria, to tropical in the center, and arid in northern Nigeria. This results in much of the land not being arable, and such makes the agricultural sector unappealing as a viable source of employment opportunities for Nigerians. Hence, the country is not as agriculturally blessed, as it would seem from a review of the pre-oil boom history. In addition, the estimated population of Nigeria in 2002 was 129,934,911, which makes it difficult for a significant proportion of such a large population to earn a living by farming in an area of 923,768 square kilometers. Therefore, land cultivation is not a viable means of providing economic opportunities for many Nigerians. The oil sector of Nigeria provides 20% of Gross Domestic Product, and 95% of foreign exchange earnings, and about 65% of budgetary revenues. Other industries in Nigeria include: coal, tin, palm oil, peanuts, cotton, rubber, wood, hides and skins, textiles, cement, food products, footwear, chemicals, fertilizer, printing, ceramics, an d steel, however these industries have minimal impact on the foreign exchange earnings of Nigeria, because potential for utilization of such industries has not been maximized. As an alternative to dependence on the oil sector of Nigeria to provide 20% of Gross Domestic Product and about 65% of budgetary revenues, it would seem logical that cost conscious industries should be developed and located in economically depressed areas of Nigeria to take advantage of low cost labor and land, and as a means of national economic development. The poor people in such areas would then have the opportunity to develop skills that would make them employable by industries, and this would ultimately alleviate poverty in Nigeria. Another drawback regarding utilizing agriculture as a means of providing employment opportunities for considerable number of the underprivileged Nigerians is that a great proportion of land in rural Nigeria where agriculture primarily occurs is not easily accessible or not fully utilizable because such are lineage, sacred land, privately held by large landowners, etc. In addition, land is usually loaned or rented in rural communities in Nigeria, so many poor rural residents do not own sufficient land to make farming a profitable undertaking, and do not have the opportunity to accrue capital on loaned or rented land. Governmental organizations and businesses in Nigeria are yet to invest in significant amounts in development of non-petroleum industries in Nigeria, as a strategy for economic development. In addition, many poverty stricken Nigerians lack skills, knowledge, tools, beliefs, and values to seek employment opportunities in non-petroleum industries. People who lack skills, knowledge, tools, beliefs, and values to perform financially rewarded activities are not usually employable. This results in a lack of employment opportunities, as employers tend to locate their businesses where appropriate human resources are available. The vicious cycle of poverty and unemployment therefore continues unabated. Provision of employment opportunities to the masses is a means of ensuring participation of all citizens in the national development process. Lack of employment opportunities for many Nigerians has resulted in large number of Nigerians living in poverty. In turn, poverty leads to alienation of poor people (who are often rural residents) from political-economic functioning of their society. This cycle is complete when alienation further decreases these citizens interest in developing the skills, knowledge, tools, beliefs, and values to perform financially rewarded activities. In order to eradicate unemployment and poverty in Nigeria, innovative methods need to be used to successfully tackle unemployment and poverty. In Nigeria, tackling unemployment requires development and implementation of programs that will directly benefit the poor, by restructuring sources of Nigeria's gross domestic product to significantly include variety of industries that are labor intensive, such as cottage industries. Making land available to private and public organizations to set up industries in the most economically depressed areas of Nigeria, and providing training in setting up industries (especially cottage industries) to unskilled or economically deprived Nigerians would make ownership of small scale industries a viable source of employment opportunities and building wealth for many Nigerians. In addition, businesses and governmental entities can also be encouraged via incentives to locate industries that are labor intensive in areas with the highest incidences of poverty, which will usually be the rural areas of Nigeria, as a means of providing employment opportunities to these citizens. Development of varied industries in Nigeria would diversify the country's sources of revenue, and effectively utilize the abundant labor supply of poverty stricken and unemployed Nigerians, and thereby reduce the reliance of the majority of Nigerians on oil revenue handouts. Such reliance fosters a culture of dependence on the government and institutionalizes poverty. In turn, poverty leads to alienation of poor people (who are often rural residents) from the political-economic functioning of the society. In, summary, effectively decreasing the number of Nigerians, especially rural residents living in poverty by creating varied industries in Nigeria, would revitalize the Nigerian economy by providing viable options to combat unemployment and poverty in Nigeria. Nigeria Unemployment Rate 2006-2014 | Data | Chart | Calendar | Forecast Unemployment Rate in Nigeria increased to 23.90 percent in 2011 from 21.10 percent in 2010. Unemployment Rate in Nigeria averaged 14.60 Percent from 2006 until 2011, reaching an all time high of 23.90 Percent in 2011 and a record low of 5.30 Percent in 2006. Unemployment Rate in Nigeria is reported by the National Bureau of Statistics, Nigeria. _ _ _ In the long term, effective policies to reduce the total level of unemployment need to encourage An improvement in the employability of the labour supply - so that the unemployed have the right skills to take up the available job opportunities. Policies should focus on improving the occupational mobility of labour An improvement in the incentives for people to search and then accept paid work - this may require some reforms of the tax and benefits system A sustained period of economic growth so that new jobs are being created - this requires that aggregate demand is sufficiently high for businesses to be looking to expand their workforces Improving skills and reducing occupational immobility Policies should provide the unemployed with the skills they need to find re-employment and improve the incentives to find work. Structural unemployment is the result of workers being occupationally immobile - improvements in education and training will increase the human capital of these workers, and therefore give them a better chance of taking the new jobs that become available in the economy. Reflating Aggregate Demand The government can also use macro-economic policies to increase the level of aggregate demand. These policies might involve lower interest rates or lower direct taxes. It might also encourage foreign investment into the economy from foreign multinational companies. In the diagram below we see an increase in aggregate demand leading to an expansion of aggregate supply. Because of the increase in demand for output, the demand for labour at each wage rate will grow - leading to an increase in total employment. Not every increase in demand and production has to be met by using more labour. Each year we expect to see a rise in labour productivity (more output per worker employed). And, businesses may decide to increase production by making greater use of capital inputs (machinery and technology). Benefit and Tax ReformsReducing the real value of unemployment benefits might increase the incentive to take a job - particularly if the real worth of unemployment benefits is well below the national minimum wage rate.Targeted measures are designed to help the long-term unemployed find re-employment (including the Government's "Welfare to Work Schemes" - see New Deal Employment Subsidies Government subsidies for those firms that take on the long-term unemployed will create an incentive for firms to increase the size of their workforce. Employment subsidies may also be available for overseas firms locating in the UK. Economic Growth and UnemploymentA growing economy creates jobs for people entering the labour market for the first time. And, it provides employment opportunities for people currently unemployed and looking for work . the chart above shows the level of real national output (GDP) and total employment in the economy since 1980. In both of the last two recessions (1980-81 and 1990-92), the number of people in work has fallen sharply. But a period of sustained economic growth (as experienced by the UK from 1993-2001) has led to a significant increase in employment levels. Indeed by the summer of 2001, employment in the British economy was at record levels. This has helped reduce the official measures of unemployment to a level not seen for over twenty-five years.