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THE IMPACT OF HUMAN CAPITAL DEVELOPMENT IN EMPLOYMENT
GENERATION IN NIGERIA
Adejumo O. Oluwabunmi
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Abstract
A major development issue in Nigeria is youth unemployment, despite a plethora of
economic policies to guide labour absorption and utilisation in the country. Some major
reasons for this unemployment challenges have their origin in the rural exodus and the
emergence of the informal sectors, capital-intensive industrialisation processes, population
growth, low incomes, low productivity, infrastructural challenges, political instability and
economic problems. A quantitative analysis of the effect human capital in stimulating
employment or otherwise was assessed in Nigeria. Also, a conceptual review is made on a
tripartite overlap of unemployment challenges in Nigeria which are discussed within the
sphere of population growth, economics and politics. The study revealed that amongst all the
factors identified, the political terrain is critical in setting the employment climate to Nigeria.
Keywords: “Population”, “Employment”, “Education”, “Capital”
1. Introduction
Human capital development has been fundamentally distinguished from the traditional
concept of labour. While the former is a compass of knowledge, skills and ability to perform
labour (especially in terms of health), the latter is more of a concept within the traditional
determinants of production. Specifically, while labour can be seen as the ability to do work
which involves both physical and mental exercises, an experienced human capital will not
just work, but will produce good and efficient labour. Thus, the productivity of an ordinary
labourer cannot be compared with the agglomeration of skills, health and education (Mincer,
2005;. A major determinant of labour force of a nation is question of the size and structure of
the population, while the human capital content is a specialised type of labour with inherent
characteristics targeted for productivity and development (Romer, 2011).
The Nigerian economy at micro and macro levels have to a large extent catered for its human
capital development. This has been made evident through resource allocations to both the
health and educational sector, acquisition of skills at both the formal and informal levels, as
well as the provision health and education facilities at private and public levels. However,
despite the efforts of to advance human capital advancement, the issue of unemployment has
continuously become an issue in Nigeria (Oni, 2006). For instance, the rate of unemployment
which rose from 2% in 1970 to 6% in 1980 and to 3.5% and 11% 1990 and mid-2000s, has in
2016 risen to 24.9% (NBS, 2017).
From Figure 1, it is revealed that the human capital of the Nigeria economy via school
enrollment has been rising steadily over the years. For Instance, in1970, the enrollment ratio
1
was about 5%, while, in 1980, it stood at about 14%; in 1990, it had risen to about 23% and
by the year 2000, it had risen to 30%.
0
10
20
30
40
50
60
70
HUM
UMP
percentage
Source: Human Capital (HUM) WDI, 2011; Unemployment
(UMP) NBS, 2005 IFS, 2011
Figure 1: Trend Relationship between Human Capital and Unemployment Rate in
Nigeria, 1970-2010.
A cursory look at the unemployment trend in Nigeria showed that in 1970, unemployment
was about 2%, but by 1980, it had risen to about 6%. In 1990, It dropped to 3.5%, while in
the year 2000 and 2009, it stood at 13.1% and 19% respectively. Incidentally, except for the
mid-1990s and between 2004 and 2008, an ironical situation is observed from figure 1. The
pattern observed between the rate of unemployment and human capital development revealed
almost a similar pattern; such that on the average, a direct relationship can be drawn between
human capital growth and unemployment in Nigeria. The unemployment situation has even
become more worrisome the increasing unemployment of professionals such as accountants,
engineers, among others. According to a recent survey by Akintoye (2003), graduate
unemployment accounted for less than 1 per cent of the unemployed in 1974, but by 1984,
the proportion rose to 4 per cent for urban areas and 2.2 percent in the rural areas. A survey
by the National Bureau of Statistics (2011) indicates that between 2006 and 2011, there were
1.8 million new entrants into the active labour market per year.
This feature of the nexus between unemployment and the development of human capital in
Nigeria brings to fore issues such as: to what extent is investment in human capital
development worthwhile in Nigeria?; to what extent has education and health capital in
Nigeria advance the employment course in Nigeria?; what are the factors militating against
employment in Nigeria?; To what extent is the type of skill and knowledge acquired relevant
for productivity and development in Nigeria. It is against this issues raised, that the objectives
of this study is entrenched, which include: to examine the extent to which human capital has
informed the employment climate in Nigeria; as well as to identify the factors militating
against employment in Nigeria.
From the foregoing, the study is further divided into four sections. Section two takes an
overview of the employment situation in Nigeria vis-à-vis government efforts to advance the
2
course of human capita l development. Section three and four presents the methodology and
the methodology and the analysis for thes study; while section five concludes the study.
2. Educational Investment and Employment Climate in Nigeria
Human capital development is basic to national socio-economic progress. It is usually aimed
at improving the quality of life of the people of the country, which is obviously the goal of
economic development. Human beings are commonly faced with life’s basic needs which
include food, clothing, and shelter; while others will include access to quality health care,
good education, infrastructures and security. Amongst these basic needs, are other the need
for essentials like Health and Education. Education, like other forms of investment in human
capital, contributes immensely to the social and economic development of the nation. It is
usually expected that a well-educated populace will engender the incomes of the poorer
category in any society. This expectation is similar to what is expected if an investment in
physical capital is carried out; it obviously will enhance productive capacity and output but if
only the right manpower is in place. Previously, education was expected to raise the social
and political consciousness and to supply the manpower needed in the production in a
modern economy. As a result, secondary, technical and higher education were emphasized to
serve this purpose. However, in recent global context, education has gone beyond being seen
as a means for improving production patterns, rather it is expected to be a mechanism for
assuaging poverty through gainful employment.
The nexus between unemployment pattern and human capital development in Nigeria is the
funding pattern in Nigeria. For instance; from fig.2, the funding of education in relation to the
total budget is graphed with unemployment. In 1980, when the funding of education was
3.8%, the unemployment rate was 6.4%. By 1990, the funding of education had gone up to
7.2%, unemployment then stood at 3.5%. In the year 2000, the funding of education was
12.5%, while unemployment was 18.1%, (Adebayo and Ogunriola, 2006). The implication of
this relationship is that the funding pattern of education which is aimed at improving the
formation of human capital in Nigeria has not really fared so well as a fair inverse
relationship between funding of education and unemployment rate.
0
2
4
6
8
10
12
14
16
18
20
UNEM
Educaon
Frequencies
Source: Major Financial and social indicators, Central Bank of Nigeria (2005)
Figure 2. Relationship between Unemployment and Education in Nigeria(1980-2004)
3
When a fraction of public resources in Nigeria is set aside to enhance the human capital
formation of youths and children in Nigeria through budgetary allocation to the educational
sector, the inability to secure gainful employment to dissipate their skills into could have
implications for the Nigerian economy as a whole. For instance, the prevalence of
unemployment could lead to involuntary migration and brain drain. In a study carried out by
Stark and Fan (2007), they extended both the “harmful brain drain” literature and the
“beneficial brain drain” literature in their analysis by analyzing both the negative and the
positive impact of migration by skilled individuals in a unified framework. Similarly, they
extended the received literature on the “harmful brain drain” by showing that in the short run,
international migration can result in “educated unemployment” and over education in
developing countries, as well as a brain drain from these countries. A simulation carried out
revealed that the costs of “educated unemployment” and over education can amount to
significant losses for the individuals concerned, who may constitute a substantial proportion
of the educated individuals.
It has been identified that persistence in youth unemployment is a major contribution to
losses in human capital. In addition, the further development of human capital is proportional
to the amount of time an individual has worked. It declines when an individual is
unemployed. Particularly, the greatest challenge on youth unemployment is their use for
political and military ends. Deprived of employment opportunity and livelihood, youths are
actively mobilized by politicians and armed groups alike. Youth unemployment also has
security implications for almost every country in Africa, since desperation often leads young
people to fall prey to warlords, criminal gangs, or illegal migration syndicates (Awogbenle
and Iwumandi, 2010). This act of criminality apparently will not involve just unskilled
persons, but it will due to the rising unemployment include skilled persons. As a result, the
positivity of the human capital graduates is endowed with could soon turn negative, thereby
leading to wastage of resources and reduced productivity in Nigeria.
3. Research Methodology
3.1. Model Specification
In order to assess the role of human capital on the employment situation in Nigeria, a simple
functional relationship is assumed between unemployment and some of the factors that
determine human capital. Specifically, using non- stationary variables1, unemployment
(-.) is regressed against factors that inform human capital. These include secondary
school enrolment (/-), public investment in education (0), health capital measured in
terms of life expectancy (1//) as well as some other control variables like economic growth
(2.), Population growth (POPG), and Interest Rate (3).
Thus,
-.=(/- 0 1// 2. ..2 3 )
……………………………………….….
(1)
Taking the natural logs of these variables and introducing the expected coefficients (
4 ¿
and
intercept (
5¿
, equation (1) is re-written as:
4
-.=5+4
1
ln /-+4
2
0+4
3
1// +4
4
2.+4
5
..2+4
6
3
(2)
With the exception of 6, an inverse relationship is specified between all the variables and
-.. For instance an increase in economic growth (0) or life expectancy (1//) is
expected to reduce unemployment; hence the specified interrelationship.
In addition, all variables are specified in terms of rates, such that they are explained in
percentages.
Thus, The ARDL Model of equation 4 above is specified as follows;
7ln-.=5+∑
=1
8
417 (-.¿¿−)+∑
=0
8
427 (/- ¿¿−)+∑
=0
8
437 (0 ¿¿−)+∑
=0
8
447 (1// ¿¿ −)+∑
=0
8
457 (2.¿¿−)+∑
=0
8
467 (..2¿¿−)+∑
=0
8
477 (3 ¿¿ −)+ 58ln (/- ¿¿ −1)+59ln (0 ¿¿ −1)+510 ln (1// ¿¿−1)+510 ln (2.¿¿−1)+511 ln (..2¿¿−1)+512 ln (3 ¿¿ −1)+9:: : : : :: : : : (3)¿¿ ¿¿ ¿¿¿ ¿¿ ¿¿ ¿¿
3.2. Estimation Technique
In order to determine the role of human capital development in informing the employment
situation in Nigeria, a simple analysis is carried out on equation (3). This is by using the
Autoregressive Distributed Lag (ARDL) estimation technique is used to express the
magnitude of relationship between the variables. While using equation (2), a cointegrating
analysis will be used to examine the presence of a long-run relationship amongst the
variables. A descriptive analysis will be used to examine the possible factors that have
aggravated the unemployment situation in Nigeria. This is done by examining the political,
economic and population dimension to unemployment challenges in Nigeria.
3.3. Measurement and Sources of Variables
Table 1. Variable sources and measurement
Variables Measurement of Variables Sources of Variables
Employment Unemployment Rate WDI, 2015
School Enrolment Gross Secondary Enrolment
Ratio
WDI, 2015
Investment in Education Public investment to the
educational sector
CBN, 2015
Life Expectancy Life expectancy rate WDI, 2015
Economic Growth Gross Domestic Product
(GDP)
CBN, 2015
Population Growth Population growth WDI, 2015
Inflation Rate Inflation Rate CBN, 2015
WDI: World Development Indicators
CBN: Central Bank of Nigeria
4. Analysis of Results
4.1. Empirical Analysis
4.1.1. Auto-Regressive Distributed Lag Estimates between Unemployment
and Human Capital Development in Nigeria
This section by using some indices of human capital development examines
the role of human capital in the employment situation of Nigeria.
5
Table 2: ARDL Estimates between Human Capital and Unemployment in
Nigeria
Dependent Variable: UMP
Model selection method: Akaike info criterion (AIC)
Selected Model: ARDL(1, 1, 0, 1, 0, 0, 1)
Variable Coefficient Std. Error t-Statistic Prob.*
UMP(-1) 0.55535 0.126951 4.374522 0.0001
HUM 0.243236 0.155228 1.56696 0.127
HUM(-1) -0.322456 0.162413 -1.985404 0.0557
EDS 0.360494 0.149949 2.404106 0.0222
LHH 4.807164 2.069988 2.322315 0.0267
LHH(-1) -3.801791 2.107023 -1.804342 0.0806
GDPG 0.020503 0.04231 0.484589 0.6313
POPG -0.358717 2.262407 -0.158555 0.875
INFL -0.004309 0.020234 -0.212935 0.8327
INFL(-1) -0.036002 0.021953 -1.639948 0.1108
C-43.24026 15.8782 -2.723247 0.0104
R-squared 0.938008 Mean dependent var 7.990698
Adjusted R-
squared
0.918635 S.D. dependent var 5.818804
S.E. of regression 1.659786 Akaike info criterion 4.067418
Sum squared resid 88.15649 Schwarz
criterion
4.517958
Log likelihood -76.44949 Hannan-Quinn criter. 4.233563
F-statistic 48.41935 Durbin-Watson stat 2.153333
Prob(F-statistic) 0
Source: Author’s Computation, Using E-views 9.
The optimal lag length of the variables included in the ARDL Model was selected based on
the Akaike Info Criterion (AIC). The table below presents the result of the relationship of the
selected ARDL Model (1, 0, 1, 0, 0) using AIC, and a maximum lag of one (1).
According to Pesaran (2001), with lag of order 1, the ARDL estimates is shown in table
2. The results showed that in previous periods, at 5% level of significance, an increase in
human capital through school enrolment reduces unemployment significantly by 0.3% (t =
1.9; p < 0.05 ); but this trend reverses in the current period where an increase in school
enrolment increases unemployment in Nigeria by 0.2% (t = 1.5; p < 0.05). This result depicts
that according to literature, the expectation that increases in educational attainment will
reduce unemployment is valid, but due to some factors prevalent in developing economies
like Nigeria such as low productivity or low development of the real sector, labour does not
find placement for its training. Incidentally, other variables used to capture human capital
development such as public expenditure (t = 2.4; p < 0.05) on educational development and
life expectancy (t = 2.3; p < 0.05) revealed that in current periods, efforts to improve human
capital has only aggravated unemployment crisis significantly in Nigeria by 0.3% and 4%
respectively. Furthermore, the study revealed that population growth has not increased
unemployment in Nigeria. This is because a 1% increase in population growth has caused
unemployment to fall insignificantly by 0.5%, (t = 0.1; p < 0.05). Incidentally, an increase in
economic growth (GDP) also increased unemployment in Nigeria; although these effects
6
were insignificant (t = 0.4; p < 0.05), but it is still an indication of economic growth not
translating into development.
The inverse relationship between unemployment and inflation incidentally confirmed the
Phillips curve in Nigeria. This is because an increase in inflation rates, reduced
unemployment by 0.004% (t = 0.2 p < 0.05). Although these effects were insignificant at 5%,
however this position was true for the current and previous periods. For instance, Phillips
found a consistent inverse relationship: when unemployment was high, wages increased
slowly; when unemployment was low, wages rose rapidly. Phillips conjectured that the lower
the unemployment rate, the tighter the labour market and, therefore, the faster firms must
raise wages to attract scarce labour. At higher rates of unemployment, the pressure abated.
Phillips’s “curve” represented the average relationship between unemployment and wage
behaviour over the business cycle. It showed the rate of wage inflation that would result if a
particular level of unemployment persisted for some time. Economists soon estimated
Phillips curves for most developed economies. Most related general price inflation, rather
than wage inflation, to unemployment. Of course, the prices a company charges are closely
connected to the wages it pays.
The result from the ARDL estimate showed high level of precision and accuracy given the
statistical components; the explanatory variables in terms of their explanatory power (R2)
explained 93% variation in unemployment, with an adjusted coefficient of determination (R2)
valued at 91%. An examination of the econometric result shows that the overall fit is
averagely satisfactory and the F-statistic valued at 48.4 is significant at 5 percent level. In
addition, the Durbin-Watson Statistic of 2.1 showed that there is no autocorrelation amongst
the independent variables used to explain the employment situation in Nigeria.
4.1.2. Long-Run Analysis of the relationship between Unemployment and
Human Capital Development in Nigeria
Table 3: Long-run (Cointegration) Estimates between Human Capital and
Unemployment in Nigeria
Variable Coefficient Std. Error t-Statistic Prob.
HUM -0.35878 0.218897 -1.63901 0.111
EDS 0.661566 0.448438 1.475268 0.1499
LHH 3.177864 0.812483 3.911298 0.0004
GDPG 0.080608 0.095244 0.84633 0.4037
POPG -2.44406 5.718712 -0.42738 0.672
INFL -0.11846 0.050554 -2.34333 0.0255
C-128.459 28.81092 -4.4587 0.0001
Source: Author’s Computation, Using E-views 9
The Long-run Cointegrating Relationship is
Cointeq = UMP - (-0.36HUM + 0.66EDS + 3.18LHH + 0.08GDPG -2.44POPG -0.12INFL -128.45)
……… (4)
7
From equation (4), most variables are insignificant at 5% level except for LHH and INFL.
Also, it can be seen that most of the findings are consistent with the ARDL estimates, except
for HUM. This implies that, continuous education through school enrolment could reduce
unemployment in the long-run, but if this growth rates persist in the long-run without
commensurate stimulation of aggregate demand or real sector development, economic growth
will become a burden and will worsen unemployment problems in Nigeria.
Table 4: Diagonistic Test
Breusch-Godfrey Serial Correlation LM Test:
F-statistic 4.16351 Prob. F(2,30) 0.0254
Obs*R-squared 9.342283 Prob. Chi-
Square(2)
0.0094
Source: Author’s Computation, Using E-views 9
The Breusch-Godfrey Serial Correlation LM Test diagnostic check revealed the overall
significance of the variables in explain the model. Also, since F-statisitc is greater than 2, it
equally confirms a long-run relationship existing among the variables.
4.2. Factors Affecting the Employment Climate in Nigeria
Based on the empirical estimates, an assessment of some major factors that informs the
employment climate in Nigeria is carried out.
In order to do an assessment of the employment climate in Nigeria, a number of issues
affecting employment have been categorised into three broad sub-heads which include a
discussion
As regards the economic, population and political dimension to unemployment in Nigeria.
4.2.1. Economic Dimension of Unemployment in Nigeria
Alabi (2014) and Adekola (2015), identified discussed a number of factors that have
accounted for unemployment in Nigeria. Some of these factors are discussed in turns:
-Inflation: In recent times, the issues on recession have caused increases in inflation
which is reflected in the prices of goods and services; as well as in the incidence of
job loss amongst the working class persons; thereby aggravating the issue of
unemployment
The graph in figure 3 showed that an increase in inflation does not necessarily mean
an increase in an increase in the rate of unemployment. For instance, in the mid-1990s
where inflation rate grew at an average of 4%, the rate of unemployment grew at less
than 1%. However, since the mid 2000s, the graph showed that as inflation grew at an
average 2.5%, unemployment grew at the a similar rate.
8
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
in ump
Source: WDI, 2015
Figure 3: Growth rates of Unemployment and Inflation Rates in Nigeria
-Resource Curse: This is a situation whereby the extractive industry, and
particularly the crude oil, is the mainstay of the Nigerian economy. Hence, since the
exports-sector is driven majorly by the natural resources sector, which generate large
revenues for government; this may engender economic stagnation and instability. In
addition, this may discourage innovations, indigenous ingenuity and continuous
struggle for power to allocate national resources. These factors have led to the neglect
of the real sector in Nigeria which in turn has aggravated the unemployment situation
in Nigeria.
-Lack of Investment in Infrastructure: investments in infrastructural facilities have
been identified as incentives that attract investors at local and international level.
However, some of the dilapidated infrastructures in Nigeria such as irregular power
supply, bad roads and road networks have inhibited investments in Nigeria; thereby,
aggravating the unemployment crisis.
-Education-Skill Gap: Education in Nigeria are comparatively low. The content of the
education acquired in Nigeria are on the average not in consonance with industry and
field requirement. This is reflected such that most industries or organisations conduct
re-training process, thus, creating a considerable skills gap among youth at working
age. According to the African Development Bank, 25% of African youths are still
illiterate and despite a rise in primary and secondary school enrolment from 60% in
2000 to 77% in 2011, (ILO, 2011) , the issue of low skills levels in the workforce will
continue to be a problem. Despite the advancement in knowledge acquisition by the
younger generation, most youths have a double chance of remaining unemployed
when compared to their predecessors or parents. This is partly because of a mismatch
between their skills and what is required for available employment opportunities.
-Low Level of Opportunities created by a modern sector: Although education
creates more prospects for employment in a modern sector, especially according to
the Lewis’s theory on development (Jhingan,2013). However, the opportunities made
9
available within the modern sector in Nigeria has not incorporated the need to
advance a productive industrial sector that will promote employment opportunities.
- Low Entrepreneurial Inclination: This is equally an offshoot of low skill,
innovative and productive life-style. This is coupled with poor infrastructural facility
that can engender innovation and productivity in Nigeria.
4.2.2. The Population Dimension of Unemployment in Nigeria
While part of Africa appeared to be overpopulated, some are under-populated. This is
because, while some areas are faced with extreme hunger and population control, some other
areas require positive population increase and increased starvation (Adekola, 2015).
Similarly, in some cases, population control appears to be detrimental to economic growth.
In others, population control is crucial to economic growth. Although, Africa’s population
which is around one billion has a population density of only 33%, relative to 70% for Europe
and 87% for Asia (because It appears that while the continent covers 25% of the world's land
area, it has only about 15% of its population). However, Africa has a relatively high
population growth rate; something in the range of 4.8% per annum in 2013, up from 3.4% in
2011. If current demographic trends persist, it is projected that the African population will
reach 1.4 billion by 2025. According to UNICEF, by 2050, it is projected that one out of
every three children born in the world will be an African.
According to the United Nations report, the highest increase in new births in the world
between now and 2050 is expected to occur in Nigeria. By 2050, Nigeria's population is
projected by the United Nations to be 389 million, rivalling that of the United States at 403
million. By the end of the century, the U.N. projects that Nigeria's population would be
between 900 million and 1 billion, nearing that of China which would by then be the second
most populous country in the world after India. The reason for this is because while Nigeria's
population would continue to grow geometrically, China's population is expected to begin to
shrink by 2030.
According to these projections, by 2050, one out of every four workers in the world is likely
to be an African. This African labour force would be young and relatively cheap. Therefore,
it is to be expected that multinational companies of the West looking for cheap labour would
be inclined to move their businesses to Africa, instead of East Asia. But in the U.N. report
According to the Nigerian Development and Finance Forum (2013):
6#;#;##
6##;##
####
## /#;
;######
<# #::
For this reason, in the short-term, unchecked population growth in many an African countries
like Nigeria will have influence for social and economic development. It cannot be justified
on the simplistic basis of the need to industrialise or diversify the productive base of an
10
economy. promote rapid industrialisation through the creation of economies of scale. The
issue is still a function of the market quantity; that is, of the effective domestic demand.
Gains in “size” are more readily achieved by increasing income per head than by increasing
the number of impoverished peasants. Thus, an improvement in income per head can
improve income per capita, which will lead to effective demand and create more opportunity
give the demand of the population. . Empirically, the phenomenal increase in the population
of Nigeria could be another reason for the observed pattern in human capital and
unemployment. According to the Nigerian population censuses in 1963, the population stood
at 55,670,055; in 1991, the population figure was 88,992,290; and in 2006, the figure jumped
to 140,431,790. The increasing need for education could have caused more persons to enrol
in schools to acquire better education thereby causing a rise in the human capital pattern.
However, at the same time, in view of the population growth, if the graduate turnout has no
absorptive productive units, unemployment will equally grow. For instance, the relationship
between unemployment and population growth is illustrated. In 1980, population growth rate
was 2.7%, while the unemployment rate was 6.4%; in 1990, population growth rate was
2.1%, while unemployment rate was 3.5%. In year 2000, the population growth rate was
3.1% while the unemployment rate was 18.1. The trend analysis of the data shows that as
population grows steadily, the unemployment rate rises simultaneously but in a steady
manner.
With over 400 million Africans currently under the age of 15, this means a large proportion
of the national income in African countries is devoted to feeding, clothing and housing “non-
producers,” with a consequent proportionately less availability of funds for investment.
From the human development indices (2014), based on a number of mortality rate
information available also leads to the conclusion that life-expectancy in Africa is only 46
years. This compares unfavourably with life-expectancy in the developed market-economy
countries, which is now close to, or above, 80 years. The Project Director, Nigeria Centre for
Disease Control, Prof. Abdulsalam Nasidi, says Nigeria's life-expectancy is the lowest in
West Africa. However, this is highly debateable; especially as he goes on to say Nigeria's
life-expectancy is 47 years.
In the final analysis, the issue in Nigeria is really neither population growth nor its control.
Rather, it is economic development. “Over-population” is not a condition that is intimately
related to numbers in the abstract, without regard to land fertility and technical and economic
development. Otherwise, Africa would definitely not qualify as over-populated. Neither can
the continent really be considered as “under-populated” since there is very little evidence that
an absolute lack of manpower is holding up development anywhere.
The challenges attributed to population growth in Nigeria would disappear with reasonable
rates of economic development. As observed, economic development itself is perhaps the
one reliable means to population control. By itself, the problem of density is one of the least
crucial of demographic problems. Africa's population is not too large in relation to land area,
but to reproducible capital, research and educational facilities, the entrepreneurial class,
leadership and the available channels of economic diffusion.
4.2.3. The Political Dimension of Unemployment in Nigeria
11
Good governance and a well structured political climate will attract investors and engender
development. However, with the Nigerian economy in view, some major issues that could
affect the political settings, which can lead to development and mitigate low productivity are
discussed. Kelly (2014) identified some issues mitigating human development as well
unemployment in Nigeria. These issues are discussed in turns:
- Corruption: This has been identified as the chief cause of unemployment in Nigeria.
Massive unemployment in the continent is undoubtedly linked to the high rates of
corruption in the system. Politicians apparently do not seem to realize the corollary of
their neglect to the plight of youths. This phenomenon proves a point for the argument
that African leaders are absolutely corrupt, inept, inconsiderate and nonchalant. They
are not supportive to the concerns of youths in areas of job creation and welfare
provision. Estimates by the International Labour Organization (ILO, 2011) reveal that
in Sub-Saharan Africa unemployment affects between 15-20 percent of the work
force; and young people comprise 40 to 75 percent of the total number of the
unemployed. The corrupt attitudes of African leaders and politicians have caused
more preference for power than the necessity of job creation for the sake of nation
building. Corruption has absolutely undermined Africa’s social, economic and
political institutions and eroded the political will of the governments to create,
manage and sustain enabling job environments for their fast growing youths’
workforce. The unemployment crisis in the continent is rather a paradox difficult to
comprehend. Given Africa’s abundant natural resources unmatched anywhere in the
world, it is hard to comprehend what the Nigerian government does with local and
international earnings, given the unemployment rates in the continent which almost
surpass the unemployment rates in developed economies like Europe, America and
Australia. combined. This unemployment challenge is worrisome given the reserves
of petroleum resources in Nigeria, and trained human professionals such as medical
doctors, accountants, engineers and lawyers who migrated from into Europe end up as
labourers doing odd jobs with no correlation to their training. Thus, Corruption has
not only undermined professional excellence in Africa, it has contributed largely to
the brain drain factor.
-Loots of Public funds: Worse still, is the vicious looting of state resources go
unabated and the wealth stolen by African leaders is never invested into businesses or
industrial ventures in Africa rather, the money is laundered into foreign accounts
where no interest is yielded for the improvement of African economies.
- Government Failure: Also, the government in Nigeria have failed to articulate
policies to balance the rates of labour force that glaringly outstrips the amount of job
opportunities available. In Nigeria for instance, some university graduates have
resorted to street hawking and other menial jobs that grossly undermine their training.
The government has failed to put in place realistic strategies to reduce youth
unemployment by boosting demand for labour through creating economic conditions
that improve the environment of enterprises to do business and hire labour.
Unfortunately, a few entrepreneurs who want to do business are not encouraged with
incentives from the government.
Lack of incentives: Several Nigerians want to start up their own enterprises but
governments don’t provide any form of financial assistance or loans schemes as
incentives. Those that manage to start new ventures on their own are not given tax
12
holidays. State resources which ought to be used in creating job opportunities through
provision of loans schemes for youths to establish small and medium scale enterprises
are rather misappropriated by corrupt leaders.
-Job Deception by Elites and Politicians: Another devastating aspect of corruption
and youth unemployment in Africa is that employment opportunities circulate in
circles and caucuses. Most job opportunities are usually advertised publicly with
pretext to show the general public that the employers are equal opportunity
employers. Whereas in reality, such jobs will only be offered to relatives and friends
of influential people in the sector whether or not they are qualified. Thus, if one will
secure a job, power brokers must be identified. A more worrisome case is that private
corporations are mostly owned by the politicians who have accumulated state wealth.
With education getting more expensive for the children of the middle and common
class, limited access to equal employment further threatens the welfare of these
classes of citizens. Relatives and friends of the politicians or rich private
entrepreneurs get all the job opportunities leaving nothing for the common class. The
unemployed lower classes are deprived of equal access to job opportunities leading to
their further entrenchment in a circle of poverty. This is one unfortunate reason why
inequality is thriving in Nigeria.
-Lack of Suitable/Alternative Plans for Resource Exploitation. This feature is
typical of the use up of environmental resources like crude oil, timber etc for
production and there are no working replacement or alternative policies for
desecration. For instance, mining and oil activities in the Niger-Delta has discouraged
traditional activities of farming in that region. This has led to rendering initially
employed persons to be unemployed. Thus, the failure of government to create
alternatives for economic activities has led to crimes and crisis in that region.
In the words of …“The frustration of unemployment keeps boiling across the
continent like volcanic magma ready to erupt. In Nigeria’s oil rich Niger-Delta,
massive unemployment has provoked youths to lose hope in the government and
take to violence. Their hope rests in taking arms against employers to ask for jobs
from what they believe is oil wealth that is exploited from their back yards with no
benefits accruing to them in terms of jobs, good education, good healthcare,
portable water provision, and infrastructure development.”
5. Conclusion and Recommendation
This study has been able to look beyond the traditional textbooks factors affecting
unemployment. The empirical results have even shown that the issue of unemployment in
Nigeria is beyond the issues of population growth as advanced by some previous studies.
Rather the economic and even more, the politics of the issue has aggravated the
unemployment situation in Nigeria. This was reflective in some of the structures like public
expenditure, school enrolment which worsened the issue of employment in Nigeria. Hence,
the issue of unemployment in Nigeria is a question of formulating the right policies that can
enhance or foster innovation and investment that will create room for employment activities.
In addition, right education for the right jobs, right skills, infrastructural development, and
resource reallocation to areas like the agricultural sector and value addition to raw products,
changes in attitudes and values among others.
13
Thus, the need for the reversal of the increasing unemployment trend is imminent. This is
with a view to avert future crisis such as social vices, crimes; besides, it is to encourage
productivity through investment if Nigeria will be placed on a competitive edge.
14
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