Unemployment Among Nigeria's Youth; A Serious Menace

We can't afford to make mistakes when it comes to dealing with young unemployment.
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By: Hope Vahyella Bolgent

Unemployment Among Nigeria's Youth is A Serious Crisis

Nigeria has a lot of difficulties, which is nothing new. However, due of the sheer magnitude of their potential impact, a subset of Nigeria's challenges may be more harmful to the country than others if they aren't handled quickly. Youth unemployment is one that requires more policy attention.

Nigeria's population figures from censuses are difficult to verify, therefore we must depend on estimates from primarily outside sources. Nigeria's National Population Commission has a connection to WorldoMeter for population data. We may deduce that the median age is 18 years old from there. Similarly, the World Bank estimates that 44% of the population is under the age of 15.

The huge number of young people isn't always a bad thing. This youthful population will develop and, in theory, enter the labor force, contributing to society in many ways. When one considers whether the country is prepared for the inflow of young people, the problem becomes more apparent.

Working is required for this youthful people to be productive. The employment market, on the other hand, does not appear to be improving. It's actually the worst it's been in a long time. Unemployment is at 33%, with underemployment at 23% (defined as those working 20-29 hours per week). These figures are greater for the youth (15–34 years old, roughly 50% of the labor force) at 42% and 21%, respectively, than for any other age group.

When the Q2 data were released last year, there was speculation that the (then) most recent NBS statistics were less trustworthy due to their small sample size. Ten million people have vanished from the statistics, with 11 million more following in the wake, according to the most recent data. The fact that we hadn't received official unemployment figures since 2018 didn't help matters.

It's worth emphasizing that whatever bias-introducing mistakes exist, they'd have to explain why the same survey, which shows that the working-age population has increased by approximately 5% since Q3 2018—slightly over its long-term trend—is considerably off on its labor-force estimates.

Especially since such a stunning occurrence as the disappearance of 21 million people from the labor force in just over two years would warrant further investigation to guarantee its correctness. While COVID, NBS financial considerations, and the transition to telephone surveys might have all contributed to the 2020 projections being off, the answer could be there in front of our eyes. Perhaps 21 million people have dropped out of the labor force in the last few years because they are so disillusioned by the economic situation that they have given up seeking for work. Is it really so far-fetched? However, for the purposes of focusing on young unemployment, any conceivable inaccuracy should not have a bias towards any age group, resulting in reasonable confidence that unemployment is particularly bad for Nigeria's youth—as the data indicate.

So, as we prepare to welcome this new generation of workers into the workforce, where will they find work?

If I'm seeking for work, I'll have to assess my abilities and hope to discover possibilities that fit. Many job searchers just lack the skills that particular businesses want, which is contributing to the labor market problem. Rather, there is an abundance of so-called "unskilled" labor.

The greatest level of education completed by 80 percent of the labor force is senior secondary school. There are a number of causes behind this. One factor that does not appear to be changing anytime soon is the fact that Nigerian institutions simply do not have enough space. We have 150 universities with a total enrollment of 600,000 students. Between 2010 and 2015, 75% of applications were turned down. Applications will only become more congested as the population becomes older and younger. Only a tiny percentage of the population has access to foreign degrees, which provide an alternative to university education. When schooling is no longer an option, most people's job prospects become restricted.

It is not immediately obvious whether or not a university education is advantageous in the Nigerian labor market. Bachelor's degree holders have one of the highest unemployment rates of any educational level in Nigeria, second only to the 1% of the workforce who have just passed A'levels. One probable cause is that contemporary university education does not adequately prepare students for employment. Another issue is that there are few'skilled' and 'unskilled' employment available.

So, we have a labor market with insufficient possibilities for individuals, an education system that isn't generating properly trained job searchers, and a massive inflow of people entering the system in the coming decades. Are we getting ready for this?

“No government in the history of this country has ever methodically and seriously put in place measures aimed at addressing poverty alleviation and creating jobs for youths like this administration,” said Lai Mohammed, Minister of Information and Culture.

He cited a number of Buhari government efforts to back up his claim, including N-Power and GEEP, which I previously discussed here, a new $75 billion fund called the National Youth Investment Fund, a Graduate Internship Scheme, N-TECH, N-AGRO, and other similar projects.

Clearly, the administration recognizes the need of focusing on the kids. It still doesn't seem to realize that this isn't an issue that can be solved by handing out modest loans and scholarships or offering temporary jobs (which many of the programs above boil down to). The government, despite its best efforts, is not large enough to support the whole economy. Government expenditure is lower in real terms than it was a decade earlier, at 5.7 percent of GDP in 2019. Non-government economic activity, on the other hand, accounts for nearly all of GDP—just under 95%. It is this 95 percent that must be empowered in order to spur economic progress. Of course, structural issues function as roadblocks that aren't easily overcomeable.

There are several viewpoints on how to handle the Nigerian economy's structural issues. There are issues on both the supply and demand sides of young unemployment. For the foreseeable future, the majority of our workforce will be educated only up to the senior secondary school level. It's critical to identify and promote sectors that will require and grow demand for "unskilled" labor.

A regulatory structure that promotes entrepreneurs is a big part of it. The merry-go-round of bike-hailing firms in Lagos state is arguably one of the clearest instances of what not to do, with ambiguous laws and restrictions setting up hurdles in the burgeoning dispatch riding sect.

Manufacturing, construction, and agriculture, outside of the service sector, appear to be the greatest alternatives for absorbing millions of unskilled people due to their labor-intensive character in developing countries. However, people must be motivated to become employers, and economic history has demonstrated that profit is a powerful motivation. The government must strike a balance between ensuring that firms are not exploitative while still being free to engage in entrepreneurial activity. We won't have enough employment in the economy unless more individuals believe they can effectively start firms in these industries and succeed.

On the supply side, the educational system must be set up in such a way that those who graduate, whether from secondary school or university, have employable skills. It is a multifaceted problem. The existing structure fails to meet the demands of a contemporary economy in several ways. The long-term answer would necessitate a multi-pronged strategy to address the many infrastructural, curriculum, and knowledge deficiencies, which would entail a near-total renovation of what we now have. In the medium term, there has to be more active engagement between the corporate sector and educational institutions, as well as encouragement of various options to university study.

Looking ahead, it's clear that now is the greatest moment to capitalize on a youthful population. In an ideal world, the youthful population contributes to society by working and paying taxes, making it simpler for the government to offer assistance to those in need. If we lose out on this opportunity, when this generation retires, more will be required of the future working population to support retirees who are reliant on others and the government, increasing Nigeria's already high dependence ratio of 86%.

Prior to then, the issues in the present would begin to mount up. Even if they can't find work, young people must eat. Because there are limited legal choices, illicit ones will become more appealing. It's not unexpected that there are an increasing number of "fraud boys." Other illegal acts may grow in popularity. Youth unemployment has been linked to an increase in all types of crime, according to studies.

Adding millions of dissatisfied and hungry young people to Nigeria's rising insecurity crisis, as well as the years-long struggle with Boko Haram and other terrorist organizations, to a simmering pot might erupt in our faces.

We can't afford to make mistakes when it comes to dealing with young unemployment. The situation is already dire, but Nigeria's demographic trajectory suggests that it might worsen further, putting the country in grave danger.