Effects of youth unemployment on the Nigerian economy
Challenges of Skill Gap
The Visitor, His Excellency Alh. Ibikunle Amosun, The Executive Governor, Ogun State
The Chairman and distinguished members of this Institution’s Governing Council,
The Rector, Dr. Isaiah Kolawole Olayinka. Let me pause to congratulate you on your re-appointment after a successful and impactful first term as the Rector of this great institution of learning. You need not be reminded that the reward for hard work is more work. I wish you a more impactful second term.
The Registrar, Mrs. T. O. Raji
Other Principal Officers,
The Heads of Academic and Non-academic Departments,
The academic and non-academic staff members,
The students of this great institution,
Today’s graduates and future leaders,
Gentlemen of the Press
Distinguished ladies and gentlemen.
This lecture will be focusing on “Youth Unemployment: The Challenges of Skill Gap. In other words, I will be looking at the “mismatch between the demand for labour in the corporate worlds and the supply of labour by educational institutions”.
I believe the topic at hand is timely, given the incessant rise in unemployment that has plagued Nigeria for years now—and which, as new graduates, some of you will likely face.
Once again, I congratulate the Rector on behalf of this institution for not only being sensitive to the challenges in the labour market but also for being responsive by trying to find solutions to the problems. This is the kind of responses needed to move the nation forward.
One of the major challenges confronting Nigeria today is the high rate of unemployment among the youths. Every year, Nigerian higher institutions of learning turn out fresh graduates in their thousands while hundreds of those that studied abroad return to the country after the completion of their pogrammes to join their counterparts in search of jobs. The rate at which some of the educational institutions, especially private universities turn out graduates with first class and upper class grades are so alarming compared with a decade or two ago to the extent that one is tempted to ask whether the new graduates are more brilliant than their predecessors or is it a reflection of what many would like to refer to as declining quality of education? The irony is that many of these super grade graduates are not better off than their mates with lower grades in the labour market, in terms of quick access to employment or delivering on the jobs. They lack the skills required at the workplace in spite of their academic qualifications.
There are several reasons that have been adduced or deduced by scholars for the high unemployment rates in Nigeria. Some of the reasons have to do with harsh business environments and difficulties in doing business in Nigeria which have either restrained the growth capabilities of existing industries, forced some to liquidate or relocate from Nigeria and discouraged new ones from emerging (Imoisi, Amba and Okon, 2017; Ogunbanjo, et. al, 2017; Salami, 2013). The nation’s real sector remains largely undeveloped thereby limiting available jobs. For instance, the development and job potentials of the primary agriculture and agro-processing sector, and its value chain lie in waste. Agriculture remains largely subsistent rather than commercial; its implements are crude rather than mechanized farming system. A substantial proportion of produce of the farms rot between the farms and the cities, a substantial portion of those not wasted are exported as raw materials for industries in advanced economies who either process them into finished goods or improved raw materials for our economy. The story of the solid mineral sector is not in any way different from the Agriculture sector.
Therefore, the Nigerian businesses have not been able to achieve the scale of development of global peers because of the challenges we face as a nation; such as infrastructural deficits (like power, transportation), macroeconomic instability, and socio-political issues, among others. Our businesses are therefore unable to grow to full capacity and create sufficient employment opportunities! Even the education sector is affected by these challenges that limit investment in the sector.
Other reasons for high rate of unemployment among the Nigerian youths which are very relevant to our subject of discussions have to do with the quality of the labour seekers and the relevance of their education to the skills required in the work place (Longe, 2017; Chidiebere, Iloanya and Udunze, 2014; Uddin, Uddin and Osemengbe, 2013). The proponents of this second school of thought argue that though available job vacancies are few compared with the number of unemployed people out there, yet the skills required are absent as those in need of jobs lack the skill required by the employers of labour. Indeed, there is a disconnect between employers of labour and educational institutions. Employers complain that the curricula of higher institutions of learning have not evolved through the years with the changing business environment
Let me pause to note that unemployment is not a Nigeria problem. It is indeed a global problem. The major differences between nations are the unemployment rate and the intensity of the impact on the economy.
According to the World Employment and Social Outlook: Trends 2018, the global unemployment rate was put at 6.6%. The International Labour Organisation puts global unemployment in 2018 around 5.6%. That’s equivalent to about 192 million people across the planet without jobs. In Sub-Sahara Africa, the unemployment rate is expected to rise to 7.2%. The report also noted that:
i) More than one out of every three workers live in conditions of extreme poverty
ii) Three out of every four worker is in vulnerable employment
iii) The global economy is not creating enough jobs
In Nigeria, according to the Nigerian Bureau of Statistics (2017), the general unemployment rates are 14.2% (Q4, 2016), 16.2% (Q2, 2017) and 18.8% (Q3, 2017). The number of people searching for jobs (unemployed and underemployed) increased from 31.3 Million (37.2%) in Q2, 2017 to 33.9 Million (40.0%) in Q3, 2017 Youth unemployment rate for Q3, 2017 was 33.1% for age 15 to 24 years and 20.2% for those between 25 and 34 years old. As of Q3, 2017, 67.3% of young people 15-24 years were either unemployed or underemployed (work for less than 20 hours a week, low skilled jobs not commensurate with worker skills and qualifications). This was an increase from 64.6% of Q2, 2017. Similarly, the combined unemployment and underemployment rate for ages 25 to 34 years was 42.5% Q3, 2017 compared with 39.6% Q2, 2017. The combined unemployment and underemployment rate for all the youths (15-34 years) was 52.65% in Q3, 2017 compared to 45.65% Q3, 2016, 47.41% Q4, 2016 and 49.7% Q2, 2017. Think about that for a moment: Nigeria alone is responsible for about 8.3% of global unemployment. A single country, albeit an overpopulated one, accounting for almost 10% of global unemployment. And that country is ours. Worse still is the fact that our nation’s youth unemployment is estimated at 30%, higher than the overall national unemployment rate of 18.8%.
Effects of youth unemployment on the Nigerian economy
The effects of youth unemployment are many, and their level of impact differ across nations. In Nigeria, the effects of youth unemployment include:
(i) High rate of crimes
One of the attendant issues of high rate of unemployment is an exponential increase in the crime rates. Unemployed youths are more vulnerable to take to crimes than other categories of unemployed. There is a direct and significant relationship between unemployment and crime rates. Some of the crimes that are very attractive to unemployed youths include financial crimes, robbery, kidnapping, fraud and forgery, prostitution and terrorism.
i) Brain Drain and Loss of Expertise.
Many unemployed youths who could not find jobs in Nigeria have found solace in other nations especially Europe and America. For instance, medical doctors, code writers, software engineers and a host of other professionals required to join us to develop our country have relocated abroad in search of greener pastures after years of unemployment or underemployment. We train for others to reap. One recent instance is the case of Nigerian trained Dr. Oluyinka Olutoye, a co-director of Texas Children’s Foetal Center who performed a surgical operation on a foetus that had a tumor, sutured her back in and delivered the baby through a Caesarean Section at full term. What he did was unprecedented in the medical history. He probably relocated abroad after his medical training because there was no vacancy in any of our well-equipped hospitals.
ii) Slows down economic growth
Incomes empower the spending ability of the citizenry which in turn impacts on productivity and wellbeing of the economy. The higher the rate of unemployment, the more the people that are deprived of incomes that could have triggered economic growth. The government’s ability to generate revenues through taxes and levies that could have been deployed for more economic growth is also denied by the unemployed individuals.
iii) Inequality of income
The higher the unemployment rate, the wider the gap between the rich and the poor. The poor population is usually in the majority, and they are the first to be hit by the effects of unemployment. The gap between the extremely rich and poor is getting wider, almost eroding the middle-class that have a higher propensity to purchase and effectively contribute to the growth of the nation.
(ii) Decrease in the nation’s life expectancy ratio
It is expected that a nation with high unemployment rate and no welfare facilities for the unemployed would likely record higher mortality rates resulting from malnutrition, lack of timely and proper medicare and depression.
(iii) Increase in birth rate.
Unemployed people who stay at home most of the days are likely to engage in sexual activities to while away time and dissipate their unused energy with no intention to procreate but which often end in procreation. The poor and unemployed tend to produce more children than the rich because they have more idle time to themselves.
As a father, this issue of unemployment, especially among the youths, is dear to my heart. I cannot but agree with studies that describe youth unemployment as weapons of destruction or as potentially dangerous (Oyelola, et. al. 2014; Adesina, 2013; Okafor, 2011). As Nigerians, it is an issue we must all address collectively and urgently.
I am a teacher and a researcher, but I have chosen not to dwell too much on the factors I earlier mentioned and along with other ones that conspired to push up Nigeria’s unemployment rate. There are tonnes of research work on that already.
Rather, I have chosen for the purpose of this occasion to focus on what is of most concern to the young men and women for whom we are all gathered here today, and it is this: how does this state of affairs affect you and how should we all react to the challenges of skill gap in addressing unemployment?
Let me start with how it affects you. Well, it affects you in many important ways.