Global Business and Economics Research Journal ISSN: 2302-4593 Vol. 3 (2): 12 - 32

The rising rate of unemployment in Nigeria: the socio-economic and political implications Kayode Asaju Federal University Wukari, Nigeria [email protected]

Samuel Arome Angel Crown College of Education, Nigeria

Silas Felix Anyio Ahmadu Bello University, Nigeria

Abstract The incidence of unemployment in Nigeria in this 21st century is alarming. The rates keep on rising without any appreciable effort to cushion the effects. Hence, this paper examines the factors responsible for high unemployment in Nigeria and its social, economic and political implications. Findings revealed that corruption in both public and private and at the individual levels, industrial decay, and neglect of the agricultural sector are among many others factors responsible for the scourge. It was also revealed that widespread poverty, youth restiveness, high rate of social vices and criminal activities are prevalent because of joblessness, and if not controlled, apathy, cynicism and revolution might become the consequent. The study therefore, recommends urgent intervention in the sensitive sectors of the economy such as power, industry, and agricultural sectors in order to create employment opportunities. Also, the fight against corruption should be intensified.

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Keywords: employment; socio-economic; political; unemployment; development

Citation: Asaju, K. et al. (2014). The rising rate of unemployment in Nigeria: the socio-economic and political implications. Global Business and Economics Research Journal, 3(2): 12-32.

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1. INTRODUCTION Unemployment is one of the fundamental developmental challenges facing Nigeria at the moment. Research have shown that unemployment was high in the 1980s, but the available reports from various local and international bodies, and the glaring evidence of joblessness in this decades are clear indications that there was no time in Nigeria’s chequered history where unemployment is as serious as now. One cannot really conclude that the government at one level or the other have not done anything at one time or the other, to reduce unemployment in Nigeria. For instance, the creation of National Directorate of Employment (NDE) and its skills acquisition programmes, NAPEP, PAP, the SURE-P,YOUWIN, just to mention a few, are some of the various intervention mechanisms aimed at ensuring economic growth that is rich with job creation opportunities. Besides, the Federal Government over the years has been claiming strong real GDP growth rate measuring at 6% or 6.5% since 2005 till date (see Aganga, 2010 and Ogunmade, 2013). This is apparently a paradox. A situation whereby, there is a decade of strong real GDP of 6.5% economic growth, and in the same period, unemployment rate continue to rise annually from 11.9% in 2005 to 19.7% in 2009, and over 37% in 2013% (Aganga, 2010 and Ogunmade, 2013). The apparent economic growth has not lead to economic development. The rate of poverty is still very high, the industries are still in shambles, technological development is till at rudimental stage, income inequality is high, immortal mortality rate and child mortality rate is high, and in fact, Nigeria development index is still very low. Unemployment according to ILO, is among the biggest threats to social stability in many countries (including Nigeria), putting the global rate at 12.6% (ILO, 2012). When compared with her counterparts in the continent, Nigeria’s unemployment crisis is more serious. For instance, South Africa’s unemployment rate is currently standing at 25.2%, and in Ghana is about 14% in 2010, while Nigeria is around 37%. Recent statistics by the World Bank has put the unemployment rate in Nigeria at 22 percent, while the youth unemployment rate is 38 percent. The report shows that the bracket age of 15-35 years olds account for close to 60 percent of the Nigeria’s population and 30 percent of the work force. The report also indicates that approximately 4 million people entered into the labour market every year (Subair, 2013).

Nigeria. As noted by the World Bank report, the youth holds the key to achieving the Vision 20: 2020. The fundamental questions that naturally arise from these facts is that why is the © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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human and natural resources capable of providing employment for the teeming youths in

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This situation is pathetic considering the fact that the country that is blessed with a lot of

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rate of unemployment on the increase during the decade of about 7% (GDP) economic growth? What is wrong with the various intervention programmes during this period of high unemployment cum GDP? What are the implications for socio-economic and political development? These questions informed the basis of this paper. Therefore the objective of this paper is to examine the magnitude and dimensions of unemployment in Nigeria and its implications for socio-economic and political development in Nigeria. This paper undertook a qualitative research to answer these and many other questions begging for answers using secondary sources (government publications, journals, Local and international statistical reports and live TV broadcast). The content analysis was utilized to analyze the data collected from these instruments.

2. CONCEPTUAL ISSUES 2.1 Unemployment There seem to be a consensus on the definition and usage of the concept, unemployment. According to Udu and Agu (2005), unemployment is “a situation in which persons capable and willing to work are unable to find suitable paid employment”. As defined by International Labour Organisation (2007), unemployed workers are those who are currently not working but are willing and able to work for pay, currently available to work and have actively search for work. Hornby (2010) defines unemployment as “the facts of a number of people not having a job; the number of people without a job; the state of not having a job”. In the same vein, an operational definition of unemployment for this work will include the underemployed, hence unemployment occurs when people who are able and willing to work are without jobs, or cannot find work that is effective and productive to do. It also occurs when people undertake jobs that are contrary or lower than their academic qualifications or areas of specialization. For instance, a first or second degree holder that enrols as a recruit into any of the armed forces or paramilitary or a degree holder working as a clerk in an office is greatly underutilized and as such could be termed as unemployed even when such person is on a job. 2.2 Underemployment Underemployment

is

unemployment

in

disguise.

Harold

(2009)

described

their needs. This implies that the underemployed are individuals who are working outside their areas of specialisation due to lack of jobs and so, could not be paid commensurately to © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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ineffective or unproductive, with a correspondingly low income that is insufficient to meet

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underemployment as when people are employed only on part time or at work that is

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their qualifications or expertise. If the factors of production are not being used to the full capacity, there is underemployment (Anyanwuocha, 2010). 2.3 Types of unemployment in Nigeria Economists have distinguished between the various overlapping types (or causes) of unemployment. Some types of unemployment in Nigeria are explained below: 1. Seasonal Unemployment: According to Udu and Agu (2005) seasonal unemployment occurs mostly in industrial sector, and in the enterprise that are seasonal in nature. Such activities engage labour temporarily during peak periods. For example, during the rainy season, many men who are engaged in fishing and building may go out of work during bad weather. Fishing, for instance is not usually done during the rainy season in many parts of Nigeria. More so, during Christmas season, shop owners and companies employ extra hands for the seasonal sales. These extra hands are usually relieved of their jobs when demand for products decreased. 2. Structural Unemployment This occurs when a labour market is unable to provide jobs for everyone who wants one, because there is a mismatch between the skill of the unemployed workers and the skill needed for the available jobs (Wikipedia Encyclopedia, 2011). Structural unemployment could also results from persistent cyclical unemployment, that is, if the economy suffers from long-term low aggregate demand and in the techniques of the industry, unemployment could occur (Udu and Agu, 2005; Wikipedia Encyclopedia, 2011; and Harold, 2009). For example, as time goes by, there may be permanent fall in the demand for certain products which may be due to a change in taste. The brick industry in Nigeria, is suffering permanent fall in demand now because people prefer to use cement blocks to build their houses instead, this has caused sharp unemployment in that industry. More so, long lasting low demand could make the unemployed disheartened while their skills become rusty and obsolete, and as a result they many not fit the job vacancies that would be created when the economy recovers. Some technological unemployment which occur due to the replacement of workers by machines might be counted as structural unemployment.

For example, Udu and Agu (2005) asserted that, there is frictional unemployment when certain occupations have surplus workers in one part of the country, while vacancies for © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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There seems to be divergence on the meaning and causes of frictional unemployment.

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3. Frictional Unemployment

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similar jobs occur and are not filled in other parts of the country. To them, immobility of labour and imperfect knowledge of the existence of opportunities elsewhere are the main cause of frictional unemployment. In contrast, Harold (2009), Anyanwuocha (2010), and Wikipedia Encyclopedia (2011) agreed that frictional unemployment is the time period between jobs, when a worker is searching for job or transitioning from one job to another. It occurs because workers seeking jobs do not find them immediately. Friction here refers to the incongruity between the demand for and supply of labour (Harold, 2009). For example, frictional Unemployment could occur between the time a student completes his studies and the time he is able to find a job (Anyanwuocha, 2010). This type of unemployment is always present in an economy and is more common with specialised labour. 4. Transitional Unemployment Udu and Agu (2005) refer to this as normal unemployment, because it is short duration. It does not harm the economy. In construction industries or contract jobs which rely heavily on manual labour, workers are temporarily laid off at the end of major assignments. Such workers are re-engaged when other jobs becomes available. Others may drift to other ongoing projects. 5. Classical Unemployment This occurs when real wages for a job are set above the market – clearing level, causing the number of job-seekers to exceed the number of vacancies. Most economists have argued that increased government intervention in the economy leads to increase in the rate of employment of a nation. For instance, the minimum wage as stipulated by Labour Law has also raise the cost of unskilled or low skilled labour above the market equilibrium. This led to a drastic reduction in the employment of these categories of labour. Many in these categories of labour force who even wish to work at the formal wage rate could not be employed due to this Law, consequently, adding to the high number of the unemployed in the country. Furthermore, laws restricting lay-offs made businesses less likely to hire in the first place, as hiring becomes more risky, leaving many young people unemployed and unable to find work. 6. Hidden Unemployment

many countries only those who have no work but are actively looking for work (and/or qualified for social security benefits) are counted as unemployed. Those who have given © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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reflects on official unemployment statistics, due to the way the statistics are collected. In

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Hidden unemployment is the unemployment of potential workers that does not usually

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up looking for work (and sometimes those who are on government retraining programmes) are not officially counted even though they are unemployed. The same applied to those who have taken early retirement to avoid being laid off, but would prefer to be working. The statistics also do not count those with part time or seasonal job who would rather have full time jobs as unemployed. In addition, those who are of working age but are currently in full-time education are usually not considered unemployed in government statistics. Because of hidden unemployment, official statistics often underestimate unemployment rate. However, a critical examination of the various types of unemployment shows that unemployment can be voluntary or involuntary. Though, there have been several definitions of voluntary and involuntary unemployment in the economic literatures, a simple distinction is applied. Voluntary unemployment is attributed to individual’s decision which includes workers who reject low wage jobs. Whereas, involuntary unemployment exists because of the socio-economic variables (such as the market structure, government policies, etc.) which permeate the environment in which one operates. It includes workers fired due to an economic crisis, industrial decline, company bankruptcy or organisational restructuring. Hence, structural unemployment, and classical unemployment are largely involuntary in nature. In addition, most cases of unemployment in Nigeria are usually involuntary.

3. THEORETICAL FRAMEWORK There are divergent views by scholars in economics on the theoretical bases of unemployment. However, the two prominent schools of thoughts will be applied in this research work to discuss the multidimensional situation of unemployment in Nigeria. These are Keynesian Economic Theory of unemployment and the Marxist Theory of unemployment 3.1 The Keynesian unemployment theory This theory is also called the cyclical or deficient-demand unemployment. The cyclical or Keynesian economists hold the view that unemployment occurs when there is not enough aggregate demand in the economy to provide job for everyone who want to work. According to these economists “when demand for most goods and services falls, less

Encyclopedia, 2013).

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not fall to meet the equilibrium level, and mass unemployment results (Wikipedia

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production is needed and consequently fewer workers are needed, wages are sticky and do

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The name cyclical is derived from the “frequent shift in the business cycle, although unemployment can also be persistent”. For instance, the decade of the 1930s saw the Great Depression impact on labour market across the globe. In Germany for instance, the unemployment rate reached nearly 25% in 1932. In some towns and cities in the north-east of England, unemployment reached as high as 70%; Canada reached 27% at the depth of the depression in 1933. The United States unemployment rate averaged 3% in 1929, but in 1933, 25% of all American workers and 37% of all non farm workers were unemployed. More recently, history repeat itself again when more than 25 million people in the world 30 richest countries will have lost their jobs and joined the already unemployed workers between the end of 2007 and the end of 2010, as the global economic downturn pushes most countries into recession again (Wikipedia Encyclopedia, 2011). Nigeria seems to be one of the worst hit. For instance, while many government agencies and parastatals laid embargo on employment in the last two decades, within the same period, governmental reforms disengaged about 121,731 workers from the public service between 2006 and 2007. During the first phase of the rightsizing process of the 2005 public service reform, about 30,000 officers of the core civil service were disengaged from service. (Adegoroye, 2006). The banking industry also suffered adverse effects of the financial crisis. Some banks in the sector massively ‘swept out’ their work force in a bid to remain in business and this has drastically increased the rate of unemployment in Nigeria. The Keynesian economists argue further that the number of unemployed workers exceeds the number of job vacancies, so that even if full employment were attained and all open jobs were filled, some workers would still remain unemployed due to some mismatch in the economy. Some associate this theory with frictional unemployment because the factors that cause the friction are partly due to cyclical variables. For example, a surprise decrease in the money supply may shock rational economic actors and suddenly inhibit aggregate demand. Hence, Keynesian economists see the lack of demand for jobs as potentially resolvable by government intervention. Their prescription for reducing unemployment is deficit spending by government to boost employment and increase in aggregate total demand. They further suggested intervention through an expansionary monetary policy that increase the rates thereby leading to an increase in non-government spending (Haris, 2005), and policies that

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encourage more private investment (Obadan and Odusola, 2010).

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3.2 Marxist theory of unemployment This theory was developed by Karl Marx in 1863. From his Theory of Surplus Value comes the citation below: “It is the very nature of the capitalist mode of production to overwork some workers while keeping the rest as a reserve army of unemployed paupers.” (Karl Marx, 1863) Source; (Wikipedia Encyclopedia, 2011) Karl Marx, in this theory, believes that unemployment is inherent within the unstable capitalist system and periodic crises of mass unemployment are to be expected. Capitalism, to the Marxists, unfairly manipulates the labour market by perpetuating unemployment which lowers labourers’ demand for fair wages. Workers are pitted against one another with the motive of increasing profits for their employees. In the conception of Karl Marx, the only way to permanently eliminate unemployment would be to abolish capitalism and the system of forced competition for wages, and then shift to the socialist or communist economic system. For the contemporary Marxists, the existence of persistent unemployment is a proof of inability of capitalism to ensure full employment. The socio-economic distress the Nigerian citizens faced under colonialism led the populace to clamour for socialism as advocated by the Marxists. The socialist movement was initially a reaction against extreme poverty caused by capitalism on the masses. It lays great emphasis on the state embarking on a broad programme of welfare for the people, “the programme that would provide social insurance to protect the masses against unemployment and economic distress”; for instance, the post-independent Africa preached socialism. The NCNC government under Dr. Nnamdi Azikiwe and Dr. Michael Opara, preached “Welfarism and Pragmatic Socialism”. The Action Group, under Chief Obafemi Awolowo advocated “Democratic Socialism”. And in Ghana, under Dr. Kwame Nkrumah, many state industries were instituted (Udu and Agu, 2005). However, the present day Nigeria seems to be taking a leap at mixed economic system due to low impact of capitalism and socialism to bring about real economic growth and development. Developing countries of which Nigeria is one, are calling on both the government and private sectors to cooperate and develop the country’s economy. Recently, the government is adopting the public- private partnership initiative in achieving and

Asaju et al. (2014) had strongly posited that full participation of government in running the

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of the private sector alone; therefore there is the need for the government to participate fully.

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accelerating some developmental objectives. Pivoting the economy cannot be left in the hand

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economy through its fiscal policy will ameliorate Nigeria’s numerous economic challenges especially poverty, unemployment and corruption. More so, some intervention programmes introduced in Nigeria such as the Nigerian Directorate of Employment (NDE) with the goal of designing and implementing programmes to combat mass unemployment, Poverty Alleviation Programmes (PAPs), Subsidy Reinvestment Programme (SURE-P), YOUWIN programme, etc, and subsequent injection of billions of naira into these programmes and other sectors to create more employment opportunities as claimed by the Federal Government can be seen as a leap into the Keynesian theory.

4. TRENDS IN UNEMPLOYMENT RATES IN NIGERIA Nigeria does not have any reliable figure on the rate of unemployment, as no institution has so far produce accurate figures showing the current unemployment rate (Udu and Agu, 2005). The figures published by National Bureau of Statistics, the World Bank, and CIA World Fact book and the recent one given by the Coordinating Minister for the Economy (CME) Dr Okonjo-Iweala, appeared to be contradicting. The reason for these differences and contradictions have been explained by Raheen (1993), Ohiorhenuan (1986) and Okigbo (1991) in Obadan and Odusola (2010) that, one, only recorded open unemployment is published by the official statistics. Two, the concept of labour force adopted in Nigerian Labour Force Statistical Survey excluded those below 15 and above 55 (but actively working) out of the Labour Force. Three, unpaid family workers and full house wives were excluded. Furthermore, the Director General of NDE asserted that people below 18 and above 60 years are not counted among the unemployed, so in counting unemployment, you don’t count below 18 years of age and according to the law, if you reach 60 years you retire. “It is this margin of between 19 and 60 years that you can begin to aggregate those who are able to work, willing to work, want to work, but have no work to do. You call them the unemployed” (Akaeze, 2011). However, the incidence of unemployment in Nigeria especially in this 21st century is getting deeper and wide spread, cutting across all facets of age groups, educational strata and

4.3% in 1976 to 6.4% in 1980. The unemployment rate in Nigeria rose to 28.0 % in 1986 (Okigbo, 1989 in Obadan and Odusola, 2010). © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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Nigeria was more endemic in the 1980s than any other period because the rate rose from

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geographical entities (Obadan and Odusola, 2010). They opined that unemployment in

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According to a 2009 World Bank Report, 40 millions (28.57%) of the country’s employable people are unemployed. The figure, according to the same World Bank, rose to 50 million a year later (Daily Trust, 2009). What make the situation more worrisome are the controversies over whose figure is most correct or acceptable. It appears that the government is still at cross-road about the actual percentage of her unemployed populace. For instance, in May 2013, the NBS put the figure of the unemployed in Nigeria at 23.9% (Emejo, 2013). While Dr.Okonjo-Iweala, Minister of Finance and the Chairman of the Economic Team in Nigeria puts the current figure at 37%. Meanwhile, experts and critics have disagreed with the NBS and Minister’s figure, arguing that “research had shown that the current level of unemployment in Nigeria was above 40% and would rise to 50% at the end of this year” (Ogunmade, 2013). There is need for synergy of operation among the Ministries, Department, and Agencies (MDAs) of government in order to tackle the developmental challenges that is ripping off the gains of Nigeria’s high GDP.

5. UNEMPLOYMENT IN NIGERIA 5.1 Factors responsible for the rising unemployment in Nigeria The high unemployment situation in Nigeria is real. Even the government (at all levels) has severally admitted to this fact at different fora (see Daily Trust, March 16, 2009; Akeredolu, 2010; Aganga, 2010; Agbaegbu, 2011). Nigeria is rich. It has every potential to develop and put poverty and unemployment issues into history. But the paradox now is that Nigerians still wallow in poverty as unemployment rate keep rising at alarming rate due to some factors discuss below: 5.1.1 Corruption Corruption is not a strange word to an average Nigerian. Simply put, it is a dishonest or illegal behaviour, especially of people in authority. It is an abuse of public office for private gain which usually involves embezzlement of public funds, nepotism and falsification of facts and figures, etc. Corruption has no doubt done an incalculable damages to every facets of the country Nigeria. It has undermines democratic institutions, retarded economic growth and development (Samuel, 2011); and cause poverty in the mist of plenty, it has prevented the

education, housing, health, food and infrastructure (National Standard, Oct. 15, 2007).

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high level of mass unemployment in the country. It has denied millions of Nigerians access to

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country from making political, social and economic progress and ultimately brought about

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It is indeed worrisome for a country like Nigeria, with all the resources having over 61 millions (37%) unemployed; and over 70% of the population living below poverty line, whilst its leadership at all levels amass ill-gotten wealth with impunity. It is a popular belief that ascription and nepotism permeates job placement in both private and public sectors. In the labour market today, ‘whom you know’ and ‘how much you can pay’ determines one’s chances of securing employment, rather than merit. These of course, have denied well qualified, determined and energetic Nigerians employment. 5.1.2 Poor Management Practice Nigerians are known for lack of good management culture. The country is blessed with abundant natural resources. It is believed that if the resources are well harnessed, fully developed and well managed, Nigeria is capable of surmounting the problem of high unemployment and its attendant effects. Harnessing the nation’s economy involves assessment of one’s resources at present and allocating them to different competing sectors so as to meet some certain goals. In the same vein, Nigeria does not lack good economic plans. What is lacking is proper implementation. The process of implementation has been taken over by corrupt and incompetent implementers failure result. The Public Service is the major implementer of government policies and programmes in Nigeria. Asaju (2010) have asserted that the Nigerian Public Service remains an obstacle to effective implementation of government policies and programmes. This he adduced to the high rate of corruption and dishonesty and indiscipline on the part of the public servants. Studies have shown that since the First National Development Plan (1962-1968), Nigeria has had several other development plans both long and short term. These plans have not resulted to the uplift of the standard of living of the citizenries and overall development in the country. 5.1.3 Neglect of Agricultural sector Until early 1970s, agriculture remains the mainstay of Nigerian economy. It constitute the major income earning for the country and the largest employer of labour as over 90 percent of the populace worked and earn their daily income from this sector. Following the rise in the price of petroleum (oil boom) in 1970s, and the attendance huge foreign income, the agricultural sector suffered a substantial decline till today. The huge finances from the oil

were farmers left their farm land to pick up menial jobs in the urban centres which are scarce and inconsistence. Corporate Nigeria (2007) puts the country’s labour force statistics as © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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in the urban centres. This later resulted in rural- urban migration in which able body men who

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sector have brought about the growth of public and private enterprises which are concentrated

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follows: 70% in agricultural sector; 10 % in the industrial sector; and 20 % in the service sector of the economy. Many analysts have argued that there is a strong relationship between the neglect of agricultural sector and high rate of employment in the country. Agriculture remains a panacea for reducing the high rate of unemployment and poverty in Nigeria. The monopolistic nature (over reliance on oil) of the economy remains a contradiction. 5.1.4 Infrastructural Decay This is yet another dismal factor that has rendered millions of Nigerians unemployed. Haris Dafaranos, a former Greek Ambassador to Nigeria is one of those who believed that if the infrastructure is improved and empowered policies are put in place, people will have opportunity to employment and use their talent in sectors like textile which is capable of absorbing both skilled and semi-skilled workers (Abbah, 2009). No doubt that the inability of successive administration to tackle the problem in power sector has done an incalculable harm to all facets of the economy especially the manufacturing enterprises in the country. Currently, there are barely 200 operators in the real sectors of the economy. For example, Dunlop Nigeria Plc which was a dominant manufacturing enterprise in the country has been shutting shops; Michelin, a tyre manufacturing company followed suit. The last surviving textile mill in Kaduna, the United Textile Mills (UNT) Plc has been shut down for long. The United Nation Industrial Development Organisation (UNIDO) statistics indicated that over 170 textile companies have closed shop and 120,000 employees are rendered jobless on account of poor power and water supply, high cost of fuel and massive smuggling of counterfeit products into the country from Asia (Kolade-Otitoju, 2009). 5.1.5 Lack of Purposeful Leadership and Good Governance There is a general agreement among political observers of Nigerian politics especially in recent times that the nation has never been lacking in terms of initiating good ideas towards enhancing the welfare of the citizens, what was lacking is the political will to turn these ideas into concrete results. Asaju (2010) affirms that “hardly had any administration come on board without a virgin plan professionally packaged to ease the agonising pains of the masses, although these plans which come with great expectations are found to be more active on papers”. Successive administrations’ effort to combat the menace of unemployment and its

etc which also aggravates political instability.

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corruption, lack of political- will to implement government projects, lack of good governance

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attendant effects over the years ended up in a deadlock and the reason is not far from

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5.1.6 Unfavourable Government Reforms If the nation’s social and economic system is malfunctioning, it calls for reformation. But when economic reform is devoid of human face, the citizen’s welfare will be jeopardised. For example, the public sector reforms embarked upon by the administration of former president Olusegun Obasanjo saw the disengagement of 121,731 workers from the Federal Public Service between 2006 and 2007. More so, it was disclosed that a total of 48,037 officers were severed from the civil service in the first year of Late President Yar’adu’s administration 2008 (OSGF, 2008). The reform also hit the banking sector with massive retrenchment of workers. The oil industry was not left out, NNPC alone pruned its work force from 17,000 down to just 9,000. One may ask whether reform paradoxically mean increasing unemployment and wide spread poverty. The reform in Obasanjo’s own words will have to wear a ‘human face’ if they are to gain widespread acceptance (Jason, 2007). In contrast, government has slimmed applicants chances to fill vacancies available within the same period without creating other opportunity. For instance, out of over 105,000 candidates who applied for employment into Federal Inland Revenue Service (FIRS) in 2010, only 1,858 persons were recruited. The rest were left unemployed (see Akeredolu, 2010). 5.1.7 Unfavourable terms and Conditions Placed on Jobs There is no doubt that years of experience brings about efficiency and productivity. However, the issue of stretching years of experience and age limit by the employers as criterion for employment has narrowed chances for employment. A 31-year-old unemployed graduate of economics lamented thus: I wonder where some of these people want us to get the experience if we are not given the opportunity to even start. In most cases, employers insist on 25 years age limit and five years work experience. But with the challenges people face before graduating in this country, how do you expect a 25 year old to have acquired five years experience?

Akaeze

(2011). Similarly, the presence of over-aged workers, those who are due for retirement but (for the fear of the socio-economic insecurity in the country), refused to retire, has left no opening for

year as the optimum age of basic degree graduate into the Civil Service on GL.08 and a maximum 35 years in service to attain age of compulsory retirement age of 60 years; and the © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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succession potential into the Civil Service on the basis of age profile is very low. Using 25

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fresher to come in. A study carried out by the Bureau of Public Service Reform indicates that

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FCSC prescribed promotion eligibility, grade level stay of 3 years between GL.08 and 15 and 4 years between GL.15-17, the study shows that 91.5% of the officers were found to be over aged for their grade levels and position occupied. Thus the succession potential was less than 20% in all cases. (Adegoroye, 2006). The above findings have a great implication for employment opportunities, especially for the youths who are more vibrant and energetic. 5.1.8 Systemic Problems in Education Most people blamed the falling standard of education in the country for the rising unemployment in Nigeria. It has been argued that many universities and other tertiary institutions shun out half-baked products in their thousands who are hardly suitable for the labour market or gainful employment. Some educationists refute such assertion, and argued that “where there are half-baked products from our universities, know that the problem is systemic”. Turning the blame back to the government, Ndifon (2009) argued that the curriculum has not been planned to meet with the present society and in most cases there are poor facilities and sometimes non to train the students. In the same vein, Samuel (2011) dictum that the educational system laid much emphasis on certificate acquisition while neglecting the application of the knowledge and skills acquired to meet the challenges of the contemporary Nigeria. However, Ogunlade (2007) blamed the systemic problem in Nigeria educational system on the colonial legacy which continues to rub shoulders and even persist as the order of the day in contemporary Nigeria. The negative public attitude or prejudice for agriculture and the dignity of labour during the colonial past still persist. He captured it thus: the colonial policy of education for agriculture and dignity of labour in Nigeria looked better on paper than in practice, promoting agriculture to feed the nation and make it the cornerstone of the economy in contemporary remains in the realm of the rhetoric”. (Ogunlade, 2007) Similarly, statistics have shown that about three millions youths graduate from our secondary schools annually, but only about one-third (one million) of them proceed to higher institutions; while about two millions go into the labour market without the basic employability skills. Most of these youths hate going into agriculture or any entrepreneurial

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self-reliant, teaming unemployed graduates becomes the consequent.

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jobs. When students are trained to be ‘white collar job’ seekers rather than job creators or

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5.1.9 The Effects Of Globalisation The process of economic globalisation in labour in Nigeria has had a tremendous negative impact on Nigeria economy and subsequently on the reduction of poverty and unemployment (Agbaegbu, 2011). According to Scholte (2000) reflected in Aluko (2006), globalisation means “internationalisation (cross border relations between countries); liberalisation (removal of government imposed restrictions on movement); universalisation (spread of various objects/experiences); Westernisation or modernisation (dynamism); and deterritorialisation (spread of super territoriality). The process whereby political, social, economic and cultural relations increasingly takes on a global scale and having profound consequences for individuals’ local experiences and everyday lives is referred to as globalisation (Aluko, 2006). The challenges of globalisation on Nigeria have been daunting because Nigeria has since operated

an

open,

externally

dependent

economy.

The

presumed

benefits

of

internationalisation lured Nigeria into accepting and adopting Structural Adjustment Programme (SAP), a neo-liberal policy, with the hope that she will be in a position to benefit from the process. It appears that due to the dependent nature of Nigeria economy, the country has not benefited much from globalisation process. The forceful implementation of neo-liberal policies such as SAP whose condition include privatisation, trade and capital liberalisation, deregulation and removal of subsidy, devaluation of currency etc. are similar to the components of globalisation, which is a neoliberal ideology. This is couple with other conditions given to Nigeria by IMF, World Bank, Paris Club among other imperialist financial institutions across the world before granting loan facilities or aids to the country. Many of these conditions are unsuitable and anti- progressive to the development efforts in Nigeria. 5.1.10 Lack of enabling Environment Government does not create enabling environment for the unemployed Nigerians to create job or small scale business for themselves. The hostile business environment precipitated by poor infrastructure, particularly poor power and water supply, and trade policies which allow all kinds of imported goods to flood the country have created high unemployment rate in the

Successive government have allocated resources to the power sector in last two decades, yet the target 4000 megawatts have not been met. Recently, it was announced that the countries © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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Many artisans who cannot afford power generators have been forced to remain idle.

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country.

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generation capacity have fallen to about 2000 megawatts. This megawatt is grossly inadequate even for domestic proposes. Roads and rail connectivity are in the state of moribund and inefficient. Entrepreneurship has been systematically desensitised because small businesses that have limited access to capital and political connections are forced to collapse. The causes of unemployment in Nigeria are quite inexhaustible. 5.2 The Implications of Unemployment in Nigeria The adverse effects of high unemployment in Nigeria cannot be overemphasised. The implications are daunting on both socio-economic and political fronts. For clarity, these implications are grouped into social, economic and political implications. 5.2.1 The Social Implications The social implications of unemployment are first felt at the individual and household level before extending to the entire society and consequently the economy. The unemployed individuals are usually unable to earn money to meet financial responsibilities and the basic necessities of life. Across Nigeria, the growing ranks of people who are made homeless today arise from unemployment (see Agbaegbu, 2011 for the ordeal of the unemployed Nigerian youths). The effects of unemployment on the individual and household include; wide-spread poverty and inequality with its attendance consequences. These manifest in the following dimensions; it increases susceptibility to malnutrition, illness and mental stress, subsequent loss of self-esteem leading to depression; it can lead to escapists and/or other self destructive behaviour used as coping mechanism e.g. excessive alcoholism, drug abuse, etc; it can lead to dysfunctional social and emotional relationships; loss of self-confidence; feeling of shame, un-fulfilment and inadequacy; it jeopardises access to health care; loss of social and economic security; it limits educational opportunity for the children and other members of the family; it limits the family access to good housing; it increases vulnerability of family members especially women, children and elderly; and it can create tension and conflict e.g. domestic violence. On the society, unemployment brings about widespread criminality, societal ills and social vices such as hooliganism, armed robbery and prostitution. In most cases, young graduates who are caught in criminal acts such as armed robbery, kidnapping and prostitution attribute

kidnapping, vandalism, 419 and other forms of criminality and even the Niger Delta uprising

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the high rate of communal crisis, youth restiveness, hire killings and assassinations,

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their involvement in those crimes to the unemployment situation in Nigeria. In recent times,

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and the recent ‘Boko Haram’ insurgents in the northern part of the country were attributed to the high rate of unemployment, especially among the youths in the country. 5.2.2 Economic Problems Associated with Unemployment An economy with high unemployment is not using all of the resources, specifically labour available to it. Since it is operating below its production possibility frontier, it could have higher output if the entire workforce were utilised. If as a result of lack of jobs, the frictionally unemployed people accept and work below capacity (i.e. underemployment), and operate below their skill level, it reduces the economy’s efficiency. It leads to loss of potential output in a developing economy. More so, during a long period of unemployment, workers can also lose their skills, causing a loss of human capital. It could also lead to low level of income and high rate of income inequality which further aggravates the high rate of poverty and unemployment with is attendance consequences. 5.2.3 Political Implications of Unemployment One of the major implications of high unemployment to a country like Nigeria with wide spread corruption and bad governance, is palpable, increase apathy, cynicism and despondency. Many people become increasingly individualistic and exclusively pre-occupied with the problems of survival or subsistence. They show little or no concern for government issues, activities and policies and programmes. High unemployment has been blamed for civil unrest in Nigeria, in some cases leading to revolution e.g. Boko Haram crisis in the Northern part of the country. It was one of the thematic causes of the mass-protest in Egypt that over-thrown president Hosni Mubarak on 11th February, 2011, leading to the current state of anarchy. Hassan (2010) believes that the high rate of kidnapping, civil unrest and political thuggery can be traced to unemployment situation in Nigeria. The former military President, General Ibrahim Babangida (Rtd) and Chief Olusegun Obasanjo, disclosed at different fora that poverty and idleness were product of political instability which in turn gave birth to incessant religious and ethnic confrontation which in recent times led to mutual and mass slaughter of Nigerian people. Blaming unemployment for all these crises, IBB said, “idle hands were always the devil’s instrument and that if people were fully engaged they would hardly have the time to see

employers and Labour at the 100th International Labour Conference (ILC) in Geneva, Switzerland, Obasanjo was quoted as saying that “Nigeria was sitting on a keg of a gun © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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jobs for the youths and older population (Adesanmi, 2010). Addressing the world leaders,

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others as their enemies” insisting that government must develop the economy so as to provide

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powder given the rate of unemployment which according to him leads to revolution, and that hopeless idle hands is not only a devil’s workshop, but also a ‘tinder box’” (Folabi, 2013)

6. CONCLUSION AND RECOMMENDATIONS The implications of high rate of unemployment in Nigeria can not be overemphasised. Though there is no reliable figure indicating the rate of unemployment in the country, the fact remains that its gravity is not out of place. The paper concludes that corruption, lack of good governance, inadequate infrastructural facilities, lack of human capacity development, ineffective educational system, neglect of agriculture, the effect of globalisation process, among other factors were responsible for the high rate of unemployment in Nigeria. These factors have far reaching socio-economic and political implications for individual and households as well as the society at large. The paper therefore recommend the followings and it believes that if implemented accordingly, it will go a long way in reducing the rate of unemployment and its consequences in Nigeria. 1.

Fight corruption in all the sectors, whether private or public.

2.

Power sector is one of the most sensitive and essential sectors of the nation’s economy. This is because adequate power supply ensures a productive economy that is capable of creating significant employment to local artisans, cottage and manufacturing industries. Hence, there is need for a revolution in the power sector. If the power supply is significantly improved, many industries that have either close shops or relocated to other neighbouring countries, or collapsed, would return and commence operation or increase to full production.

3.

Government should make provision for bail-out funds for both private and public companies and industries that their collapse or closure have rendered their workforce jobless. The environment should be made conducive to make them function effectively. Government as a matter of urgency needs to address all the operational challenges and threats confronting the manufacturing sectors and other investors in the country.

4.

Agricultural sector should be given proper attention. Government at all levels should recognise the activities of rural farmers. Agricultural loans and other farm inputs such as

5.

The role of local entrepreneurs in economic development cannot be overemphasised. Hence, government should create an enabling environment for Small and Medium scale © Global Business and Economics Research Journal. Available online at http://www.journal.globejournal.org

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farming season.

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fertilizer should be released on time and be made accessible to the rural farmers during

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Enterprises (SMEs) to survive and grow. The government and private individuals should provide start-up capital in form of loan or grants to those who want to go into business and become self-reliant or self-employed and consequently employ others. 6.

The non-governmental organisation should collectively join hands with government agencies in organising seminars and workshops geared towards training the citizens to explore their environment and God-given resources, maximise their potentials so as to become self-reliant.

7.

The educational system should be made functional. To achieve this, emphasis should be laid on entrepreneurship education so that students should have acquired the basic skills needed for self-reliant before graduation, from secondary schools.

8.

Vocational guidance and counselling services should be given to students in the course of their studies in order to prepare, guide and encourage them to read courses that would guarantee them employment after graduation.

9.

There is need to allow private sector to go into the economy to help in developing the nation’s economy. Government should set standards and ensure that these standard were followed in order to regulate exploitative tendencies of the bourgeoisies and also provide an environment conducive for them to operate.

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