The job market in Nigeria continues to swell despite government promises to transform the economy by creating new jobs
President Goodluck Jonathan excited many Nigerians, especially the unemployed, when he declared that job creation was at the centre of his Transformation Agenda. Jonathan added that the agenda would completely transform the entire economy, thereby propelling a veritable road map for leading the country to economic haven. However, a year after, Nigerians are yet to see any step that could lead to job creation. Instead, Nigerians have been witnessing sack gale in both public and private sectors of the economy.
For instance, the series of mergers and acquisition in the banking sector, which is part of the reform embarked upon by the Central Bank of Nigeria, CBN, since 2009 has brought untold suffering to many workers in the sector. The latest is the sacking of about 550 workers by First City Monument Bank, FCMB, shortly after it acquired FinBank. That, according to FCMB, is about 30 per cent of the workforce of the acquired bank. Last year, most of their counterparts in the former Oceanic Bank were not so lucky. The management of Ecobank, which acquired the bank, sacked over 4,000 of them. Similarly, Access Bank, which took over Intercontinental Bank, sacked about 1,500 former employees of the acquired bank. Enterprise Bank Limited and Mainstreet Bank also contributed to the swelling unemployment market in Nigeria, sacking between 150 and 250 respectively soon after they were nationalised.
The sack gale was not limited to rescued and nationalised banks. Zenith Bank also disengaged about 240 of its senior staff last month. The bank said the affected workers were asked to leave to reduce the company’s wage bill because the bank had too many senior employees in its workforce.
Aside from the banking sector, other major sectors of the economy also experienced the season of job losses. Tens of thousands of professionals in telecoms, aviation, manufacturing and public sectors lost their jobs. For instance, in the telecoms sector, about 3,000 Nigerians almost lost their jobs in the customer care centres of Airtel but for the timely intervention of civil society groups and the National Assembly. The workers were to be laid off despite the fact that Nigeria’s telecommunications sector is widely acclaimed to be one of the fastest growing in the world. Pyramid Research, a London-based study group, projects that the sector is expected to grow by 5.9 per cent between 2011 and 2016.
In the manufacturing sector, it is estimated that over two million people lost their jobs between 2001 and 2010. According to a survey conducted by the Manufacturers Association of Nigeria, MAN, the sector’s employment declined from 2.7 million in 2001 to 866,395 in 2010. Kola Jamodu, president, MAN, traced the development to dismal power supply, high fluctuating industrial fuel pricing, and inconsistent policy regimes, among other factors. The industrialist also blamed the job losses on fiscal and monetary trends in the country, the challenge of insecurity, infrastructure, multiple taxes and levies. He added that Nigeria’s clear dream to become one of the top 20 economies in the world would be a mirage unless a virile manufacturing sector was created and sustained.
Jamodu urged government to build refineries through public-private partnership, PPP; reposition all export-related agencies to take further stimulus measures and truly support industries to expand export with a view to offsetting the faltering domestic demand; accelerate current efforts to improve infrastructural facilities, in particular power supply, road, railway rehabilitation; and active support for the use of waterways. He also canvassed the need to speed up the formulation of a national gas pricing policy that would guarantee supply to industries at reasonable and stable price, a restructuring of the tax system to abolish the prevailing regime of plethora of taxes and levies by the three tiers of government, and redress the upward swing in inflation, foreign exchange and interest rates.
Job losses in the aviation sector are attributed to the poor state of the country’s carriers. “Our scope has also been limited by poor infrastructure and our inability to successfully manage public private partnership,” said an aviation expert. Another development that shocked many Nigerians is a recent recommendation by the Presidential Committee on the Rationalisation and Restructuring of Federal Government Parastatals and Agencies headed by Steve Oronsanye, that about 28,000 civil servants be sacked in order to reduce the recurrent expenditure in annual budgets of the federal government. The committee was given the mandate to trim and reform the federal civil service in line with government’s promise to bring down its recurrent expenditure and increase capital vote.
No doubt, the sack gale across various sectors has contributed to the increasing number of jobless people in the economy. According to data released by the National Bureau of Statistics, NBS, the unemployment figure grew from 12.44 million in 2009 to 13.9 million in 2010 and further to 16.74 million in 2011. In 2012, the figure had already increased from 16.74 million to 39.28 million, which represents about 134.6 per cent rise. Experts say the increase is alarming because it is a far cry from the expected rate and attribute it to the rising poverty rate in the country, which NBS confirmed make about 100 million Nigerians live on less than $1 per day. NBS also revealed that an average of 1.8 million people enter the labour market every year but only 10 per cent of them smile home with jobs.
The gross domestic product, GDP, witnessed a growth rate of between seven and eight per cent over the last couple of years. With this, the nation’s economy has demonstrated it can be one of the best economies in the world. For instance, last year, NBS confirmed that the GDP posted a robust 7.25 per cent growth rate, which surpassed the global and regional average of three per cent and 5.2 per cent respectively. Ironically, status of Nigerians keeps sliding further into poverty, not just because of the soaring double-digit inflation, but also owing to the fact that growth in the economy has not been impacting on an average people by way of job creation.
Not a few Nigerians are worried about the increasing unemployment in the country but reasons for job losses differ from one institution to another. In the case of FCMB, the bank attributed the development to the unprofitable state of some branches of the acquired bank and the proximity of the branches to some FCMB branches. Kenny Aliu, group head, corporate communication of the bank, explained that the bank took the decision when it realised it could not absorb all the staff of the acquired bank. He further linked the sacking of those workers to appraisals in their files before the acquisition took place, promising that the disengaged workers would be adequately compensated with attractive packages.
However, one of the victims linked the situation to unrealistic deposit targets set by the bank. The targets, he said, range between N500,000 and N1 million for lower cadres staff, including those who were not in the marketing department. He added: “We were directed to prevail on customers not to withdraw from their accounts, particularly between December 2011 and last January or be ready to lose our jobs.”
Given the number of job losses in the banking sector, it is widely believed the reforms introduced by the CBN lacks focus, especially as it affects jobs. Sunday Salako, national president, Association of Senior Staff of Banks, Insurance and other Financial Institutions, ASSBIFI, described the reform exercise as an ill-wind because the implementation was wrongly handled. Salako who confirmed that about 10,000 of his members have lost their jobs since 2009, explained that the exercise has subdued productive ventures, which he belief should have created employment and contributed to poverty reduction. “A lot of damage has been done to the financial system. Nigerian banks are currently worth half of their real values,” he said.
Similarly, over the years, the federal government has not paid much attention to the growing number of unemployed people. For instance, in the 2011 budget, the government introduced the National Job Creation Scheme with a take-off allocation of N50 billion. But the concern is why attempts by government at creating jobs have not yielded the desired results. Oscar Odiboh, a marketing communications consultant, attributes this to lack of political will, corruption and strategic indiscipline on the part of the authorities. According to him, setting up committees and creating employment bureaus do not translate to employment. “They signify the intention of the government to recycle old ideas without the will to create new paths,” he observed. Job losses in the aviation sector are attributed to the poor state of the country’s carriers. “Poor infrastructure has limited operational scope. Our scope has also been limited by our inability to successfully manage public private partnership,” said an aviation expert.
As once observed by Nasir el-Rufai, former minister of the Federal Capital Territory, the unemployment rate in the country is a clear case of lack of policy focus. According to him, the N50 billion provided in the 2011 budget for job creation was a gimmick. He explained that raw cash does not create jobs, but only entrenchment of consistent and right policies and frameworks with regulatory environments do. He wondered why the federal government should borrow just to pay public sector wages while spending on capital projects that would create direct jobs and the environment for indirect jobs remain critically underfunded.
Femi Oyekan, a financial analyst, dismissed the growth rate of the country’s GDP, insisting that it does not translate to creating jobs. He therefore wonders like several other Nigerians what drives the growth, adding that Nigerians should be disturbed by such developments if it is true that the economy is growing at seven per cent while unemployment rate is growing by 23.9 per cent. “I believe more of the unemployed are youths. This is a time bomb that will soon explode,” he predicted.
Economic experts have since observed that it is small businesses and entrepreneurial firms that account for almost 70 per cent of jobs in most economies. But in Nigeria, numerous hurdles scare people from doing business in the country, which stifle the development and growth of crucial sectors. These include lack of infrastructural facilities, especially electricity and transport, a dysfunctional and corrupt public service that frustrates businessmen and lack of credit to the productive sector. Under this kind of environment, small and medium scale businesses hardly survive. In all, the worry is whether the federal government through its Economic Transformation Agenda will be able to lay a solid foundation for agriculture and manufacturing as means of creating jobs.