Tackling Nigeria’s Worsening Unemployment Crisis
Bridging the financing gap for micro, small and medium scale enterprises in Nigeria will go a long way in addressing the rising rate of unemployment in Nigeria, writes Obinna Chima
The increasing rate of youth unemployment in Nigeria has remained a source concern to everybody. This has been largely seen as the major reason why there is upsurge crime and other social vices such as youth restiveness in the Niger Delta, Boko Haram menace in the north, among others in the country.
According to statistics by the National Bureau of Statistics, the rate of unemployment rose to 9.9 per cent in the third quarter of 2015, from 8.9 per cent in the second quarter of that year.
More worrisome is a recent survey by Jobberman, an online recruitment firm, which showed that about 45.72 per cent of Nigerian graduates are unemployed. According to the survey, the disturbing rate of unemployed graduates in the country is cause of concern, just as it appealed to all stakeholders in the public and private sectors to intensify training and job creation programmes.
Precisely, the survey revealed that a total of 41,032 out of the 89,755 people who responded to survey questions on the jobberman.com website said they were unemployed graduates.
“Using this survey as a representative sample for the entire employment age population, it is clear that more work needs to be done to put more people in jobs. In addition, as employers continue to complain about a dearth of skills among graduates, a massive skill acquisition programme should be put in place for graduates and more industries put in place to assimilate them,” the survey added.
Even the Emir of Kano, His Highness, Muhammad Sanusi II pointed out that the country is sitting on an unemployment time bomb, which according to him needs the attention of all stakeholders to address the situation.
The Emir, who said this while speaking the Fidelity Bank Plc’s Regional SME Conference, north, titled: “Positioning SMEs in the Northern Region for Real Sector Growth,” that took place in Kano recently, predicted that in the next 20 years, there would be 80 million unemployed youths in the country. According to him, with a population is 160 million presently, the country’s population had been estimated to grow to 250 million in the next 25 years.
“With 80 million unemployed youths, it is going to be a time bomb and a serious problem. Therefore, for this problem to be tackled, governments at all levels must be involved in finding solution to tags growing challenge of unemployment. And one of the best ways to do this is to help and encourage SMEs,” he said.
The former Central Bank of Nigeria governor, noted that in the past 40 years, Nigeria has been grappling with the challenge of high unemployment.
Focus on SMEs To the Emir of Kano, for Nigeria to come out of its present situation an also avert the looming danger; it must increase its focus on micro, small and medium scale enterprises (MSMEs). He pointed out that globally; SMEs are being supported, noting that even the United States that is a free market economy encourages SMEs to grow.
“For SMEs to succeed, government support, public-private partnership and individuals who are endowed with resources must be supported. Farmers should also be supported with seeds and fertilizers as well as with extension services and capacity building. The role of government is to provide enabling environment and infrastructure such as roads, electricity, drainages, industrial parks, and information communication technology such as internet,” he added.
He urged participants at the conference to come up with far-reaching recommendations to tackle the challenge of unemployment and lack of access to funds to SMEs. He also stressed the need for more women participation in economic activities.
“Banks should always liaise with operators of small businesses so as to find the right proposition for their business. SMEs in Kano should be encouraged and supported especially in the agriculture and commercial sectors so as to add value to the standard of living. People who run SMEs don’t hope to buy private jets or drive expensive cars, but all they want to do is to sustain their source of living and income,” he added.
Also, Prof. Murtala Sagagi of the Bayero University, Kano, expressed concern that as at 2016, the Nigerian economy is yet to be diversified. He pointed out that the only way the economy can overcome the oil shock is for both private and public sector to encourage the growth of small businesses.
“Today, we have over-relied so much on oil. But the banks are waking up because they know that the more money MSMEs make and become prosperous, their bankers would also be prosperous,” he said.
He stressed the need for firms in the country to adopt the Chinese model where firms export directly to countries in the United States and other continents.
On his part, the Executive Director, North, Fidelity Bank, Mr. Mohammed Balarabe said supporting SMEs in the northern part of the country would bring about economic empowerment and employment opportunities for a lot of youths in the north.
According to Balarabe, the continuing slide in the price of revenue shows that Nigeria cannot continue with business as usual.
“It is against this background that I believe that fundamentally the Nigerian economy is going to change and for businesses to succeed going forward, they have to be ingenious and they have to come up with new ideas as to how to engage the environment to be able to success.
“With the drop in crude oil, demand for consumer goods would change, government spending pattern and even that of corporates would also change. Thus, SMEs must change the way they seek to do business,” he added.
To the Managing Director, Borodo & Co. Nigeria Limited, Alhaji Bashir Borodo, urged government to initiate friendly policies that will encourage SMEs.
He also called for developing of the transport system across the country to ease the means of doing business.
“We need the support of our government. That is the only way we can move. One key issue for us is railway. Without good railways, production would be very expensive so our government must support SMEs, Borodo, who was a former President of Manufacturers Association of Nigeria stressed.
Similarly, the Accountant General, Kano State, Mr. Danjuma Mahmoud, who noted that SMEs generate lots of employment and they pay a lot of taxes to government, stressed the need for policies to simplify the way they pay taxes and also eliminate multiple taxation.
According to him, multiple taxation discourages SMEs, saying that governments at all levels need to streamline and eliminate the burden on small businesses.
He also recommended the issue of cluster funding and provision of infrastructure for SMEs so as to boost their productivity.
“It is not only about finance, we must create the right environment for small businesses to thrive. If we give SMEs money, and the infrastructure constrain is not resolved, the export and other challenges are not resolved, it may affect their growth. But SMEs must put their businesses on a very strong modern footing, get their accounting processes right. Don’t mix your personal money with that of the business and your family must be separated from the enterprise,” Mahmoud said.
Fidelity Bank’s Solution The Chief Executive Officer of Fidelity Bank, Mr. Nnamdi Okonkwo, described SMEs as critical agents for economic development in any nation. According to him, his bank has designed structures that would support SMEs in the country and make them profitable.
“SMEs account for about 80 per cent of businesses. There are over 40,000 micro, small and medium sacked enterprises employing over 60 million people in Nigeria. That was why as a bank, in the past three years, we have continued to increase our focus on SMEs. We have a special unit that focuses on the challenges faced by SMEs in the country and we support them by a multi-faceted approach. One of them is capacity building,” he added
Okonkwo maintained that Fidelity Bank has always supported small businesses, also said its commencement of a programme called Fidelity SME Forum where established entrepreneurs who have succeeded in business are invited to the radio station to share the story of how they started; their failures and so on, underscores the importance the bank attaches to SMEs.
“Listeners hear them and phone in to ask questions. The programme grew so large and we felt like supporting it with a conference like this. What we tend to achieve with this is to share experience and see how we can support your businesses.
“We have a balance sheet size of about N1.2 trillion. But more importantly, we love SMEs. We know that if everybody does not finance small businesses, we cannot create the new Dangotes, the new Dantatas and that is why as a bank we are saying somebody must support this sector and we have been doing that,” the Fidelity Bank boss added.