These six sectors are crucial for Nigeria to tackle unemployment
Nigeria has a major unemployment challenge as unemployment rate rose steeply from 3.6% in 2006 to 23.1% in 2018. Nigeria’s population is expanding at 3.2% per annum. Data from the NBS show that an average of 4.8 million Nigerians entered into the labour market from 2015 to 2018, while the economy has created less than 1 million jobs per annum since 2015. This jobs deficit as well as the growing entrants into the labour market are major concerns for the economy. Unfortunately, the pace of growth of private sector investment does not match the number of jobs required. How can Nigeria address its unemployment challenge; what are the key sectors with propensity to employ individuals and what policy measures are required to address this problem?
In tackling this challenge, six sectors are crucial, given their significant share in employing the labour force; their contribution to GDP as well as their associated forward and backward linkages. The sectors include Manufacturing; Construction, Trade, Education, Health and Professional Services. Across these sectors, there is need for sectoral opening and expansion, identification of new opportunity areas and pursuing diversification and value-chain development. The government must remove the constraints limiting competitiveness in these sectors.
There is need for a nexus between government policies and how markets work. The behaviour of government institutions and the policy environment is crucial. For instance, the incentives for regulators such as NAFDAC, SON, Customs, etc, should be support and grow businesses so that they can expand and create more jobs, rather than view businesses as revenue generating entities, thereby, imposing undue levies and charges on these businesses. According to the NESG, “to take advantage of the benefits of having a young, large and vibrant workforce, the private sector must step up, particularly in the area of job creation and new investments. However, such commitment cannot happen without significant government involvement in setting the agenda for overall economic expansion and guiding the process. Government policies, actions and plans must be growth-enhancing, recognising the crucial role of private sector investments in job creation, economic growth and by extension the overall welfare of the state”.