MONEY MATTERS: Job creation

One of the principal challenges facing us in Nigeria today is job creation - how to create jobs, commensurate with their skills, for Nigerians who are willing and able to work. If we do not address this problem urgently it is likely to get more severe because about half of our population of 150 million people is under 18 years old.

In tackling this problem, we must start with our educational system. A large number of people have argued that we need to spend more on education. Whilst I agree with this view, I also advocate that we try to better understand the skills that prospective employers require and direct our spending towards helping our students to acquire these skills.

Local and state governments should focus on primary and secondary education respectively. The FGN can support them through conditional grants channeled through the Universal Basic Education scheme. The federal government should direct the bulk of her spending towards funding trade schools and tertiary education.

We need to reform existing trade schools and establish new ones that will churn out skilled mechanics, electricians, plumbers, masons etc. In addition to teaching students in these schools the technical skills relevant to their trades, the curriculum must include business management and basic computer skills. This is because a large number of these people will end up running small and medium scale businesses of their own and these skills will enhance their ability to succeed. Graduates from these schools who want to establish their own businesses should be helped to raise capital.

The curriculum of our universities and polytechnics should also be revamped. The goal is to improve the breadth of education we provide in these institutions. This should be done in consultation with employers drawn from the key industries in Nigeria. We might discover that no matter what degree a student is pursuing, it is important to learn business ethics, basic computer skills and a bit of social science. These are some of the skills that will hold our graduates in good stead in later life.

All modern economies compile data on employment in their countries. These include number of jobs created, number of jobs lost and the unemployment rate. They form an integral part of core economic data published regularly (monthly or quarterly). Why don’t we publish these data regularly and actively help the unemployed to get jobs? Maybe it is because our government does not pay unemployment benefits to her citizens.

In periods of recession, businesses reduce production and lay off workers. Unemployment attributable to these changes in the business cycle is called cyclical unemployment. When people are unemployed because they are moving in between jobs it is called frictional unemployment whilst unemployment attributable to the fact that workers lack the necessary skills needed for jobs available is called structural unemployment. It is very important for government to keep unemployment data because this will help them know the reasons why people are unemployed. Government can then actively find solutions to the problems of the unemployed.

The bulk of the unemployment in Nigeria is attributable to the fact that we are creating employees faster than new jobs. Therefore, population control must be a part of the solution. We must find ways of making this politically acceptable in Nigeria. In addition to population control, we must recognise that the number of people that the public sector can employ is limited and that it is the private sector that can help reduce this problem significantly.

What does the private sector need before it can create jobs? Infrastructure - electricity to power their businesses, roads and railways to transport their products. We are back to the same issues again. I believe that at every opportunity we need to stand on the rooftop and tell the government that we do not want her to provide us with electricity!

All we want her to do is to allow the private sector businesses to do this and government to charge companies’ income tax on their profits, personal income tax on the salaries of those who work in the industry and VAT on spending by the end users of this product. This will help all the three tiers of government boost their tax revenues and reduce their dependence on oil revenues. They can also use part of the tax revenue to help the poor access electricity.

Is this so difficult to understand or are there ulterior motives?