Nigeria: Aganga’s job creation initiative

Minister of Trade and Investment, Mr. Olusegun AgangaCONFRONTED with an unemployment time bomb, the Federal Government appears clueless on how to reverse the precarious trend. It proved this once more when, earlier this month, the Minister of Trade and Investment, Olusegun Aganga, rolled out a new scheme that he said would create 3.5 million jobs in two years. But not only does the scheme appear to be of doubtful viability, there is, sadly, nothing in the track record of this government to inspire optimism in its implementation.

While any new initiative to reduce the current official unemployment down from 23.9 per cent is welcome, such measures should only complement robust macroeconomic policies that will provide infrastructure, diversify the economy and boost the real sectors of the economy. The National Enterprise Development Programme that Aganga unfurled comes nowhere near this target. According to the minister, the scheme will be driven by a Small and Medium Scale Enterprises Council, comprising the federal, state and local governments “to streamline and harmonise all SME development activities across the country.” It will be spearheaded by the ministry, the Bank of Industry, the Small and Medium Enterprises Development Agency and the Industrial Training Fund. The minister believes that NEDEP will enable it to stimulate 3.5 million jobs “within the next two years,” citing the success of similar enterprise development models in unnamed Asian and African countries. But he said the ministry was partnering 17 state governments to provide specialised training and access to low-interest funds to SMEs, while a monitoring unit would verify data relating to the number of jobs created through NEDEP.

It is unsurprising that the programme, like other ill-fated ones before it, is fatally flawed. The problems of the Nigerian economy are structural and unless some fundamental distortions are simultaneously addressed, schemes like NEDEP can only create additional bureaucracies, consume scarce resources, and achieve little. First, the government misses the point by seeking to “create jobs.” It is now a settled economic fact that without corresponding infrastructure and social services, especially a sound education policy, it is almost meaningless for the government to be throwing money around in the name of job creation. The International Labour Organisation says no decent work strategy can be successful without encouraging entrepreneurship, innovation and productivity. Organised private sector and our international development partners have also persistently said that government should take a back seat and restrict itself to policy, allowing private capital a free rein to take charge of business, including the commanding heights of the economy. Its priority should be getting the power sector privatisation right by ensuring that only reputable international firms take majority stake in the state’s power generating and distribution units. SMEs cannot thrive without reliable and affordable power.

The 2012 Enterprises Baseline Survey produced in collaboration with SMEDAN showed that there are 17 million SMEs in the country employing about 45 per cent of workers and contributing almost half of our Gross Domestic Product. SMEDAN estimates that the Nigerian economy cannot grow, maximise export potential or industrialise until 80 per cent of the labour force are engaged in SMEs.  Like the Youth Enterprise With Innovation in Nigeria that President Goodluck Jonathan launched with fanfare last year, unless the stock of national infrastructure is increased, job creation will remain marginal. The Economist magazine of London estimates that 18,000 jobs will be created by $1billion of new investment in the United States. Up to 10 times more can be created in Nigeria with the same amount with new investment in mining, according to the OPS.

The government should urgently license global firms to exploit our solid minerals, transparently privatise the remaining steel plants, power plants, refineries and other downstream oil and gas assets. The National Assembly should repeal the Railway Act of 1955 to open the floodgates to foreign direct investment in that sector. Truly, liberalising the downstream petroleum sector and selling off the four moribund state-owned petroleum refineries to reputable operators will enable us to maximise the production of hydrocarbon derivatives for export and to boost local industrial activities.

Time is running out. Tokenist measures like NEDEP, YouWin and the National Directorate of Employment only create new cost centres without mopping up the 42 per cent of our youths that are, according to the Labour Ministry, unemployed. The Central Bank of Nigeria data that showed unemployment rising from 4.3 per cent in 1970 to 6.4 per cent in 1980 and averaging 14.6 per cent in 2006 to 2011, should be reversed. But it cannot be by the 110,000 jobs in three years targeted by YouWin, while the 28.14 million unemployed youths cannot be accommodated by the bogus target of NEDEP.

As it gives way to the private sector in the critical economic sectors, the federal and state governments should invest massively in highways, rural infrastructure, health, water supply, environment, education and women empowerment.

Aganga will do better to initiate policies to streamline investment, business transactions and exports. These will create more jobs than the palliatives he so enthusiastically promotes.

Anthony-Claret Onwutalobi
Anthony-Claret Onwutalobi
Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC and CEO of Portia Web Solutions. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.

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