Job Creation in Nigeria

Job Creation in Nigeria: lessons from Bangladesh, Cuba, Switzerland and India.

Princewill Ojong Odidi

Unemployment is a not a new phenomenon, in some societies it is man made and can easily be resolved by man made job creation policies, in some other societies, it is a product of failed economic policies, and in others it is a reflection of the demand supply price mechanisms and how they relate to interest rates and investors motivation hiring for increased production.

In Nigeria today, unemployment is primarily a function of failed government policies, an underfunded failed educational system that produces unskilled and unemployable graduates, and a failed political class whose vision of Nigeria has been blurred by ethnicity, tribalism, parochialism, institutionalized corruption and a replacement of merit with sycophancy and mediocrity in all levels of government.

In the developed world, economics is treated as a science in the proper sense of the word. A rise or reduction in bank interest rates affects production which in turn reflects in consumer behavior, market prices, spike in jobs gains or job loss. However, this does not seem to apply to the Nigerian economy, an economy devoid of scientific economic data, and which cannot be determined to be a market driven economy. Some of the peculiarities of our society and economy are the relationship between the developments of infrastructure to job creation and excessive government involvement in the economy, not necessarily as a regulator but also as an active participant. Let’s take a look at some policies in some developed and developing countries and the extent to which they succeeded, and how if possible, how Nigeria can learn from them.

Cuba: Cuban medical internationalism is the Cuban program of training young Cubans as medical doctors and sending them overseas, particularly to Latin America, Africa and, more recently, Oceania and of bringing medical students and patients to Cuba. Cuba provides more medical personnel to the developing world than all the G8 countries combined. It is widely believed that medical workers are Cuba's most important export commodity. While in Nigeria, our most important export commodity is crude oil which has greatly been mismanaged. It has also been suggested that Cuban medical internationalism promotes exports of Cuban medical technology, and is a source of hard currencyfor the state. In 2012 Cuba's earnings from medical services (including export of doctors) amounted to 38% of total export receipts and net capital payments.

A Nigerian State government can decide to adopt a similar policy, invest in human resource as a means of reducing unemployment, increasing the states earnings and developing a new middle class. As an example, if beginning 2015, Cross River state decides to sponsor two thousand students into medical career training yearly, in the next ten years, we would have produced twenty thousand medical personnel. If this policy is sustained, in the next two decades, one in every 2 or 3 medical Doctors in Nigeria will be a Cross Riverian. These Doctors will in turn represent a new middle class in the state thus reducing poverty and joblessness. For a policy like this to work, it has to be carefully thought out and implemented with little or no political interference with regime changes. However, investing in a policy like will inevitably imply that other sectors may be deprived funding. This is a long term human resource investment option for a resourceful State, in the event two decades from now, oil, as a source of economic dependence is no more.

Bangladesh: Bangladesh like Cuba, have little or no natural resources. As a matter of state policy, they decided to invest in the textile industry and training their vast unemployed youths as tailors and garment makers. Today, the textile and clothing industries provide the single source of economic growth in Bangladesh's rapidly developing economy. By 2010 exports of textiles, clothing, and ready-made garments (RMG) accounted for 77% of Bangladesh’s total merchandise export. A job creation policy of this sort will readily work in Nigeria. The administration of President Jonathan has recently built some work stations called “skill development centers, however, there’s no specific workable program on how to use these centers to reduce unemployment other than mounting a few computer work stations in a building and calling it “skill development centers”. Skill development without a definite national working plan on how many people to train yearly, the specific sector to promote training, plan to integrate the trained into long term economic plans, and how this chosen sector fits into the nations larger development plans is designed to fail.

Bangladesh with a population of about 156 million has the highest population density in the world. This Country has a similar population like Nigeria, while 45% of their youths are actively involved in the textile employment; over 45% of Nigerian youths have no hope of ever being employed if only they are employable. Thanks to the state of our educational system. However, a Nigerian state can adopt a similar policy in addressing unemployment and job creation. Imagine the number of Uniform services we have in Nigeria ranging from the Nigeria Police, Army, Navy, Customs, Air force, Civil defense, youth Coppers and many more whose uniforms are sewn overseas.

A Nigerian state that decides to develop an industrial complex built around the design and sewing of garments would be able to attract all this state agencies and jobs to sustain the industry. In addition, there’s a large garment industrial need in Africa and the United states currently dependent on the Asian garment industry. While State governments are not good business managers, however, a state can create the enabling environment including subsidized loans or public private partnerships to jump start projects of this nature in job creation.

Switzerland: Switzerland has little or no natural resources like Cuba, or Bangladesh. Over 70% of her populations are involved in the services Sector. The economy of Switzerland is one of the world's most stable economies. Its policy of long-term monetary security and political stability has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment. The Nigerian economy has shown signs of developing as a service economy, however, due to the high number of unemployable graduates in Nigeria, some of the dominant skilled service sectors like oil and gas, has rather resorted to hiring foreign technicians who come to Nigeria and call themselves engineers and turn around to boss and train our local Nigerian engineers.

The success of the Swiss Economy is a classical example how good policies can transform an economy if properly managed. The Swiss has few manufacturing companies including the export of value watches, have little or no natural resources, yet their investment in the service sector has made them one of the countries of the world with lowest unemployment. To develop and compete in the service economy, the Nigerian state would need to identify a niche in the economy, train her people to fill in the vacuum, express a great amount of economic policy consistency, economic policy discipline, and invest in her educational sector. The Nigerian state should invest in the University system to ensure that graduates are employable, rather than spending huge sums of state funds to finance entrepreneurship workshops, computer training, post college graduation and development of skill acquisition centers with no specific design on how to sustain it.

BPO- India and South Africa: Business Process Offerings commonly called BPO’s is the outsourcing of business operations and responsibilities of specific business functions to a third party provider. It is also called back office functions such as human resources, finance and front office outsourcing. Business process offerings are largely built around an effective information technology based economy. India commands over 63% of the offshore component of business process offerings in the world.

Countries that are currently benefiting in this scheme are countries that invested in information technology networks. This explains why the bulk of customer service calls made in the United States and Canada are routed to call- centers in India. The introduction of IT call centers in India has greatly reduced unemployment in that country. BPO’s are services that moved from first world countries to third world countries resulting to increased profit line due to the low cost of labor in developing economies. Effective and efficient broadband internet technologies, plays a dominant role in the success of this industry.

While Nigeria has more than enough broadband capacities from several submarine cables at the shores of the country, yet less than 10 percent of the total broadband capacities from the three cable operators is being utilized in a country of over 160 million people. As Ms Funke Opeke of Main One cable recently opined in the Nigerian Guardian published august 14^th, 2013,, “that broadband capacities utilization remain low in Nigeria because of the high cost paid by consumers”. Comparing Nigeria with other African Countries, Ms Opeke further states that “Kenya and Tanzania have gone far in internet access penetration because the government of those countries built a nationwide infrastructure backbone and allowed the private sector to run it at a determined low cost and that every internet service provider has equal access to available broadband capacities. However, in Nigeria, rather than follow the Kenya-Tanzania example, every cable company is building her own broadband infrastructure and fixing prices arbitrarily which in most cases are very high because the operators have to add the cost of building their own infrastructure backbone”. As a business model, this is unthinkable, highly inefficient and unproductive.

One major problem we have with job creation in Nigeria today is that the government has not been able to figure out the link between better and affordable internet services and job creation. The government has not been able to figure out that there’s a relationship between infrastructural development and job creation. This explains the lackadaisical attitude state governments have with executing projects to completion. With better affordable internet, we can tap into the business process offerings market like India, Pakistan, and Countries of Eastern Europe. If the Nigerian government come to realize the amount of employment that will be generated if the government takes on the financing of a nationwide infrastructure backbone and make internet and phone calls affordable, then unemployment certainly become a thing of the past in Nigeria. While our government officials are busy scouting around the world looking for International investors to come to Nigeria, they fail to understand that when investors talk about favorable conditions of investment, one of their major concerns is the affordability and availability of internet access and how it relates to their end product.

In summary, unemployment in Nigeria remains a function of failed state policies, an underfunded failed educational system that over the years has produced unskilled and unemployable graduates, coupled with a failed political class whose vision of Nigeria has been blurred, the prevalence of institutionalized corruption and a replacement of merit with sycophancy and mediocrity in all levels of government and policy initiation

All hope is not lost, as a people, so long as we can identify the problem, then there’s a solution. With the emergence of the right leadership and patriotic economic policy framers and infrastructural and educational development there are better days ahead.