The National Bureau of Statistics (NBS) recently published the unemployment rate for 2020 and below are some of the insights gleaned from reports:
- Nigeria’s youth were the worst hit with over 13.9 million people aged between 15 and 34 years unemployed.
- Graduates and postgraduates combined made up about 2.9 million of the total Nigerians that are unemployed.
- Of the 35.5 million Nigerians that are fully employed, 22.2 million did not attain tertiary education level and 6.29 million of them never attended school.
- Vast majority of fully- employed people in Nigeria (13.2 million) have only Senior Secondary School certificates.
In conversation with my friends, Temi and Akanimoh (Akay) – we decided to discuss the possible drivers of youth unemployment in our dear country.
Akay and I were on the same side of the fence, arguing that our poor education system is a major contributor to the growing youth unemployment rate. Temi on the other hand argued that she didn’t think education was a key driver. After all, she completed her entire studies in Nigeria as did Akay, and they are both climbing successfully through their career ladders in corporate Nigeria.
According to her, rather, the problem is the unavailability of jobs due to poor macro-economic conditions and unfair labour laws that tend to favour expatriates over local talent. Temi was not wrong about this, but she assumed that she was representative of the average Nigerian graduate. I and Akay argued that, while there may not be a plethora of job vacancies as we would like, it doesn’t’ change the fact that there is a skills mismatch in the demand and supply of employment due to poor quality of education.
From the insights noted above, it’s unclear if the high number of unemployed graduates is a result of the mismatch of skills or unavailability of jobs. However, the number of fully employed people with no education and no tertiary also begs the kinds of jobs that are largely available.
According to the Corporate Finance Institute, there are four types of unemployment:
- Demand Deficient Unemployment: When there is a reduction in the demand for employment due to macro-economic factors
- Frictional Unemployment: when macro-economic conditions are stable, and workers are moving between jobs
- Structural Unemployment: when there is a mismatch in skillset or limited geographical mobility
- Voluntary Unemployment: when an employed person leaves their job for various reasons such as inadequate financial reward.
Based on the above definitions, suffice to say that, myself, Temi and Akay were right. It would appear that the main types of unemployment in Nigeria are Demand Deficient and Structural Unemployment based on the poor macro-economic conditions and skills mismatch in demand and supply respectively.
With the disturbing statistics, the big question is, which of these interventions should come first to change the youth unemployment trend or at least curb it?
- Create more unskilled jobs for a poorly educated youth population?
- Invest in the education sector (secondary and tertiary as priority) to curb the trend of mismatched skills?
- Invest in capacity building interventions to address the current human capital deficiency in the labour market?
If we truly are to earn the dividends of our youthful population in this country, then it cannot be business as usual.
As I noted in my last article – “If your country won’t do it for you, then do it for yourself and the future of your country”. But late Nelson Mandela put it even better “Young people must take it upon themselves to ensure that they receive the highest education possible so that they can represent us well in future as future leaders.”