The Way Out Of A Demographic Time Bomb -By Bámidélé Adémólá-Olátéjú

When young people cannot find jobs and earn satisfactory income, the youth bulge become a demographic bomb ticking away. Frustrated youths are a potential source of civil unrest.

The youth bulge is a demographic bomb that can be diffused but are we ready to diffuse it? It did not sneak in on us. We should have seen it coming when vaccines made many childhood diseases a thing of the past with a fertility rate that has hovered around the 6.0 mark for over four decades. Same goes for Nigeria’s dependency ratio (the ratio of the non-working age population to the working age population). It has been on a steep climb ever since. The average per capita income has been on a consistent drop because increasing numbers of working age individuals cannot find work in productive activities. We had a glimpse of the ticking demographic bomb in the large number of applicants drawn by the Nigerian Immigration Service (NIS) recruitment exercise that led to the death of some applicants last year. Over 500,000 people applied for the 4,500 available jobs into the NIS. That same scenario repeats itself everyday, at every public or private enterprise where vacancies are advertised. Certain estimates put the number of graduates entering the labour market at about two million every year. With very limited job prospects, only a few are absorbed. When young people cannot find jobs and earn satisfactory income, the youth bulge become a demographic bomb ticking away. Frustrated youths are a potential source of civil unrest.

Given the lack of opportunities, the five life transitions of learning, work, health, family, and citizenship have been upended. With screwed up life transitions, opportunities, capabilities and second chances are equally destroyed. Without access to quality secondary and tertiary education, there are no windows to opportunities and the capabilities for making the right decisions needed to recognise and seize opportunities is lost. These are the issues facing the supply side of labour in Nigeria.

With youth unemployment hovering above 50 percent according to official data in a country reputed for cooking figures, the country is no where near diffusing this demographic time bomb and turning it into a demographic dividend. Where do we begin to address this problem? Young graduates are not job ready. Young peoole are not going into trade or technical schools. Instead, what we have are graduates who are not employable and young men who prefer riding Okada (commercial motorcycles) and selling recharge cards in traffic than learning a trade that will give them a lifetime of opportunities. Increasingly, workers from Francophone West Africa are our masons, plumbers, carpenters and electricians while our own young adults are waiting for the elusive white collar jobs that are very few. Given the lack of opportunities, the five life transitions of learning, work, health, family, and citizenship have been upended. With screwed up life transitions, opportunities, capabilities and second chances are equally destroyed. Without access to quality secondary and tertiary education, there are no windows to opportunities and the capabilities for making the right decisions needed to recognise and seize opportunities is lost. These are the issues facing the supply side of labour in Nigeria.

Unless when the government is lying with statistics, the number of jobs created in the last two decades is far less than the number needed to address key challenges, such as high youth unemployment and a ballooning labour force.

On the demand side, there is no dynamic change in Nigeria’s economic structure. A robust economic structure is essential for absorbing new entrants to the workforce. Traditionally, successful countries move from labour intensive agrarian economy towards manufacturing and then to services. On the aggregate, Nigeria has not been able to make the sectoral shift out of subsistence agriculture into industry and services successfully. Given corruption and lack of public infrastructure, only insignificant opportunities exists for employment in higher productivity jobs. Unless when the government is lying with statistics, the number of jobs created in the last two decades is far less than the number needed to address key challenges, such as high youth unemployment and a ballooning labour force.

What Must Be Done

The government of President Muhammadu Buhari must put forward a process of structural change based on Nigeria’s comparative advantage and “endowment structure” (natural resources, labour, human capital and physical capital). For the economy to succeed and provide jobs for its burgeoning youth population, this government must create a conducive environment and provide capital for those interested in investing in light manufacturing, smallholder agriculture, aquaculture and exploration of solid minerals. There is a clear role for the government in the provision and improvement of infrastructure needed to reduce the transaction costs by companies.

To achieve dynamic growth without creating unnecessary bureaucracy, the government needs to invest in hard infrastructure like transport and soft infrastructure like institutions. We have seen how soft infrastructure can improve the economy in two instances. One, a strong and independent Central Bank of Nigeria (CBN). The CBN consolidated Nigerian banks making them more viable. Similarly, with the Nigerian Communications Commission, the telecoms sector came to life. Obviously, there is a lot to be done within these institutions but they have managed two key service areas in the economy providing high paying jobs.

With urgent lifeline thrown at infrastructural development and easy credit, entrepreneurship can unleash the enormous potential of the youths, transform Nigeria and deliver the enormous dividend of this demographic.

There are a few practical steps that can be taken urgently to bring the unemployment rate among the youths down.
(A) Revamp tertiary education curriculum to include courses in entrepreneurship and small business management;
(B) Make a list of tradable goods and services imported by Nigerians from countries with similar resources like Nigeria and target them for local investments;
(C) Encourage the domestic producers already engaged in the tradable goods and services referred to above and remove the barriers to entry that can affect firms that may be interested in going into the same product space;
(D) The patent office should be revived with close attention paid to innovations by individuals and private enterprises;
(E) The government should promote industrial parks, export processing zones and free trade zones to attract local private firms and/or foreign firms that may be interested in investing in targeted industries;
(F) A tax freeze of up to ten years can be offered to domestic pioneer firms or foreign investors that are willing to work within the list of industries identified in step A;
(G) There must be transparent and equal access to credit.

The youth bulge in Nigeria, if properly harnessed, represents a great opportunity for economic development instead of the disaster it is threatening to be. It could be a great opportunity because the youth could inject dynamism, innovation and productivity into society. We have seen it happen in entertainment and it can be replicated elsewhere within the economy. This, cannot happen in a vacuum, it requires political will and a commitment to deploying policy, capital and manpower to confront the challenges facing the country’s young people. It is vital for investments to come into agriculture and food processing, health, education, power and tourism. Tonnes of economic opportunities abound for young people in technology, sports, entertainment and tourism. With urgent lifeline thrown at infrastructural development and easy credit, entrepreneurship can unleash the enormous potential of the youths, transform Nigeria and deliver the enormous dividend of this demographic.

Bámidélé Adémólá-Olátéjú maintains a weekly column on Politics and Socioeconomic issues every Tuesday. She is a member of Premium Times‘ Editorial Board.Twitter @olufunmilayo