CHAPTER ONE
INTRODUCTION
1.1
Background of the Study
There
is no doubt that unemployment is one of the major challenges facing economies
of the world (developed and developing). This exerts more distorting impacts on
the developing economy. According to Ekpo (2008), a developing economy such as
Nigeria’s is faced with poor growth performance which manifests in the rising
incidence of poverty, massive graduate unemployment, skyrocketing inflation,
worsening balance of payments disequilibrium, monumental external debt burden,
widening income disparity and growing fiscal imbalances, which taken together
can be said to constitute major causes of underdevelopment. In all, rising
graduate unemployment poses the most pervasive and devastative effect which threatens
the productivity of the Nigerian economy (Ake, 2010).
Graduate
unemployment is defined as the unemployment among people with academic degrees.
It is a situation where tertiary institution graduates do not get jobs after
going through the academic ladder successfully. It is the greatest component of
aggregate unemployment. According to the International Labour Organization
(1982), the unemployed are persons that are available and willing to work but
without work in the past 39 weeks. One is forced to ask how many Nigerians are
willing and available to work but are currently without job. On the other hand,
Frank and Bernard (2001) noted that the rising unemployment rate in a nation is
too significant to be ignored as it is necessary in assessing the level of
economic activity in such nations. Thus, besides real GDP, unemployment and
growth in labour productivity remains economic statistics that receives a great
deal of attention from both economists and the general public.
The
unemployment rate is a sensitive indicator of the conditions of the labour
market. When the unemployment rate is low, jobs are secured and relatively
easier to find. Low unemployment is often associated with improving wages and
working conditions as well as employers competing to attract and retain
workers.
In the
recent past, Nigeria has experienced low labour demand and productivity, a sign
which is widely blamed on the failure of government policies and programmes
over the years. Specifically, since the mid 1980s, there has been an alarming
increase in the rate of graduate unemployment, low labour productivity and its
attendant’s social and economic consequences. Just like some other developing
nations in Africa, the Nigerian government and policy makers are increasingly
finding it difficult to deal with graduate unemployment successfully.
1
The high rate of graduate unemployment in Nigeria
according to Adeyeye et. al. (2012), can be associated with lack of
adequate provision for job creation in the development plans, the ever
expanding educational growth and the desperate desire on the part of youths to
acquire tertiary education irrespective of the social and economic reality.
Consequently, a number of skills acquired from these tertiary institutions
appear dysfunctional and irrelevant since most of the skills and knowledge
acquired in tertiary institutions are kept redundant through unemployment and
sometimes skills are not fully utilized.
On the other hand, as the graduate
population in Nigeria increases without being absorbed in the active market,
labour productivity does not increase at its full potentials, this could be as
a result of the failure of government to control this phenomenon over the years
in spite of numerous programmes and policies on this issue. Without denying the
impact of other factors, unemployment has exacerbated social ills and
delinquent behavior among youths (most of whom are graduates) especially armed
robbery, political thuggery, advanced fee fraud and the recent spate of
terrorism (Boko Haram) in Nigeria, which has been on rampage for the past 4
years, forcing the government to be spending a lot of money on crime control.
Recent statistics released by the National Bureau of Statistics (NBS) showed
that about 10 million Nigerians were unemployed. In fact, this number swells by
120,000 graduates each year, which are produced with little or no jobs waiting
for them. (NBS 2009).
In a bid to address the menace of
unemployment, various policies have been put in place by the Federal Government
of Nigeria. Notably, the Small and Medium Enterprise Development Agency of
Nigeria (SMEDAN) was established in 2003 to promote the development of Micro,
Small and Medium Enterprises (MSME) sector of the Nigerian economy. It is to
source, process and disseminate business information, develop policy, establish
business support programmes, build capacity and promote services, enhance MSME
access to finance. Others are the Nigerian Agricultural Co-operative and Rural
Development Bank (NACRDB) Limited which is dedicated to financing agriculture
at both micro and macro levels. They are to provide affordable financial and
advisory services to the farm and non-farm enterprises of the Nigerian economy
using well trained and highly motivated staff, backed by appropriate
technology. Those that were established but later scrapped include: the
Directorate for food Roads and Rural Infrastructures otherwise known as
(DFRRI), Mass Mobilization for Self Reliance and Economic Reconstruction
(MAMSER) and the National Agricultural Land Development Project (NALDA). These
were created by the Babangida regime but scrapped by the Abacha regime.
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