CHAPTER ONE:
INTRODUCTION
1.1
Background to the Study
Employment
creation is one of the major macroeconomic objectives of any society,
especially labour abundant economies. A gainfully employed labour force and
active population have high potentials to contribute to the growth of national
output for the promotion of economic development (Englama, 2001). According to
ILO (2009), 5.7percent of the world’s labour forces were unemployed and looking
for work in 2007. This figure increased to 6.0percent in 2008 and 6.1 percent
in 2009. Thus, 212 million people were unemployed in 2009 (ILO, 2010); an
increase of 32 million over the 180 million people that were unemployed in
2007. Although the projected figure in the level of unemployment is a major
global challenge, the potential increase in vulnerable employment is even more
alarming. It is estimated that half of the global workforce – 7 times more than
the number of unemployed – were likely to be in vulnerable employment in year
2010, highlighting the urgent need for policies to address the substantial
decent work deficits.
The major
concern about this is that more than 1.4 billion workers are living below the
USD 2 poverty line in 2009, an increase of more than 200 million since 2007
(ILO, 2010). Across all these scenarios, the number of
working poor is projected to grow in 2010 at about 1.5% per annum (ILO, 2010).
According
to Englama (2001), unemployment is not a new thing all over the world. The
problem has been in existence even during the time of classical economists (the
first economic thinking before 1930s).Their simple solution was that once wages
and prices were sufficiently flexible, the economy would always be at full
employment state because the demand for labour would always be equal to the
supply of labour at the ruling real wage rate. Their view was proved wrong by
the Keynesians who claimed that unless government intervene in economic
activity, unemployment will persist. Thus, one can see that unemployment
problem is not new in the world over, but this posed no serious challenge in
the Nigerian economy until the early 1980s.
In
Nigeria, the problems of unemployment and low productivity growth are twin
challenges that have been facing the economy, but early signs of employment
problems started unfolding as early as the 1960s. Nevertheless, the country was
still able to provide jobs for its teeming population and some expatriates till
the 1970s (CBN, 2001). In 1960, at the time of independence, Nigeria was
heavily dependent on agriculture for the provision of employment
for
its citizens. Agriculture provided jobs for more than 60 percent of Nigerians
(Akpan, 2001 and Usman, 2008). Employment in agriculture was mainly in the
rural areas, while in the urban areas, employment was mainly from the civil
service and the industrial sector. The dimension of the employment problem was
quite different in those early years of independence. The major manpower
problem facing the economy then was shortage of skilled labour. It is a paradox
that today, graduate unemployment has become a major problem. An appraisal of
the national development plans which dates back to the 1960s reveals major
efforts of government on how to provide the high-level manpower needed for the
time to replace expatriates (Damachi, 2001). The efforts started with the
establishment of the National Manpower Board (NMB) in 1962. The major function
of the board then, was to deal with the problems of manpower shortage of the
period. The national development plans from 1962 to 1985 are other efforts by
the government. Unemployment became more endemic in the 1980s, as the rate rose
from 4.6 percent in 1976 to 6.4 percent in 1980. Unemployment in this time,
stemmed from the mass migration to the cities in the 1970s when the oil boom
made rural dwellers seek white collar jobs in the urban areas. Following the
oil glut and the consequent downturn in the economy in the 1980s, the problem
of unemployment started to manifest.
Despite
the fact that from 1960s to early 1980s, the various development plans of the
Nigerian economy incorporated employment policies to prevent its manifestation;
it was observed that government also put in place some sectoral policies as
preventive measure in notable sectors as education, agriculture and industry;
yet unemployment persisted (Damachi, 2001). In the case of Education, Ayodele
(2003), Ajetunmobi and Ayanwale (2004), Oloni and Omoniyi (2008) and Borishade
(2001) observe that tremendous results have been made. Ihimodu (2008) observes
that there were impacts being made in the agricultural sector. Damachi (2001)
explains that agriculture has traditionally been up to the task in the
provision of employment. In the industry, not much success has been made
despite the various policies and incentives put in place especially in
employment generation (Akpan, 2001). The government has put in place some
fiscal incentives like manipulation of tariff rates, sales and company tax, and
other factors used to protect infant industries to improve manufacturing
performance.
The
major downturn in the economy due to the oil glut in 1980s precipitated the
establishment of the Structural Adjustment Programme (SAP) in
July 1986 partly to enhance employment1. This programme had serious
implication on the unemployment in the country. Under the SAP, the National
Directorate of Employment (NDE) was established in November 1986.
The
objective of NDE was to promptly and effectively combat unemployment by
designing and implementing innovative programmes, which are directed towards
the provision of training opportunities through the guidance and management
support services to graduate farmers and small scale entrepreneurs. The aim of
the agricultural programme under the NDE was to generate employment for
graduates, non-graduates and school leavers in the agricultural sector, with
emphasis on self-employment in agricultural production and marketing
(Okebukola, 2001; Akintoye, 2008). The programme was monitored by a team of
agricultural professionals in the agricultural department of the directorate
(Akintoye, 2008). Chinedum (2006, cited in Akintoye, 2008) however felt that
factors like inadequate funding and late release of funds from the Federation
Account among others, are seriously militating against the effective running of
this programme.
Another
government policy directed to attack unemployment was incorporated in the
National Economic and Development Strategy (NEEDS) introduced in March, 2004.
NEEDS’ major role was to confront the various macroeconomic imbalances, social
challenges and structural problems in the Nigerian Economy (Okojo-Iweala and
Kwaako-Osafo, 2007). One of the principal goals was to build a modern Nigeria
that maximizes the potentials of every citizen so as to become the largest and
strongest African economy, and a force to reckon with in the world. To achieve
these goals, NEEDS, as a development strategy, was anchored on the private
sector to engineer wealth creation, employment generation and poverty reduction
(NPC, 2004). At the inception of office, President Yar’adua inaugurated the
7-Point Agenda whose major aim also incorporated employment generation.
Okojie
(2003) noted that the government of Nigeria established many development banks
like the Nigerian Industrial Development Bank (NIDB), the Nigerian Bank for
Commerce and Industry (NBCI) and various micro-financial institutions to ease
the financial tension of intending investors and existing ones. Besides this,
the government has engaged in direct investments in strategic projects like
oil-refinery, petro-chemicals and iron and steel industries (Akpan, 2001).
Apart
from the efforts of the Nigerian central government; international
institutions, like the International Labour Organization (ILO), the World Bank
(WB) and the African Development Bank (AfBD) have responded to the challenges
in unemployment. They advocate for decent work and are directly involved in a
lot of employment generating ventures. Situmbeko, Owas and Sisay (2007) report
the direct investment done in the Nigerian economy on
infrastructure
in various cities which amount to the tune of AU 119.10m2 in 1992 by
the African Development Bank (AfBD). These projects were to assist in water
supply both for domestic, agricultural and industrial uses; to ease the water
scarcity in Akwa Ibom, Cross River and Ogun States. Momoh (2008) reported that
Nigeria received AU 22million (US$30.8m) from the African Development Bank and
the World Bank in December 2003 for the development of the Fadama Phase 2 in
order to empower the farmers in Borno, Jigawa, Katsina, Kogi, Kwara and Plateau
states.
The
World Bank has provided support for the provision of infrastructures and in the
establishment of the Agricultural Development Project (ADP) and funding of
Agricultural Credit Guarantee Scheme Fund (ACGSF). They also, stand for the
farmers that take loans without collateral.
Since
1974, the bank has committed $1.2 billion to Agricultural Development Projects
(ADPs) to increase farm production and welfare among stakeholders in Nigeria
(IEG, 2008). The United Nation Development Programme (UNDP) is assisting to
build capacity to manage the economy and to resolve the problem of poverty. Two
of the four programmes supported by the UNDP are
Job Creation and
Sustainable Livelihood3. The thrust of the programme is the creation
of additional jobs by expanding opportunities for enterprise development by
both men and women. The strategy includes the harnessing of local resources,
upgrading of technical skills, improving access to inputs such as technology,
market information, financial and extension services. Two of the modalities for
delivery of UNDP assistance are: Skills Development Centres and Micro Credit.
Designated communities (at least two in each state) are assisted to establish
or upgrade their Skills Development Centres. Currently, a total of 110 Centres
are benefiting from this assistance. The initiative is to enable unemployed
youth to acquire skills that will enable them to become self-employed.
Facilities are provided for training in the areas of Hairdressing/Cosmetology;
Textile Technology and Weaving; Fashion Design and Dressmaking; Electrical
Installation and Electronics; Wood Works and
Carpentry;
and Welding and Basic Metal Works. There are plans to include computer training
in some states.
The micro credit
delivery programme aims at increasing access of communities to small loans and
other productive inputs to empower them and expand their livelihood
opportunities. Under this, UNDP has trained 37 Microfinance Institutions (MFI)
experts in different states to disburse loans to communities being supported by
the UNDP (Okojie, 2003).
ILO
(2003a) reports that its organization operates under its four cardinal
objectives within the framework of decent work agenda of promoting and
realizing standards and fundamental principles and rights at work; creating
greater opportunities for women and men to secure decent employment and income;
enhancing the coverage and effectiveness of social protection for all; and
strengthening tripartism and social dialogue in Nigeria. The African Union,
including Nigeria, endorsed this framework in their tenth African regional
meeting at Addis Ababa in 2003. According to ILO (2003b), major ILO programmes,
projects and activities were implemented under each of the four strategic
objectives. Depending on national circumstances, priority may have been given
to one or the other aspect of the Decent Work Agenda but, in all cases, the
interaction among the four strategic objectives is the key to
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