Unemployment: OPS Calls for Targeted Financing in Real Sector – THISDAY Newspapers
Amidst the worsening unemployment situation in the country, the Organised Private Sector, represented by the Lagos Chamber of Commerce and Industry (LCCI); Nigeria Employers Consultative Association (NECA), and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) at the weekend rolled out a cocktail of suggestions to halt the disturbing trend in separate interviews with Festus Akanbi
As Nigeria battles the reality of growing unemployment, members of the nation’s Organised Private Sector (OPS) have asked the federal government to unleash its development agencies on the real sector of the economy in terms of targeted financing. They also called for an improved operating environment for business and a climate devoid of insecurity to lives and property.
The intervention of the OPS came on the heels of a Bloomberg report last week which rated Nigeria as having the third-highest unemployment rate at 33.3 per cent, while South Africa has the highest rate among a list of 82 countries. Namibia has the second-highest unemployment rate rises at 33.4 per cent, the report said.
The Director-General, Lagos Chambers of Commerce and Industry (LCCI), Dr. Chinyere Almona; the Director-General, Nigeria Employers’ Consultative Association, (NEC), Dr. Timothy Oyawale, and the Director-General, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Ambassador Ayo Olukanni, who spoke with our correspondent in separate interviews, said the Bloomberg report merely underscored the frightening dimension of the prevailing unemployment situation in Nigeria, hence the call for all hands to be on deck.
The LCCI DG, Almona, said the severity of the unemployment situation has made it necessary for the federal government to initiate policies through its development finance institutions like the Bank of Industry, Bank of Agriculture, NEXIM Bank, and the CBN to support the real sector with targeted financing and infrastructural support. For the NECA chief, there is an urgent need to ease the burden of business owners in a way to give them the confidence to generate employment, while the NACCIMA DG said peace must return to the land before an improvement in the current employment situation can be achieved.
Targetted Financing in Real Sector Non-Negotiable
According to LCCI DG, “the policy directive by the CBN in July 2019, directing banks to henceforth maintain a minimum Loan- to-Deposit-Ratio (LDR) of 60% from September 2019, could have had a positive impact, to some extent, on the real sector. This policy can have a multiplier effect, that will bring about an increase in employment and growth in the GDP.”
She, therefore, suggested that “Such interventions should be directed to sectors like agriculture, manufacturing, consumer credit, and general commerce,” adding that “other interventions by the CBN and other institutions should be expanded to have national coverage and fund them till when the beneficiaries can sustain their operations.”
Stressing the need to create an enabling environment to attract foreign investment, the LCCI boss said, “The growth target of 2.6 per cent for 2021 requires investments in the real sector through Foreign Direct Investments (FDIs).
“In the first quarter of 2021, we attracted only a total of $1.905 billion and a total of $876 million in the second quarter.
“We need to create and sustain a more conducive business environment that continually attracts more capital importation to the country. The foreign capital wealth attracted to the country has a way of increasing the wealth of an economy which can translate to more business opportunities, more jobs, and more wealth creation in the long term.”
She called for the establishment of industrial or enterprise hubs across the country for targeted SMEs operating in growth and advantaged sectors like fashion, technology, manufacturing, logistics, healthcare/pharmaceuticals, and agribusiness in the country.
“These sectors can create jobs for the youth and boost our Gross Domestic Product (GDP). These hubs should be equipped with infrastructures such as power, water, access roads, and broadband fibre optic, which will boost productivity for SME,” she stated.
She also made case for the tourism industry, which she said had suffered terribly as a result of the Covid-19 lockdown. This development, she explained, resulted in job losses in the industry.
She, therefore, suggested that “The government should consider extending targeted support to players in this sector to revamp their operations and reabsorb disengaged employees. This can be replicated to other job-rich sectors like agriculture, agro-processing, commerce, etc.”
Soft Landing Needed for Businesses
On his part, the NECA DG, Oyawale, said Nigeria is in a very critical situation on account of unemployment more so, the greatest percentage of unemployment in Nigeria is youth unemployment. He pointed out that the energy that ordinarily should have been channelled towards productive purposes is being channelled into nefarious activities by these youths.
Oyawale said the problem of unemployment will continue to linger until government softens its stance for businesses.
He lamented a situation whereby business owners are made to pay multiple taxes and face other unfavourable policies of the government.
“Government should create a conducive environment for businesses to thrive and through that, businesses will create jobs. But even businesses in this environment are struggling. They are grasping for breath so, the primary efforts of business are even to survive to be competitive and for them to be able to break even in this environment where the ease of doing business is a luxury and in this environment where policies are very hostile against businesses.
“For everyone in the system, we know this is import-dependent economy to even get forex to do business is a herculean task. It is an economy where those that are supposed to facilitate businesses-the regulatory bodies are the ones strangulating businesses. This is an economy where the tax authorities are imposing and enforcing arbitrary taxation businesses are choking.
“So, until we can create a conducive environment for business to thrive and create jobs in the first instance, the issue of reducing unemployment will be a mirage,” he said.
The NECA boss believes that one of the ways of reducing unemployment is to create skills for our youths so that they won’t be running after white-collar jobs.
He maintained, however, that “skills acquisition or empowerment are at a cost. The scenario I have painted with regards to businesses does not encourage investment in skills empowerment rather it is a survival of the fittest for businesses.
“However, we want to say we recognise all the efforts of government in one way or the other but there is need to harmonise all their interventions so that we will be very sure of what is happening and who is doing what instead of every ministry doing one thing or the other and also working at cross purposes.
“We feel there could be a public-private sectors partnership so that government and the private sectors can support one another in the acquisition of skills for our youths and that speaks to the model the NECA and the ITF have put in place, the technical skill development project. It has been a success in the past 10 years.”
Improved Security Situation will Boost Business, Economic Activities
The NACCIMA DG, Olukanni, insisted that government cannot win the battle against unemployment unless peace returns to all the regions of the country.
He said, “The problem of unemployment has adverse effects on both the economy and the society. High level of poverty, migration to other countries in search of greener pastures, reduction in national output, small and medium scale industries partially crippled as a result of economic and fiscal policies, lack of infrastructure, epileptic power supply are some of the reasons for the alarming rate of unemployment in the country.
“To address this situation, the primary issue that needs to be addressed is the insecurity of lives and properties. The collective efforts of our military at securing lives would promote trading activities. When this happens, the businessman in the South would not be scared to move his goods to other states. Subsequently, he would open more branches and employ hands to work with him. “
Olukanni also believes that increasing the number of entrepreneurs would reduce unemployment.
He also believed that capacity-building training is key to closing the unemployment gap. According to him, “Skill acquisition programmes would transform our youths from job seekers to job creators. The government cannot provide jobs all alone for the teeming population, hence the need for collective efforts in combating the scourge,” explaining that NACCIMA as the national premier chamber is committed to capacity building as it is one of our core values.
He agreed that the private sector also has a lot to offer to reduce unemployment, saying, “It is worthy to note that, the organised private sector is a key stakeholder in the Nigerian economy which accounts for more than 90 per cent of jobs for the people.
NACCIMA under the leadership of Ide John C. Udeagbala is making sure that it helps in reducing the youth unemployment rate through youth empowerment programmes. This, we intend to do by establishing IT co-creation centres in different states of the federation.”
According to a World Bank report in June this year, over seven million Nigerians lost their jobs due to inflationary pressures in 2020, taking the total number of poor people in the country to over 83 million (40% of the total population).