Research Article

Analysis of Causes and Economic Effects of Youth Unemployment in Nigeria

 

Benard Akpa Ikwuyatum¹ and Orisaremi Upe Christiana²

 

^1&2Department of Humanities and Social Sciences, Federal Polytechnic Nasarawa-Nigeria

¹Email: benakpa1980@gmail.com; ²Email: orisaremiupe@gmail.com

 

Received: July 20, 2023                          Accepted: August 24, 2023                               Published: September 06, 2023

 

 

Introduction

The growing trend in youth unemployment or joblessness and the current spate of crime and Criminal activities poses a serious challenge to the Economic development and progress of Nigeria as a Nation. According to the national bureau of statistics NBS (2011), those who were not employed during the time frame but were presently looking for employment (ages 15 to 64) are considered to be unemployed. A person is considered to be working if they are actively producing products and services and making a legitimate contribution to the GDP.

 

Contrarily, the jobless rate measures the percentage of the population that was actively seeking a job during the time frame but was unable to do so for at least forty (40) hours (NBS,2011).“The causes of joblessness exceed a mere scarcity of job possibilities or underutilization and underperformance of those who labour long hours. It involves the widening gap between economic expectations and employment opportunities, particularly for college graduates, in urban and rural locations” (Adebayo, 1999).

 

Hence, young people between the ages of 15 and 24 who are not actively employed in the production of goods and services but who are seeking work and are available for such job at the prevailing wage are considered to be experiencing youth unemployment. Available statistics has shown an impressive growth rate in Nigerian economy with the rate averaging 6.5 percent over the last decade. The growth has not impacted much in creating more jobs for the growing population. Unemployment rate has been on the increase in percent in 1970 to 23.9 percent in year 2011. At the inception of this political dispensation in 1999, the rate was 12.5 percent showing an increase of over 90% compared to the 2011 figure (NBS, 2011).

 

“The youth unemployment is rising ahead of the national unemployment rate, for instance in year 2010, the National Unemployment rate was 21.1 percent while the youth recorded an unemployment rate of 35.9 percent. Matters got even worse in 2011 with the national unemployment rate rising to 23.9 percent and youth unemployment rate increasing to 37.7 percent” (NBS, 2011). Akpan (2012) traces the beginning of raising unemployment situation in Nigeria to the introduction of “Structural Adjustment Programme (SAP)” in 1986. He argues that before 1986, most Nigerians willing and able to work found employment. Whether the wages/salaries they were paid reflected at least their marginal productivity is another matter.

Statement of the problem

Despite effort by various governments to address the rising youth unemployment, available evidence suggest that youth in the country still face deteriorating employment situation. Since young people without jobs are more likely to feel frightened, sad, nervous, and hopeless with the ensuing insomnia than those who do, the issue continues to be one of national concern. Not only has the scenario presented a significant challenge to the economy, but it has also impeded the country's general growth and development. This is due to the fact that rising youth unemployment tends to degrade standard of living, generate future fear, encourage inactivity, and lower self-esteem. This leads to the youth engaging in all sorts of social vices that are to the detriment of the overall goal of economic development. Over the last decade the rate of crimes and criminal activities committed mostly by the youth are on the increase. From the pipeline vandalisation in the Niger Delta to the Boko Haram in the North, prostitution, kidnapping, armed robbery, political thuggery, internet financial frauds and the likes all adversely touch the performance of the economy. Youth engaged in such activities are supposed to be actively employed in productive services where they can contribute positively to the national output. The failure of government efforts to appropriately address the issue of youth joblessness is evident. Several governments at all levels have acknowledged this issue at various times, yet the only answer put forth thus far has been additional palliatives. This is due to the fact that the current economic, structural, and financial reforms that have been implemented have not produced noteworthy outcomes.

 

Objective of the study

Thus, the purpose of the article is to investigate the causes, trends, and effects of youth joblessness in Nigeria and provide appropriate solutions to problem.

 

Research methodology

The study employed a desk review methodology whereby data where gathered from published work such as journals, magazines as well as online information on the topic and also used statistical and descriptive method  to arrive at the  understanding of  the  causes and economic effect of youth unemployment from which conclusion was drawn and recommendations made.

 

Literature review

Unemployment

“The International labour Organization (ILO, 2012)defines unemployed as numbers of economically active population who are without work but available for and seeking work, including people who lost their jobs and those who have voluntarily left work” (Okojie, 2011). Available literature has made distinction of various types of unemployment which are often categorized as; frictional, seasonal, structural or cyclical. As a subcategory of joblessness, frictional joblessness mostly reflects temporary. “Unemployment spells as a result of job search and matching difficulties in connection with quits, new entries to the labour market and job separation because of employer's dissatisfaction with the individual worker”(Makinwa, 2006). Seasonal unemployment arises when the people in employment lose their jobs due to the nature of the jobs. Structural unemployment is a situation where the prevailing wage fails to adjust and equate the supply of and demand for labour. People are willing to take jobs at the current wage but the jobs are not available. There tends to be an excess supply over demand in the labour market.

 

Theoretical Framework

The Keynesian Model

According to early researchers of the classical school of thinking, joblessness is a result of an over labour supply brought on by high labour costs (wages). “The theory holds that when social and political factors set wages excessively high, demand would be low and supply would be high, and that excess supply would represent unemployed labour” (Sodipe and Ogunrinola, 2011). They argued that if the economy were allowed to operate naturally, it would shift to attain a balance wage for employees and accomplish full employment. This implied that, like all other problems, the one of joblessness is a self-solving one. When wages decline, there will be a greater demand for labour, and ultimately everybody who seeks employment will be able to get one. However, after world war II, the idea of full employment failed and Keynes came up with the role of government to augment output and aggregate demand by employing workers to dig holes and after sometime employ more workers to fill up the holes to create jobs and at the same time increasing potential output for the economy (Makinwa, 2006). Keynes stated that competition is unable to change the value of labor and thereby remove surplus supplies or demand in the labour market and disputed the presence of self-correcting market processes that are able to clear the labour market in a competition economy. He goes on to say that there are some situations in which a decrease in the money pay rate would not be able to boost the overall demand for goods and services. Keynes posits that "production and employment would remain unchanged after the cut in wages". According to the Keynesian model, the traditional remedy of reducing money salaries won't work this time; an improvement in overall demand is required to regain sustainable employment. This is due to Keynes' theory that wages are inflexible in the downward direction because workers will fight against wage cuts through their union. Hence, the combined effect of union militancy, employees' reluctance to accept a salary reduction, and the possibility that product prices could decline in the same proportion as a wage reduction, keeping real wages unchanged, may render conventional projections unreliable. Keynes suggested fiscal policy tools such as government deficit budgeting spending on public works as an alternative to depending on wage flexibility. “This has the potentials of increasing aggregate demand and hence removing the incidence of involuntary unemployment” (Makinwa, 2006).

 

The rising unemployment in most developing countries like Nigeria can be understood and explained within the above theoretical basis. “The structural and policy failures in addressing the macroeconomic imbalances may not be taken away as factor responsible to the rising unemployment rates in Nigeria. The failure of modern industries to generate a significant number of employment opportunities is one of the most obvious failures of the development process in Nigeria” (Sodipe and Ogunrinola, 2011). According to the 2006 national census, 20.18 percent of the Nigerians populations were youth aged between 15 to 24 years (Adebayo, 1999). The youth unemployment rate in Nigeria has been rising over the past decades. Most worrisome is the youth unemployment over the years far exceeds the national figures. For example in years 2008, 2010 and 2011, the unemployment rate in the country was 14.9, 21.4 and 23.9 percent respectively, whereas youth joblessness was 41.6, 25.2 and 37.7 percent for same years (NBS, 2011).

 

Youth and economic development

The worlds over youths are regarded as assets when effectively utilized. They are the agents of social and economic transformation and form the bedrock for any meaningful economic growth and development. Okojie (2011) identified the importance of youth in several ways; since youth forms the economically active age groups, they usually provide the much needed labour force for the national economy. Young people are agents of change. They are also the beneficiaries of change as they enjoy the opportunities brought about by economic and social progress.

 

Youth engaged in employment activities earn income thereby contributing to the national income of the country. Youth unemployment therefore, imposes burden to the economy. The unemployed youth have no or less money to spend on goods and services and that affect personal savings and investment thereby leading to a loss in production. Youth as workers contribute to the tax revenue. Youth unemployment means a loss of revenue to the government, wasted investments in education and training, and increase in welfare and other social costs. The transformation in information and communication technology is leading with young people. Youth are the society's athletes and artists. They are the future leaders of the nation. Thus, youth are an asset to the nation. For the unemployed youth, unemployment takes' a heavy toll on them and their families through economic hardships, social exclusion, lost production and wasted human potential. Instead of being viewed as a problem, the influx of youngsters entering the labour force should be acknowledged as providing immense possibility and capacity for economic and social progress.

 

Causes of youth unemployment

The International Labour Organization (ILO, 2010), has identified certain factors as some of the causes of youth unemployment. It identifies factors such as an imbalance between the supply of and demand for young workers. “Supply of young workers is influenced basically by education, skills gap and skills mismatch and the demand moved by factors such as macroeconomic and business environment, labour market regulations and imbalances between workers education/skills and their wages”. Accelerated population increase in Nigeria that is not accompanied by an accelerated development of the economy's absorbent capability is one of the causes of rising youth joblessness. As a result, the population of people of working age is growing rapidly than the rate at which fresh employment can be produced in the labour market. Also, there is a meagre marketable competence.

 

Statistics indicate that more young people have received formal education throughout time, but that formal education is directed more towards teaching fundamental literacy and numeracy than towards teaching industrial and technical skills. “Educational systems are yet to adjust to the changing demands for knowledge, skills and aptitudes required in the labour market” (Akinfesi, 1996). Yet, the main causes of the emergence of a significant degree of joblessness in Nigeria were revealed to be the assuring political instability and inconsistent socio-economic and educational policies of succeeding governments. Poor or lack of adequate infrastructure such as power and transport, inadequate access to finance and poor investment climate are also factors contributing to the rise in Nigeria's youth unemployment. Corruption, favoritism and lack of political will in Governance affect policy formulation and implementations thereby leading to failures of most programmes targeted at youth employment generation.

 

Unemployment in Nigeria

Existing record has shown that the problem of unemployment in Nigeria become more pronounced and endemic in the early 1980's. “The unemployment rate rose from 3.1 percent in 1977 to 6.4 percent in 1980, it later oscillated between 6.4 and 6.1 percent during 1980 to 1985 period” (Akpan, 2012). Although there was a little reduction in the rate between 1981 and 1986, it was still greater than in the 1960s and 1970s. Around 70% of the workforce is employed in the agricultural sector (Adebayo, 1999). Contrary to SAP's expectations, which were focused at promoting more job prospects in the private sector, the jobless rate rose from 5.3 percent to 7.0 percent in 1987. This had major repercussions for the short-term unemployment crisis. The continuance of worker layoffs and the imposition of a job ban in the public sector only made matters worse. “The new policy orientation brought about some structural changes within the Nigerian labour market, sectors such as the oil, banking and external sectors became a "blue chips" as against the public and industrial sectors which used to be the "prime" of the labour market prior to the adoption of SAP in Nigeria”. The joblessness rate almost doubled from 12.7 percent in 2008 to 23.9 percent in 2011. The number of willing and able men and women looking for job increased from 7.5 million in 2007 to 16.1million in 2011 (Table 1). Given the Nigeria's population of about 167.9 million with economically active (15-24 years) of 92.4 million in 2011, representing 55 percent of the population it is expected that new entrants into the labour market will increase in the next few years to come and thus further worsen the unemployment problem. Out of the 67.3 millions that formed the labour force in 2011 about 16.1 million are roaming the streets of Nigeria looking for jobs to do (Table 1). This figure is high for a country that recorded a growth rate of about 6.5 percent in that same year.

 

Table 1. Labour Statistics, 2007-2011.

 

Table 2. Unemployment rates by age group 2009-2011.

 

Youth unemployment rate is very high over the years above the national rate in most cases. For instance while the national rate was 19.8 percent in 2009 the youth unemployment rate was 41.6 percent showing a margin of 21.9 percent. In year 2011 the national rate rose to 23.9% while the youth rate was 37.7% with a margin of about 13.8 percent (Table 2). Joblessness rate of 37.7 percent among the age group of 15-24 implies that about one third of youths who are willing to work but cannot secure a job.

 

The unemployment rate is high among this category of labour force because of the fact that bulk of the people within the age of 15-24 are secondary schools graduates and products of higher institutions such as colleges of education, polytechnics, monotechnics and universities (see table 3). In most cases, this vocational/technical skills which would allow them to find job placements in the major sectors of the economy.

Table 3. Unemployment Rate by Educational Level (2011).

 

Students' enrolment and graduate turn-out in recent years are high compared to the number of jobs available. “most graduates of higher education are still looking for jobs rather than create jobs. Only about one out of one thousand graduates of Nigerian tertiary institutions get employed. The low level of entrepreneurial zeal among graduates of higher education can be attributed as the main reason why they are not starting their own business, coupled with inability to secure credit facility”. The system of education Nigeria is structured towards preparing graduates for work in an already over-saturated labour market where employers are reducing workforce. This gloomy picture of graduate unemployment in Nigeria becomes clear with the recruitment of executive truck drivers by Dangote group of companies. “Out of the 13,000 applicants, there were six PhD. Holders, 704 masters and over 8,460 bachelor degree holders. Most disturbing in the whole situation is that the company needed only 100 Drivers but got 13,000 applications most of them graduate from reputable universities”

 

Government programmers or policies on youth employment

After the attainment of independence in 1960, the main concern of the government then was to pursue development particularly in rural and semi urban areas (World Bank,-2009). Government effort at creating jobs was contained in the national development plans. The creation of chances in the fields of health, employment, and education, as well as the enhancement of accessibility to these opportunities, was one of the goals of the first national development plan (1962–1969). Agriculture, forestry, fisheries, and rural sector development were the main topics of the second (1970–1974) and the third (1975–1980) plans. The fourth one gave special attention to boosting average citizens' actual incomes and reducing income disparity. “Programmes that included River Basin Development Authorities (RBDA), Agricultural Development Programmes (ADP), Nigeria Agricultural Cooperative and Rural Development Bank (NACRDB) were introduced in 1972. The Agricultural Credit Guarantee Scheme (ACGS), Rural Electrification Scheme (RES) and Rural Banking Programme (RBP) all created in 1977 to foster rural development and create employment opportunities (Sodipe 2009). Operation Feed the Nation (OFN), Free and Compulsory were also created in 1977. Green revolution and low cost housing scheme was introduced in 1980. The underlying objectives of all these programmes were job creation, improvement of agricultural productivity and income as well as curtailing the rural-urban migration (Sodipe 2009). “Despite significant degree of success made in playing expected roles of establishment by some of these programmes, most of them could not be sustained due to lack of political will and commitment, inadequate financing, policy instability and insufficient involvement of the beneficiaries in these programmes” (Vremudia, 2010). At the peak of the severe economic crises, the Federal government under the administration of General Ibrahim Babangida introduced the SAP.

 

One of the key objectives of the programme was adjustment in the real economic sectors for more effective performance towards employment generation and poverty reduction. Programmes/policies adopted under SAP include; Directorate of Roads and Rural Infrastructure (DFRRI) introduced in 1986 with the main focus of facilitating the improvement and development in feeder roads, rural water supply and rural electrification. “National Directorate of Employment (NDE), Better Life Programme (BLP), Peoples Bank of Nigeria (PBN), Community Banks (CB), Family Support Programme (FSP) and Family Economic advancement Programme (FEAP) were either directly or indirectly targeted towards employment generation and poverty reduction (Sodipe 2009).Contrary to expectations, the SAP implementation actually made many Nigerians' living conditions worse, particularly the poor, who are the most susceptible population. The government and policy makers continue to face a significant issue from rising youth unemployment. The National Economic Empowerment and Development Strategy (NEEDS), recently established by the government, aim to create 7 million employment by 2007. It was designed also to go down to the states and local governments. The target was not achieved because the sectoral allocation of the jobs was not specified. Specifying the allocation could have assisted in prioritizing job creation according to the demand of each sector. The Seven Point Agenda, National Youth Policy, National Employment Policy and National Poverty Eradication Programme (NAPEP) could not impact much on the youth employment in the nation. The Central Bank of Nigeria also initiated the Entrepreneurship Development Programme (EDPs) with centres in the six geo-political zones of the country. This is in addition to other EDPs by the Federal Ministry of Youth Development, Small and Medium Enterprises Development Agency (SMEDAN), and Bank of Industry (BOI).

 

Worried by the raising trend in youth joblessness, the federal government under the past administration launched a youth entrepreneurship programme called the “Youth Enterprise with Innovation in Nigeria (YOUWIN)”. The federal ministries of finance, communication and technology, youth and women's affairs, and social development collaborate on this programme. The aim of the programme is to create jobs through encouraging and supporting young men and women with ambitious and creative enterprising skills to develop and implement their business ideas (Okojie, 2011). A target of 80,000 to 320,000 jobs is expected to be created by September, 2013 at the cost of N10b. The Government also under the scheme has offered about N1b as takeoff to 1000 youth who distinguish themselves after screening and training in various skills and trades. The Subsidy Re-Investment and Empowerment Programme (SURE-P) also aimed at Youth and women employment with a target of over 300, 0000 unskilled youths, women and disabled every year. Governments at states and local governments too have established various programmes aimed at creating employment opportunities for the teeming youth. Whether or not these programmes and policies will be sustained is another major concern. Their effective implementation is also another issue of worry considering the failure of similar programme such as the youth empowerment scheme, microfinance banks and the likes.

 

Trend Review of Youth Unemployment statistics by states

Looking at table 4 below, the Structure of the unemployment data has shown that majority of the unemployed are youths signifying that a larger part of the economically active population are living idle with no jobs. An idle youth without a job and earning no income has a tendency of engaging in any kind of criminality in an effort to find a way of survival. Youth lacking in sound moral upbringing in most cases grew up in conditions that inspires criminal behavior. They often lack the opportunity to enroll in schools and only endure by undertaking accomplishments such as petty trading, casual work and other menial jobs. Youth unemployment leads to a lot of antisocial behaviors such as the appearance of road children, participation of youths in criminalities and armed engagement (Militancy in the Niger Delta, and Boko Haram crisis in the North) were all powered by youth joblessness plus religious and other factors.

 

The distribution of unemployment by geo-political zones and states indicates that the problem is more severe and worrisome in the Northern states compared to the Southern Nigeria. For instance in the years 2010 and 2011 when the criminal activities reach climax activities in the country, all the northern states recorded an increase in the rates of youth unemployment. From table 4, Adamawa, Bauchi, Gombe, Yobe and Borno states had 33.8, 41.4, 38.7, 35.6 and 29.1 respectively in 2011, While in 2010, the respective figures were 24.6, 27.0, 27.2,26.2 and 26.7 showing a significant increase (Table 4). Only Taraba State showed a decreasing figure from 24.7 in 2010 to 12.7 in 2011. This might not be unrelated to the state's agricultural interests, which employ more young people there. Other northern States like Kano, Jigawa, Katsina, Kebbi, Zamfara all showed an increase in the rates between 2010 and 2011 (see table). Most states in the South recorded a decrease in the unemployment rate with the exception of Edo, Anambra and Kwara states (see Table 4). Edo state has the highest cases of child trafficking and prostitution in the years under review. Looking at the five year average of the unemployment rate, states such as Bayelsa, 36.4 Rivers 31.9 and Imo 24.4 has the highest figures (Table 4). These are states faced with petroleum pipelines vandalisation, youth militancy and kidnapping. The southwest states Ondo, Ogun, Oyo and Oshun showed relatively-lower rates on the average for the five year period (see table 4). The states with high rates of unemployment appear to have more challenges in terms of youth insurgencies. One of the negative effects of this is the deterioration in the security situation as being currently experienced in some parts of the country. Idle youths are purportedly impelled to serve as political thugs to desperate politicians while some are engaged in militancy, armed robbery, kidnapping, religious/tribal fanatics, prostitution, drug carriers, Yahoo yahoo boys, cultism and other criminal activities as a way of life (Akpan, 2012). This therefore suggests some correlations to an extent between unemployment and youth insurgencies. A common feature of Youth unemployment in Nigeria is where youth in many cities, towns and villages gather at viewing centres, bars and eating places to watch football matches, smoke Indian hemp and other addictive substances for the greater part of the day. These places usually turn to be the training grounds for criminals and political thugs.

 

Table 4. Youth Unemployment Statistics by States.

 

Youth engage in such activities are given various names such as Area Boys in Lagos, Yan Daba in Kano, Ecomog in Maiduguri, Sara Suka in Bauchi, Yan Kalare in Gombe and so on (Okojie, 2011). Youth unemployment has also sparked the growth of crime groups that indulge in violent crimes such as armed robberies, kidnappings, car thefts, unlawful gasoline sales, and the unlawful purchase of weapons, most of which have attained worrisome proportions in various Nigerian cities. Particularly young people in the South-South Zone have created several gangs that engage in kidnapping, blowing up oil pipelines, bunkering oil, operating unauthorized refineries, and other criminal acts. By attempting to gather petrol from ruptured oil pipelines, many unemployed and underprivileged youth perished in explosions (Akpan, 2012, Ijeoma, 2021).

 

Research findings

The study examines the issue of youth joblessness in Nigeria and its potential impact on the rise of social vices there. The youth unemployment rate has been on upsurge over the years, rising higher than the national rate. The current spade of growing criminal activities in the country is to a certain extent connected to the youth idleness due to lack of jobs to engage them in productive activities.

 

Conclusion and Recommendations

Corruption was and still remains the major factor jeopardizing effective policy implementation in Nigeria, curbing it will be the first and major step towards job creation. Creating more jobs to the youths will reduce the rate of crimes and criminal activities in the country. Government should adopt and implement a comprehensive programme in support of youth entrepreneurship and self-employment. The current programmes under YOUWIN and SURE-P should be effectively monitored and implemented devoid of sentiments and personal interests. The recent policy of inculcating entrepreneurship studies into the school's curriculum should be vigorously pursued and extended down to senior secondary schools. Politicians taking the advantages of unemployed youth to engage them in political thuggery should be prosecuted by the court of laws and sanctioned if found guilty.

 

Declarations

Acknowledgements: Not applicable.

Conflict of Interest: The authors declare no conflict of interest.

Ethical Approval: Not applicable.

Funding: This research received no external funding.

Author Contributions: Both authors contributed equally to this manuscript.

 

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Citation: Benard Akpa Ikwuyatum and Orisaremi Upe Christiana. 2023. Analysis of Causes and Economic Effects of Youth Unemployment in Nigeria. Global Research Journal of Social Sciences and Management, 1(1): 5-12.

Copyright: ©2023 Benard Akpa Ikwuyatum and Orisaremi Upe Christiana. This is an open-access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.