Economic growth not translating to more, better jobs

Despite the increase in economic growth over the years, a deficit in decent work continues to be the norm in the country, ADEMOLA ALAWIYE writes

Although the federal and state governments claim to have made progress on poverty reduction, the realities facing many workers in the country are lack of decent jobs and limited social protection and security.

While the Nigerian economy has proved to be quite resistant to the global financial crisis, massive unemployment has continued to eat deep into it, with a lot of people out of jobs and facing a future of irregular employment and informality.

The NOI Polls on Monday questioned the assertion that 61 per cent of Nigerians live on less than $1 a day. The polling organisation, after a survey, insisted that only about two in 10 Nigerians (19 per cent) live on less than $1 a day; while about 80 per cent live above the poverty threshold based on the assumption that Nigerians eat at least once a day.

The dollar-a-day poverty threshold is considered to be one of the globally recognised measures of poverty.

According to the National Bureau of Statistics, about 61 per cent of Nigerians live on less than $1 a day.

The country’s Gross Domestic Product, which is a measure of economic growth, expanded by 6.18 per cent in the second quarter of 2013 compared to the same period of the previous year.

From 2005 till date, the GDP growth rate has averaged 6.8 per cent, reaching an all time high of 8.6 per cent in December 2010 and a record low of 4.5 per cent in March 2009.

The country witnessed an improvement in the global GDP ranking from number 44th in 2010 to 36th in 2012 and recorded significant improvements in economic fundamentals, but experts insist that what the country has witnessed, over the years, can best be described as ‘placebo’ growth without real development.

The economy, on paper, seems to be growing, but in reality, it is progressively deteriorating, or, at best, depressingly stagnating, according to the experts.

An analyst, Mr. Kayode Oluwa, said people sometimes misconstrued development with quantitative economic growth and rapid industrialisation.

He said, “I agree that in order to achieve a meaningful and realistic economic transformation, there is the need for policy complement between growth and development. However, it will not only amount to a misnomer, but also too simplistic to equate growth with development.

“Growth is about numbers; intangible, quantitative macro-economic development in terms of economic indices such as increase in income per capita, increase in output and GDP, increase in external reserves, increased trade revenue and balance of payments surplus, etc.

“On the other hand, development is about tangible, qualitative, visible and real material improvement (value addition) in the living conditions of the citizenry in terms of basic human needs and necessities, which make life comfortable for the people and enhance their standard of living.”

Senior Employment Specialist at the International Labour Organisation for South Asia, Mr. Sher Verick, said while analysing growth trend, most of the employment creation in emerging economies had not resulted in formal jobs that provided access to employment rights, benefits and social security.

Among the challenges, according to Verick, is inadequate access to high-quality education and training, along with the mismatch between the skills of job seekers and vacancies.

He said, “Policies to translate growth into decent work creation will include supporting returns to self-employment as well as switching from the informal to the formal economy through stronger incentives such as progressive taxation, improved access to social security etc.

“Reinforcing the implementation and relevance of labour market regulations to increase workers’ protection without reducing job creation by private employers; expanding social protection coverage to improve the income security of workers and their families; improving access to and the quality of education and training; while making sure that employers are involved in order to reduce skills’ mismatches and shortages; and strengthening labour market policies that address both long-term structural problems and mitigate the impact of economic and natural shocks through both targeted measures.”

The World Bank, however, put the unemployment rate in Nigeria at 22 per cent, while the youth unemployment rate is pegged at 38 per cent.

The Team Leader and World Bank Country Representative for Nigeria, Prof. Foluso Okunmadewa, stated this at a Youth Employment and Social Support Operation organised by the Subsidy Reinvestment Programme recently in Abuja.

Decrying the high percentage of youth unemployment, he said the country should do something about this as the youth held the key to achieving the Vision 2020, adding that those between the ages of 15 and 35 accounted for close to 60 per cent of the Nigerian population.

Noting that this figure is about 30 per cent of the workforce, Okunmadewa added that approximately four million Nigerians were entering the labour market annually.

According to the World Bank, job creation in Nigeria has been inadequate to keep pace with the expanding working age population.*

Punch