High unemployment rates in Q3 2018: What other states can learn from South West


Unemployment rate in Nigeria rose from 14.4 percent at the end of the first quarter of 2017 to 23.1 percent by the end of the third quarter of 2018, based on the data provided by the National Bureau of Statistics (NBS). If you haven’t understood the implication of that, the next statement should remove any ambiguity on the monster called unemployment and its implication for Nigerians.

In March 2017, Nigeria’s labour force, that is, Nigerians who were able and willing to work were 82.59 million. In that period, those who could get jobs were 70.67 million individuals leaving 11.93 million Nigerians jobless. Back then, the percentage of those who were willing and able but could not get jobs was 14.4 percent.

Fast forward to the end of the third quarter of 2018, the nation’s labour force stood at 90.47 million individuals, out of which 69.54 million were employed leaving 20.93 million Nigerians out of jobs. This leaves the nation’s unemployment rate at 23.1 percent.

The direction of this article stemmed from the trend among the 36 states in the country, where states in a particular geopolitical zone have repeatedly maintained low unemployment rates within the reference period which is from Q1 2017 to Q3 2018.

At the end of the first quarter 2017 when the national unemployment rate was 14.4 percent, eighteen Nigerian states had their unemployment rates lower than the national average, while 16 states had their unemployment rates higher than the national average. The five states with the least unemployment rates in that quarter were Katsina, 2.5 percent; Osun, 4.1 percent; Adamawa, 5.3 percent; Taraba, 5.5 percent and Zamfara, 5.8 percent. Oyo and Ogun made the list of the ten states with the least unemployment rates in Q1 2017.

In Q2 2017, Osun, 4.5 percent; Oyo, 7.9 percent and Ogun, 8.5 percent were among the ten states with the least unemployment rates in the country. No south west state was in the bottom 20 states with the highest unemployment rates in the second quarter of 2017.

In Q3 2017, the list remained the same as Osun, Oyo and Ogun were among the states with the least unemployment rates in the country and no south west states were among the bottom fifteen states.

In the last quarter of 2017, five south west states, excluding Ekiti State, made the ten states with the least unemployment rates in the country. Ekiti State’s unemployment rate was 17.7 percent to rank 13th in the country.

From the first to the third quarter of 2018, four out of the six states in the South West geopolitical zone, particularly Osun, Oyo, Ondo and Ogun, were among the ten states with the lowest unemployment rates in the country.

What are the factors responsible for low unemployment rates in South West?

The consistency in maintaining low unemployment rates by two-thirds of the states in south west could not have been by happenstance, it is a sign that the fiscal models employed by the state governments in that region are delivering better results than others elsewhere. And if we all agree that the million unemployed youths are time bomb, the ideal thing is to learn from one another for the good of everyone.

Osun State for instance, has consistently maintained a low unemployment rate for six years running. This has been attributed to quite a number of factors such as the engagement of youths through the various programs initiated by the immediate past administration of Ogbeni Rauf Aregbesola. Through its youth empowerment schemes, many unemployed residents of the state were engaged directly and indirectly.

Under the umbrella of Osun Youths Empowerment Scheme (O’YES), many of the youths were in one employment or supported to be self-employed. What made the O’YES programs to be that successful whose results have minimized unemployment scourge was because they were non-political and non religious. Employment of the youths was based on the need to attend to all and sundry, and to get everyone busy because an idle hand is the devil’s workshop. The school feeding program brings together farmers, wholesalers, retailers and the final consumers thereby creating the maximum values for all those who are involved in its value chain.

The location factor in the design and implementation of some of the programs in the sub region was also helpful. A job opening that pays N4000 per day which is located close to employee’s residence will make more positive impact than others where workers will have to spend sizable portions of their daily wages on transport. This method in particular, was the driving force for some of projects implemented in Lagos State in the last four years.

“The idea was that I did not want anybody to travel all the way from Badagry to come and look for job in CMS. So, whether the project was going to be paid on schedule or not, give jobs to people in Badagry; don’t let them go to Epe to look for jobs. Create jobs in Epe and give the contract there and if you are just paying just N5,000 to that bricklayer, you are creating a multiplying effect on the household economy; that was the whole idea about the massive projects. When you talk about 114 local government roads by local government contractors, the idea was to keep them busy and spread income across board and stabilize security”, Akinwunmi Ambode, Lagos State Governor said.

“Our main vision was just on the bedrock of three issues: job creation, renewal of infrastructure and then security. So, if any of those projects could just fall within the context of those three items and it has positive impact on the people, we would do it irrespective of the location. So, there was no dichotomy as par elitist projects or mass oriented projects. It was more about: “Does it meet security issue? Does it create jobs? Does it actually have impact on the people? Those were the factors that informed the projects we started at that early stage by going into the hinterland”, Ambode added.

In addition, what other states can learn is to cultivate the habit attracting investment that will create jobs for their residents. Some states might have attracted so many investments so far, but with high unemployment rates, those investments only benefit the state government by boosting their IGR generation and not creating jobs for the common man.

Ogun State is a case in point. By showcasing the potential of the state, Ogun metamorphosed into the nation’s manufacturing base. It should be recalled that since Governor Amosun was swornin in 2011, he made it a tradition to organise investors’ forum every two years. The result was that the state is now the manufacturing and mining headquarters of the nation.

“The present administration in Ogun State opened the business landscape by establishing a one-stop shop in order to streamline the process of setting up business. The massive infrastructural transformation of the state was geared towards catering for the good people of the state and creating a sustainable conducive environment for the business community.

“This government believed that the more conducive and secure environment, the better for industrial growth and industry replication to take place. We believe that any discerning investor will recognise that these are the essential ingredients for successful and sustainable investment,” Bimbo Ashiru, former commissioner for commerce and industry in Ogun State said few months ago.

From the foregoing, the factors that have separated the South West from other regions include the creation of job opportunities that take idle people of the street immediately, using fiscal models that allow daily wages to have more multiplier effects on household economy, and by creating one-stop shop that attracted investments that benefited the state economies, not only in terms of IGR generation, but which created jobs for the locals.

If other states have done all these and yet the unemployment rates are still high, then there is an urgent need for the evaluation of the specialised institutions set up to help government create jobs to know where and how they deviated from the goals they were set up to achieve.

Unemployment rate