The inability of 22 Nigerian states to create fresh jobs as they continually devoted more of their meagre funds to recurrent expenditure has impacted negatively on the country’s unemployment rate, BusinessDay analysis shows.
“Nigeria just came out of recession and there is nothing to drive growth in these states,” said Yinka Ademuwagun, a macroeconomic analyst at United Capital, a Lagos-based investment house. “What they earn is small and they don’t have a viable sector to kick-start that growth that they need, especially in the northern side where there is still insecurity.”
Nigeria emerged from recession in Q2 2017 but its unemployment rate continued to soar steadily, reaching an all-time high of 23.1 percent in Q3 2018 from 6.4 percent in Q4 2014. Most states in the country depend on the federal allocation to meet their financial obligations, which are mainly recurrent. This leaves little or nothing for capital projects, thereby affecting their chances of creating new jobs and worsening the nation’s high unemployment rate.
The statistics bureau defines the unemployed as persons within the labour force (aged 15-65) who were actively looking for work but could not find work or did something but not up to 20 hours in a week, and the underemployed as persons within the labour force who work less than full time (40 hours a week) but work for at least 20 hours on average a week.
In addition, persons who work full time but engaged in an activity that underutilises their skills, time and educational qualifications can also be categorised under the unemployed, while the employed are persons within the labour force who work full time, according to the NBS.
In the review period, Taraba recorded the biggest fall of 229,851 in the number of employed persons to 1.78 million. Kano followed with a drop of 185,863 to 2.77 million, while 130,991 people lost their jobs within 12 months in Adamawa, leaving 1.26 million employed persons as of September 2018.
“Economic growth is inclusive for employment; these states don’t have the revenue to drive economic activities and growth,” Ademuwagun said. “Without spending on infrastructure, it becomes difficult to create jobs.”
Unlike these states, Lagos added 574,744 new jobs to record a total number of 6.39 million employed persons. Rivers created 144,533 jobs to increase its employed population to 2.93 million; Kaduna, 233,483 to 2.56 million; Imo, 175,378 to 2.24 million; while Akwa-Ibom’s employed population rose by 154,692 to 2.24 million between Q3 2017 and Q3 2018.
Kogi added 136,400 jobs in the same period to record 1.98 million employed persons. Enugu, 135,365 to 2 million; Ondo, 122,708 to 2.15 million; Nasarawa, 78,115 to 991,996; Bayelsa, 49,705 to 918,576; Oyo, 46,389 to 3.62 million; while Ebonyi created 32,676 jobs, putting its employed population at 1.21 million.
Benue, Plateau and Jigawa added the least jobs of 25,213, 1,755 and 664, increasing their employed population to 2.22 million, 1.46 million and 1.14 million, respectively.
Out of all these states, the first nine which created the most jobs witnessed declines in their unemployment rates in Q3 2018 compared with the same period in the previous year.
“The improvement can be traceable to the relative improvement in security situations in these states,” Ayodeji Ebo, managing director, Afrinvest Securities Limited, said. “This has attracted the setting up of more industries in the states.”
Rivers’ unemployment rate was down by 4.9 percentage points to 36.4 percent, the biggest fall achieved by any state in the country. As a result, Akwa-Ibom, which recorded a marginal decline of 0.2 percentage point to 37.7 percent, overtook Rivers as the Nigerian state with the highest unemployment rate.
According to Ebo, a lot of the companies shut down their operations at the peak of disruptions of oil production by militants.
“Some of these companies have reopened their offices, hence reducing unemployment rate,” he said.
Lagos recorded the second-biggest drop of 3.7 percentage points in unemployment rate to 14.6 percent. Enugu followed closely with 1.8 percentage points to 18.7 percent owing to an improvement in trade activities in the state, according to Ademuwagun, while Nasarawa recorded 1.5 percentage points to 27.4 percent.
Both Imo and Ondo achieved a decline of 1.2 percentage points in their unemployment rates to 28.2 percent and 14.2 percent, respectively. Kaduna’s unemployment rate decreased by 1.1 percentage points to 26.4 percent, while Kogi was 0.9 percentage point lower to 19.4 percent.
Source: By OLUWASEGUN OLAKOYENIKAN & BUNMI BAILEY