Nigeria’s employment crisis has continuously been escalating. In the second quarter of the year it rose to 13.3 per cent from 12.1 percent in the first quarter. According to data from the Nigeria Bureau of Statistics, the rate of unemployment also rose to 12.1 per cent from 10.4 and 9.9 per cent recorded in the fourth and third quarters of 2015.
According to the bureau, the number of people that were unemployed or underemployed increased from 24.4 million as at the end of the first quarter of 2016 to 26.06 million persons. The number of people entering the workforce have continued to rise and is expected to rise further amidst calls for the diversification of the Nigeria’s economy. Many analysts said the way forward for the economy is to grow the Micro, Small and Medium Enterprises (MSME).
Statistics show that the 37.1 million MSMEs in the country of which 99 per cent are micro enterprises have the capacity to employ 59.7 million people. To address the unemployment challenge in the country, the real sector, particularly MSMEs need to be empowered, encouraged to grow and given more priority as they have a high job creating potential.
Also, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in a report said 71.7 per cent of MSME operators in Nigeria identified access to finance as key challenge militating against their businesses. It noted that the likelihood of a small firm having access to a bank loan in low-income countries is about a third of what it is for a medium-sized firm, and less than half of what it is for a larger firm.
The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele in his maiden speech, when he assumed the position as the helmsman at the apex bank, said the private sector is taking the lead in addressing Nigeria’s unemployment challenge.
To this end, the CBN had launched the Youth Innovative Entrepreneurship Development Programme (YIEDP) in furtherance of its intervention in the real sector of the economy and job creation effort. Emefiele stressed the importance of small businesses to building a strong economic base that is resilient to global fluctuations.
Citing National Bureau of Statistics (NBS) figures that put youth unemployment rate at 42.24 per cent in the first quarter of 2016, he lamented that entrepreneurship among Nigerian youths had been hindered by low capacity and funding despite the abundance of opportunities.
He further observed that the challenge of accessibility to funds has made many youths to jettison their laudable ideas in pursuit of white collar jobs, while many educated youths had been exposed to societal ills, as their dreams from their academic pursuit could not be realized.
Emefiele declared that the CBN decided to intervene in the situation in order to prevent a further degeneration in the employment situation in the country. He therefore charged the youth corps members selected to receive facilities under the YIEDP to judiciously utilize the funds by engaging in productive ventures such as rice, cassava and tomatoes farming. This is even as he emphasized that the credit facility was not a grant but a loan that would be repaid at a single digit interest rate.
The programme is targeted at providing needed training and funding for startups; the young and creative minds in the country. The CBN governor stressed that the programme would provide timely and affordable credit to assist youths in implementing their business ideas, thereby providing the mechanism for stimulating growth, reducing unemployment as well as addressing youth restiveness.
Having set aside N10 million to support corps members, Emefiele, said the pilot phase of the programme will target 10,000 youths in productive activities within the next four years. He added that the programme was open to youth corps members and those with not more than five years of post-NYSC experience.
Emefiele explained that a credit line of up to N3 million would be made available to each eligible youth, while recipients who were on records to have made good utilization of the funds would be encouraged to migrate to other CBN intervention schemes that would enable them access more funds.
On collateral requirements for the participation in the programme, he said the bank would make such assets including academic and NYSC certificates, third party guarantees and other moveable assets as collateral for all the successful candidates.
Also speaking on the YIEDP which is being implemented in collaboration with Heritage Bank and the NYSC, the Deputy Governor, Economic Policy of the CBN, Dr. Sarah Alade, stressed the importance of the youth entrepreneurship programme in addressing the urgent need to meaningfully engage Nigerian youths, who now form over 70 percent of the population, in productive activities.
She explained that the programme was internet-based and aimed at improving access to finance and markets, fostering trade and investments, and enhancing the ability of young entrepreneurs to more effectively tap the opportunities offered by the programme and global production value chain.
Alade who expressed confidence that the programme would boost job creation efforts in the country said the YIEDP will also breed a new crop of young entrepreneurs who will make Nigeria globally competitive, eradicate importation of those goods that the country can produce locally and put the country on the path of sustainable economic growth.