Govt Should Use Fiscal Policies to Create Jobs

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Akindele Afolabi

Unemployment remains one of the fundamental challenges that successive governments in this country have not been able to address. In this interview with Ugo Aliogo, Mr. Akindele Afolabi, a Human Resource consultant speaks on this and other related issues. Excerpts:

 

 

What in your view is the most pronounced unemployment problem in Nigeria today?

I think one of the challenges we are facing in the area of unemployment is that we are not creating enough jobs, despite increase in the workforce year in year out. Some may not agree with this position as they have vacant roles that are not being filled because they cannot find candidates with the right skill set. People with this opinion may then argue that lack of skills is the single most important problem. I still hold on to the view that we are not creating enough jobs. Where we have about 2.6 million people entering the labour force annually and less than a million jobs are being created. This is a big issue in our hands.

We usually have situations where applicants far outnumber available positions. What do you make of that?

I think that further validates my earlier position that we are not creating enough jobs. In as much as unemployment is a global phenomenon and we cannot always have enough jobs to go round; countries have tried to keep the rate low. But I feel we are not doing well in keeping the rates low here.

Currently unemployment rate is put at 13.9 percent of the active labour force of over 80 million. When you combine this figure with the number of entrants to the labour force per annum 2.6 million, then you can see why we have such a very high number of applicants per vacancy. If we are going to keep our unemployment rate below double digits, we must be creating about seven million jobs annually.

There is this complain about the quality of Nigerian graduates forcing employers to spend huge sums retraining new recruits. Do you agree with this?

My concern is not even how bad it is, but how worse it would be. We have a situation in our hands that requires a state of emergency. We need to question the essence of our tertiary institutions in facilitating learning, behavioural change and skills acquisition. I feel the best way to measure the effectiveness of a system is to look at the results being generated. If our tertiary institutions are meant to prepare people to solve societal problems, but we are churning out graduates who don’t even understand societal problems or do not have the basic skills; then we need to restructure our educational system.

To further underscore how bad the situation is, we now have graduate finishing schools and other programmes. These initiatives are aimed that helping graduates to get ready for the workplace and acquire skills. There should be no need for finishing schools if the tertiary institutions have done a good job in transforming the minds of their students and inculcating in them basic skills of the workplace.

The world is changing and business automation is fast taking over most jobs. The way work was done 10 years ago is different from the way we do it now. Globalisation is making the place we work not just a physical space, but anywhere we can use our skills productively. Therefore, we should begin to consider how competitive the graduates in our tertiary institutions are in the whole picture. One major effect of this is that the jobs they are meant to do will be exported or automated which will further compound the graduate unemployment problem.

Let me state here that the poor quality of the graduates turned out by our tertiary institutions is not the only reason why most employers retrain the graduates. Globally, organisations train fresh graduates so that they can be properly inducted into the systems of the organisation. This however, does not negate the fact that we churn out poor graduates that need to be retrained.

What do you make of this emphasis on paper qualification rather than on skills acquisition?

Let us look at this by first understanding some wrong assumptions that impact on how we go about seeking for jobs. The first is a general view that job is what you get after graduation or whenever you realise that you have needs to be met so that you can have a source of income to meet those needs. A second is that to have a good job, you must have good qualifications.

These two misconceptions are compounding the problem of unemployment in Nigeria.

We need to move away from the concept of job as a source of income. Job is not a good source of income in my own assessment, so I will advise anyone who wants to get a job to have a good source of income to look elsewhere. What organisations are looking for is a problem solver.

To solve a problem, you need the right skills and not just qualification. Our educational system places more focus on paper qualifications than skills acquisition. The society celebrates someone who makes a first-class or a second class upper than a second class lower or third class honours.

The system of evaluation in our higher institution is designed such that it helps to identify the first class student but not necessarily the best skilled hands. Unfortunately, employers are not looking for just first class graduates, but graduates with the skills to solve the employer’s problem.

Having a first class has no direct positive correlation with having the workplace skills. Neither does having a third class has a positive correlation with not having the workplace skills.

Every course studied in the university has a skill element as well as the theoretical part. But when you focus only on the theoretical part and you evaluate students mostly on that; then you have created a wide gap in the skill area. This doesn’t solve the problem in an organisation.

I am not disregarding having good educational grades. But my point is our focus should be more on using our tertiary institutions as a platform to develop skills; more than a platform to classify students using grades that are associated with their theoretical knowledge of their subjects.

If we refute the above argument and submit that our educational system promotes skill acquisition, there is yet another problem. It is obvious that there is a gap between employers’ skill requirement going by the quality of the graduates and the skills the higher institution might be teaching.

What some countries have done that makes getting good grades in school relevant to the employment world is that they facilitate employer and higher institutions partnership in curriculum development.

I will therefore recommend this synergy between employers and our institutions of learning as a way out to close the gaps.

Additionally, I will suggest that our school evaluation system should not be more about the theoretical knowledge but more of testing on skills acquired. There should be a sizable weight allocated to skill acquisition in determining the final grade of a student.

 

What do you make of government policy on job creation, do you think we are getting it right?

We should commend the present administration for taking initiatives towards job creation. The skills acquisition programmes, agricultural loan, and single digit interest loan for Small Medium Scale Enterprises (SMEs) are steps in the right direction.

If examined critically, one will realise that there is nothing new in these initiatives undertaken by the President Muhammadu Buhari administration. Before now we had National Directorate of Employment (NDE); National Poverty Eradication Programme (NAPEP); Operation Feed the Nation (OFN) and others set up by different administrations. Yet unemployment is on the rise.

This implies that we are not confronting the real problems of unemployment. If government train people in certain skills, they also empower them with loans to start up the business. Agricultural loans are given out to encourage farmers, but what provision is made to accommodate their produce in a profitable way.

We lack adequate investment in agricultural processing and storage facilities which make a large quantity of the produce, especially the perishable ones either waste or sold out at ridiculous prices that are not profitable for the farmers. Some get discouraged and are not able to expand their capacity and that is where most government efforts in this area end.

A country where 45 percent of harvests are lost due to lack of storage facilities should not expect to make a major headway in creating employment through agriculture if that problem is not addressed.

Despite the present administration’s claims that it is creating employment, it has actually recorded a negative growth in job creation in the public sector since the third quarter of 2015, according to data from the National Bureau of Statistics (NBS). I will like to state here that government has no duty creating jobs, its job is to facilitate job creation.

Meanwhile, the informal sector accounts for over 70 percent of jobs created in Nigeria. Jobs are created mainly by the informal and private sectors. What government needs to do is to facilitate job creation by these sectors.

Nigerians are skilful and they can create jobs by themselves. All they need is the infrastructures (dependable power supply, good roads, security of life and property) to support them. They also need good policy that protects their products from competition from imported substitutes. If with the poor state of infrastructure in the country and with the depression, about 145,000 jobs were created in the informal sector in third quarter of 2016 (compared to 429,000 created in same quarter in 2015), we can begin to visualise what number of jobs will be created if the infrastructural support were there.

 Yes, we should commend our government for making job creation an agenda, but government needs to revisit its approach to job creation so that its effort will not be wasted.

You have been a professional recruiter for years. Can you explain some of the recruitment challenges you have noticed over the years?

I have observed that the skills gap is a major problem many recruiters are facing. Ironically, the rate of unemployment is high but the number of vacancies that are not filled too is high.  I have earlier spoken about the perception of job as a source of income, rather than a problem to be solved. This mind-set has not done well for a large part of our workforce in how we prepare for the world of work.

When people don’t approach a job as a problem to be solved, it reflects in how they spend time and resources to develop themselves. This problem is transferred to a recruiter who sees a candidate first from the resume and assumes that it might be worth it speaking to the candidate.

Are there some standards you think we need to be aware of as a country in the attempt to enhance employment and job creation?

If we need to promote employment opportunities, we need to be aware of certain factors such as building the informal sector, have a change in orientation towards skills acquisition more than qualification.

Furthermore, they should see employment and job creation not as a campaign promise by any political party but a national issue that requires continuity. The National Youth Service Corps (NYSC) programme has been in existence since 1973 and has continued till date regardless of the government in power. This is because it was set up by a decree. Policies and initiatives to enhance employment and job creation should enjoy similar back up and continuity.

They are not policies to be implemented in a double term of a government and to be changed by another government in power after 8 years. We need a long term plan. We should also know that job creation is not possible without infrastructural development.

 

What are the strategies you think the country can adopt to curb unemployment in Nigeria?

 

The current government seems to be promoting entrepreneurial education and skills acquisition; these are good initiatives, but government must also facilitate the conditions that can make entrepreneurship thrive. These conditions are absent at the moment and will continue to rubbish every effort at promoting job creation.

Nigeria needs to take seriously the issue of diversifying the economy. The over dependence on the oil and gas sector is a great menace to us. Nigerian economy went down recently just because the price of crude oil fell in the international market. Many jobs in other sectors were lost as a result of that. Countries are moving away from fossil fuels to clean energy.

This shows that building an economy on revenue from oil and gas is not sustainable. Venezuela may have proven this right. We need to open up our economy such that more jobs that are not tied to oil and gas can be created. We should get serious with our solid minerals which are wasting away.

We can invest in the tourism sector. In Nigeria, there are good tourism centres. If we are able to harness the potentials of this sector, it can generate revenue and create employment opportunities. But the sector has been neglected.

We are not used to job creation but job seeking. Entrepreneurship is being pitched as a solution to unemployment when in actual sense it should be the main driver of the economy. People who have been groomed to seek job, find it difficult to change their mind-set. The worst part is that they expect the society to understand that they are qualified to work, but there are no jobs. The informal sector which is where most jobs are created, cannot grow with this mind-set if our graduates are not flooding the space.

Government should also look at how it can use fiscal policies to promote job creation. I believe taxes should be used more to encourage people who are creating jobs than just a source of revenue for government. There are some encouraging practices in this area. But if it is not promoting job creation and helping the jobs created to survive, then it is not good enough. If Nigeria cannot stop out rightly the importation of certain products that are killing the growth of local industries; then it should impose stringent taxes on such companies. Then use the income to boost local production while at the same time giving the local industries some rebate.

Funding is a major problem for most businesses that want to scale up in Nigeria, but accessibility to bank loans is a big issue. Interest rates for borrowers coupled with infrastructural decay don’t usually facilitate the expansion that could have been. This is one area the government needs to look into.

What role should our educational system play in human capacity development?

 One of the objectives of our education policy is to raise individuals to fit well into the society. I would say our educational system should act as a facilitator of this process. This implies that our educational system should jointly develop curriculum for the students with major stakeholders such as employers of labour. Our educational structure should also be research driven so that they can be up to date with new discoveries that impact positively on the students and the society at large.

Our system of teaching, where the lecturer is assumed to be the embodiment of absolute knowledge should be de-emphasised if we are going to raise people that can think analytically. Lectures should be opened to debates where students can challenge the views of the lecturers with facts. The lecturer as a facilitator should be able to stir the students towards arriving at a meaningful conclusion without feeling his ego has been deflated.

If we don’t encourage students to think independently and be confident enough to voice out their views during lectures, then we may be raising timid leaders. We have a culture that promotes respect in Nigeria, but this should not be a stumbling block in our educational system especially when the information you need about anything is available online. Our lecture rooms should be a debate room and not a dumpsite.

 Are there some unconventional ways of reducing unemployment that you want to recommend?

 

If the figures by the NBS were anything to go by, then we need a radical approach to reducing unemployment.

2.6 million people are said to be joining the labour force annually, while less than a million jobs are being created. This is not a trend that should be encouraged to continue otherwise the social crises that could arise from this will be too much for the country to handle in few years to come.

I will therefore suggest a drastic measure taken at population control. China implemented a one Child Policy in 1980 to curb population growth, but this was reversed to two children in January 2016 as they noticed they are having an ageing population. Nigeria can adopt such policy to help the economy.

Such policy is even more important when we consider what automation and robotics is gradually doing to jobs globally. We are going to have fewer jobs in the future, so we cannot afford a continuous rise in our population.

Secondly, I don’t think we have been using data to our advantage in this country. Different government regimes have attempted solving the problem of unemployment in one way or the other, still no solution. We need to have a data to tell us why certain initiatives in addressing employment have worked.

We also need a data on the composition of our population in 10 – 15 years’ from now we can start planning for it.

When we are not even certain about the actual population figure of Nigeria, how can we make effective plans based on the figure we have?  Though these may seem unconnected to job creation but they are very essential.

 The world is talking about the fourth industrial revolution, growth in artificial intelligence, robotics and other areas, is there any implication of this on employment in Nigeria and what are they?

This is a major issue that is surprisingly not being addressed in Nigeria. Perhaps we think it is a distant challenge or we assume we are immune to it. This is why I am advocating that we begin to rethink our careers. There are major implications of this on our employment scheme in Nigeria such as loss of job. Though there is an argument that more jobs will be created, but the net jobs available is still going to be negative. This is a big problem for Nigeria because we need to be creating at least 7 million jobs annually to grapple with keeping our unemployment rate below double digits

There is also digital colonisation. The challenge here is that the hub of the incubation of these ideas is not resident with us. What we will see is that software/applications that are not developed here in Nigeria will start to take away the available jobs from our people. We need our own silicon valley as much as we have Nollywood to incubate new ideas. New skills are going to be required in the next few years. This means that we need to start asking ourselves what the skills of the future are and begin to develop them.

Furthermore, the nature of job is going to change. We are used to people flaunting years of experience in getting jobs but there is going to be less focus on years of experience but more on skills. Anyone, regardless of age or years of experience, who has the relevant skills will get the job above those who may have been doing similar roles for years. Skill is going to trump experience.

Our approach to career management needs to change. Organisations will place less emphasis on training staff because the return on investment (ROI) will be seen to be infinitesimal. Employees therefore will need to start taking ownership of their own career development. With the growing rate of automation, leading to job loss, more talents will leave paid employment to work as freelance. They will be able to support multiple organisations at the same time. This is also good for employers as they would not have to keep such people on their payroll anymore as they can always get them when they need their expertise. This is already happening

 

How can people survive this?

We should understand that there will be victims and there will be victors, it all depends on what people begin to do now. I recently published an article on my blog title ‘why every employee needs to be an entrepreneur’. This is not about starting a business, but emphasising that we all need to be entrepreneurial in mindset. And what that means is having a pig headed discipline towards problem solving.  We all need an eye for the future and begin to do scenario planning. This should give us an idea of what skills we should be acquiring, what new things we should be learning, where our jobs are threatened and what we should do. Additionally, we need to understand the skills of the future and start developing them. This requires thinking differently, asking questions and making projections.

 




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