On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.
The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.
It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.
“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.
“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”
The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.
“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.
According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.
The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.
It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”
According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.
It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.
“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.
“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”
The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.
It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.
“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.
Nigeria Experience Worst Unemployment In A Decade, As More Youth Seek Migration To Escape Poverty – World Bank
The World Bank affirmed that Nigeria is currently going through one of its worst unemployment crises in recent times.
“Nigeria is facing one of the most acute jobless crises in recent times. Between 2014 and 2020, Nigeria’s working-age population grew from 102 million to 122 million, growing at an average rate of approximately 3 percent per year, the multilateral lender said in its latest report on Nigeria.
“Similarly, Nigeria’s active labour force population, that is, those willing and able to work among the working-age population, grew from 73 million in 2014 to 90 million in 2018, adding 17.5 million new entrants to Nigeria’s active labour force.
“Since 2018, however, the active labour force population has dramatically decreased to around 70 million—lower than the level in 2014— while the number of Nigerians who are in the working-age population but not active in the labour force has increased from 29 million to 52 million between 2014 and 2020.
“The expanding working-age population combined with scarce domestic employment opportunities is creating high rates of unemployment, particularly for Nigeria’s youth,” the World Bank report noted.
However, between 2010 and 2020, the international financial institution estimated that the unemployment rate rose five-fold, from 6.4 percent in 2010 to 33.3 percent in 2020, with the rates being particularly acute since the 2015/2016 economic recession and further worsened as COVID-19 led to the worst recession in four decades in 2020.
Increasingly, it noted that educated Nigerians were struggling to find employment opportunities in the country while unemployment rates increased substantially for Nigerians across all education levels over the years, becoming progressively challenging for educated Nigerians to find employment opportunities.
“Combined with significant demographic changes and increased aspirations of the youth, Nigeria’s unemployment crisis is creating migratory pressure in the economy.
“Unemployment is considered to be a key driver of migration. Consequently, multiple surveys show that the number of Nigerians, who are looking to migrate internationally is high and increasing,” it pointed out.
In the last few years, the bank stated that the number of persons eager to migrate has increased from 36 percent in 2014, to 52 percent in 2018, noting that the desire to migrate remains higher among unemployed (38 percent), youth (39 percent), secondary education graduates (39 percent), urban residents (41 percent) and post-secondary graduates (45 percent) in Nigeria.
It maintained that since there has not been an expansion of legal migration routes for youth increasingly eager to find opportunities in the overseas labour market, young Nigerians are opting for irregular migration routes to realise their hopes for a better life.
“What is worrying, however, is the increase in the number of forced and irregular migrants from Nigeria, “ it disclosed.
According to a new report by the multilateral lender, the socio-economic challenges facing Nigerians in the last 10 years have led to an astronomical increase in the number of citizens seeking asylum and refugee status in other countries.
The World Bank further estimated that there were 2.1 million Internally Displaced Persons (IDPs) in Nigeria in 2020 alone.
The, however, blamed a combination of rising unemployment, booming demographics, and unfulfilled aspirations as resulting in increasing pressure on young Nigerians to migrate in search of gainful employment overseas.
In addition, the Washington-based institution disclosed that the number of international migrants from Nigeria has increased threefold since 1990, growing from 446,806 in 1990 to 1,438,331 in 2019.
It explained that despite this trend, the share of international migrants as a proportion to Nigeria’s population has remained largely constant, increased slightly from 0.5 percent in 1990 to 0.7 per cent in 2019.
The lender said the recent rise in irregular migration notwithstanding, the share of international migrants in Nigeria’s population was much lower compared to the shares in Sub-Saharan Africa and globally.
The data showed that the number has risen by over 1,380 percent in the years between 2010 and 2019, indicating that in comparison, the number of persons coming into Nigeria from outside has been relatively stagnant in the decade under consideration.
“An important trend that is observed in the data is the rise in the number of refugees and asylum seekers from Nigeria. The share of refugees and asylum seekers from Nigeria has increased drastically in the last decade, growing from 27,557 in 2010 to 408,078 in 2019,” it stated.
It noted that although the country was reaping dividends from the success of its citizens in the diaspora, which was put at five percent of its Gross Domestic Product (GDP) in 2019, when it comes to the discourse on international migration, the narrative has not been palatable.
It stressed that to ensure mutual cooperation, the European Trust Fund for Africa (EUTF), which was established in 2015, with the aim to promote areas of mutual development interest between Europe and Africa, has since provided more than €4 billion in aid to African countries to address various development-related challenges and priorities in Africa.
Since its inception, the EUTF, the bank stated, has provided more than €770 million for migration-related projects in Nigeria, with most of the funds invested in border control measures, awareness campaigns to stop trafficking, and the creation of jobs domestically, including for returned Nigerian migrants.
While predicting that by 2100, Europe’s working age population between the ages of 20 and 64 would decline by 30 percent owing to low birth-rates and increased longevity, it further projected that at same time, the working age-population in Nigeria could increase by 140 percent.
“By expanding legal pathways for migration and implementing supporting measures to reap dividends from current migrants in the diaspora, Nigeria can further benefit from international migration.
“Nigeria’s institutions are well-placed to promote managed migration approaches that help create opportunities for prospective Nigerian job seekers to find employment internationally and can be supported to help design schemes that increase the returns to human capital investments for Nigerian youth,” the report concluded.
African Development Bank Group and Ethiopia Sign $118 Million Grant Agreement to Support Agro industrial park, Youth Employment
The African Development Bank Group and the Government of Ethiopia have signed two separate grant agreements for new projects to boost youth employment and electricity trade between Ethiopia and Djibouti.
The grants fall under the Bank Group’s concessional lending window, the African Development Fund, and will go towards the Productivity Enhancement to Support Agro Industrial Parks and Youth Employment Project worth $47 million, and the $71 million Ethiopia-Djibouti Second Power Interconnection Project, which aims to boost electricity trade between Ethiopia and neighbouring Djibouti.
The industrial parks and youth project will see the development of irrigation and water management infrastructure around the Integrated Agro-Industrial Parks, offering opportunities for graduate “agri-preneurs” to establish agro-related, commercially viable businesses. The $102 million venture is being co-financed with the Arab Bank for Economic Development in Africa (BADEA), with a $5.25 million contribution by the Ethiopian government.
Under the scheme, 12,607 ha of irrigated land would be developed and about 3,000 youths will receive both agronomic/agriculture and business development training. Bank financing is expected to cover 4,607 ha and BADEA financing another 8,000 ha.
The irrigation infrastructure will strengthen water users’ associations; protect the water-shed areas around the irrigation schemes; go towards training farmers and youth agri-preneurs on soil and water conservation practices, agricultural production, value addition and marketing; and support established youth SMEs to access credit.
The project will be implemented over a five-year period (2021-2026) under the supervision of the Ministry of Water, Irrigation and Energy and the country’s Irrigation Development Commission.
The Ethiopia-Djibouti Second Power Interconnection Project follows an earlier Bank-financed power interconnection project between the two countries, and builds on its accrued benefits over the last 10 years. It will enable the construction of about 300 km of interconnector lines, 170 km of transmission lines to reinforce the network within Ethiopia, and new construction and expansion of substations in the two countries. In Djibouti, expected benefits include a 65% increase in customer connections and a sharp reduction in the use of thermal generation plants from 100% to around 16%. In Ethiopia, the project would lead to higher incomes from the power trade which over the last 10 years stood at over $275 million in revenue from power exports.
Upon completion, Ethiopia’s revenue from power exports will increase, while at the same time boosting Djibouti’s access to reliable, affordable, and clean electricity and lowering its greenhouse gas emissions.
“By enhancing economic ties through increased cross-border power trade and improved economic competitiveness, the project will contribute towards harnessing regional peace and stability and addressing regional fragility,” said Dr. Abdul Kamara, Deputy Director General, East Africa Regional Development and Business Delivery Office of the African Development Bank.
The Board of Directors of the African Development Bank Group approved funding of both projects on 7 July 2021. The grant agreements were signed on 21 July 2021 by Ethiopian Finance Minister Ahmed Shide, and Kamara.
The African Development Bank is a major player in Ethiopia’s development agenda and currently has operations valued at about $1.76 billion, covering basic services, energy, transport, water supply and sanitation, agriculture, governance, and the private sector.
Nigeria Moves To Boost Export With N50B Expansion Facility
Nigeria is poised to boost its non-oil exports leveraging the Economic Community of West African States (ECOWAS) Trade Promotion Organisations (TPOs) Network.
The network, which was recently inaugurated, is geared towards increasing the volume of trade within the region.
The Executive Director of the Nigerian Export Promotion Council (NEPC), Segun Awolowo is also the inaugural President of the ECOWAS TPOs.
The NEPC has started repositioning the nation’s export through the implementation of its N50 billion Export Expansion Facility Programme (EEFP).
The EEFP is a part of the Economic Sustainability Plan (ESP) whose development and implementation is being led by Vice President Yemi Osinbajo.
EEFP is expected to significantly raise the volume of non-oil exports in Nigeria, and it is a spin-off of the Zero Oil Plan developed by NEPC and approved by President Muhammadu Buhari.
Besides providing financial support for the average Nigerian exporter, the EEFP will engender the establishment of top-notch warehouses in the country, close to airports where Nigerian goods meant for export would be packaged to global competitive standards ahead of their exportation.
The EEFP, in line with the ESP, is focused on cushioning the effects of the COVID-19 pandemic on the non-oil export sector, thereby safeguarding jobs and creating new ones.
Earlier in March, the Minister of Industry, Trade and Investment, Chief Niyi Adebayo, inaugurated the EEFP and the first online Grant Management Portal (GMP) for non-oil exports.
While the EEFP is being implemented by the NEPC, the Federal Ministry of Industry, Trade and Investment are the supervisory body over the agency and its operations.
The programme anticipated 500 beneficiaries since the inauguration but it has received more than 3,500 applications for the grant, out of which more than 2,000 were verified after meeting the eligibility criteria.
Federal Government officials say further details and plans on disbursement to final successful beneficiaries are being awaited.
More so, Adebayo said that aside from being an intervention to save and create jobs, the programme would support resilience in shoring up the foreign exchange, diversification, modernisation of Nigeria’s economy and acceleration of economic growth and economic support.
Under the EEPF, there are 16 programmes as approved in the Implementation Work plan under seven workstreams.
The workstreams are Capacity Building, Emergency Interventions, Export Aggregation, Export Inclusion, Export Trade facilitation, Institutional Strengthening and Market Development.
The Emergency Intervention is to support existing exporters in responding to shocks caused by COVID-19, while Market Development involves penetrating identified export markets as value chain analysis for priority products, leveraging Africa Growth and Opportunities Act (AGOA) and other trade treaties.
Considering the significant role it plays in growing the Nigerian economy, the Micro, Small and Medium Enterprises (MSMEs) sector is the target group of support from the EEFP and the Export Development Fund (EDF).
At the recent inauguration of the TPO Network, Osinbajo said that there was the need to expand intra-regional trade in the ECOWAS sub-region, with the opportunities presented by the African Continental Free Trade Area (AfCFTA) agreement.
On his part, Awolowo had said that the network would work towards facilitating the ease of trade for MSMEs within the ECOWAS region and Africa in general.
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