Solving Unemployment And Youth Entrepreneurship In Nigeria

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Abstract

With a high rate of unemployment ravaging Nigeria, the role of entrepreneurship in job creation and unemployment reduction is well established. Entrepreneurship could potentially play a vital role in creating self-employment for these young people. The current paper investigates the effect of entrepreneurial activities on the rate of unemployment, using Nigeria as a case study. To obtain this, the study aim to focus on youth unemployment as a problem has to be solved, and whether this can be done passing through entrepreneurship. A couple of youths were interviewed on the subject matter and the results generally validate the literature findings. It displays evidence signifying that the relationship between unemployment and entrepreneurship is shielded with ambiguity. Empirical support for Schumpeter effect is found, but no evidence for refugee effect. To this aim, the youth unemployment problem would not be solved by entrepreneurship unless an active role of government and private sector to support entrepreneurial education. Youth self-employment policies must be embraced by the broader context of the country’s economic policy in order to solve the unemployment situation in Nigeria.

Chapter One

Introduction

1.1 Background to the Study

Unemployment, both of the educated and the uneducated manpower, has become one of the most topical and thorny issues in contemporary Nigeria. The unemployment situation has changed from previous position marked by prolonged period of unemployment and misemployment, to one in which graduates of tertiary institutions have to normally wait for a long time before getting a first job – if at all. At the beginning of this millennium, employment crisis have emerged as the most challenging issues confronting many world economies. The continuing global economic slowdown and uncertain economic prospects have resulted in a grim global economic landscape. This plunged many economies into deep recession, the ripple effects of which have affected the job markets. These effects are more pronounced in the developing and underdeveloped countries of the world, with increased unemployment being the outcome (Hassan, 2013).

Attainment of full employment mostly in the developing economies, it is agreed can reduce poverty and foster the growth of their economies. The idea is based on the linkage between income and poverty (Boateng cited in Adawo, Essien and Ekpo, 2012). Unemployment, it is also noted, generates low income or no income and therefore results in low or poor living standard. Unemployment represents wasted resources (Mankiw cited in Adawo et al., 2012). Unemployed labor has the potential to contribute to national income but are not doing so because they are jobless. Reduction of joblessness is a major concern of every responsible government all over the globe. However, given free market economies, zero unemployment cannot be guaranteed. Friction in the labor market will always be there.

Nigeria has one of the highest levels of youth unemployment in the world with 60-65% (Federal Ministry of Labour and Productivity Report, 2008 cited in Hassan, 2013). These are mostly young adults that have graduated from universities and polytechnics or institutions of higher learning. Available estimate shows that about 1.6 million persons, mostly young adult, graduate annually. In addition to this number, about 3.8 million others are certificate carrying youths that have no formal education, or have completed primary or secondary school, or dropped out from tertiary institutions all of which are annually poured into an already saturated labour market (Federal Ministry of Labour and Productivity Report, 2008 cited in Hassan, 2013).

Many of the youths are not productive and have actually been reduced to petty traders and smugglers; in many instances, the growth in the phenomenon of it is observable that unemployment rate in Nigeria has reached unacceptable dimension. Indeed, the labor market in Nigeria is dangerously close to saturation. Indeed, Ekpo (cited in Adawo et al., 2012) supports the fact that Nigeria’s unemployment situation is unacceptable.

Unemployment occurs when people are without jobs and they have actively sought for job within the past four weeks (Wikipedia, 2010). Unemployment refers to a situation where people who are willing and capable of working are unable to find suitable paid employment (Fajana cited in Emeh et al., 2012). Unemployment has been defined as a situation in which people who are willing to work at the prevailing wage rate are unable to find jobs. It is one of the macro-economic problems which every responsible government is expected to monitor and regulate. The higher the unemployment rate in an economy the higher would be the poverty level and associated welfare challenges.

Unemployment is one of the developmental problems that face every developing economy in the 21st century (Patterson et al cited in Emeh, et al., 2012), and Nigeria is not exempted. Its impact is felt more by the youths, leading to youth unemployment. trafficking in persons and child labor can be attributed to poverty and joblessness among the youths. For a few who are able to find their way out of the country to work in other countries, their departure has contributed to depleting the quality of human capital resources in the country. It is against this background that this study is inspired to investigate the causes, implications and most importantly “Solving Unemployment Problems in Nigeria” with a special reference to Lagos State.

1.2 Statement of the Problem:

The unconducive economic conditions in Nigeria, namely lack of electricity, poor road network, poor communication system, insecurity, kidnapping, etc., have caused the close down of many companies, throwing many people into labor market. In a certain year over 100 textile factories closed shops across the country and the trend continues. Principal among other reasons for this is lack of electricity. Factories depend on generators to power their factories and this is inefficient and increases unit cost of production and makes their products uncompetitive.

Yet the country becomes a dumping ground for all manners of imports. Some other factors that account for unemployment in Nigeria include unconcerned attitude of Local Governments to create employment, non-diversification of the economy, lack of serious emphasis on skill acquisition, no serious attention is given to the informal sector to empower the sector and even outstanding corpers are still thrown to the labor market.

Another unfortunate development is that our school system produces “quarter” baked graduates, majority of them are unemployable. Most employers prefer Nigerians with foreign certificates. Nigerian universities produce graduates whose skills are suspect, making it difficult for them to be recruited. The reasons for this include admission overload, poor funding of universities and the “sorting” syndrome. Arising from the issue of poor funding followed by incessant strikes in the university system. Between 1993 and 2003, there were 9 strikes (Okebukola, 2006) culminating in a period loss of 32.75 months or approximately an equivalent of 8.2 semesters (Adawo, Essien and Ekpo, 2012).

Unemployment, underemployment and unmitigated rural-urban migration have come to characterize the Nigerian labour market. This has been compounded by frightening number of joiners as schools, polytechnics and universities churn out leavers in a geometric progression. This has impact-ted on the rate of social vices like robbery, kidnapping, prostitution, human trafficking, child abuse and unfair labour practices experienced mostly by the unemployed youths, which are other noticeable dimensions to the complexities of contemporary Nigerian employment dynamics. According to the National Manpower Board, (2009) the Nigeria labour market could barely absorb 10% of the over 3.8 million persons turned out by the Nigeria educational system on a yearly basis. In brief, the employment trends in Nigeria indicate that, without a concerted effort to tackle the problems of unemployment and underemployment the situation could get worse. Therefore this research study will articulate practical and workable solutions to this rather macro-economic evil in Nigeria with a special to Lagos State.

1.3 Objectives of the Study:

The major objective of this study is to proffer solution to unemployment problems in Nigeria. While other specific objectives include;

To find out the impact of youth entrepreneurship on job creation.
To examine the impact of industrialization on standard of living.
To examine the effect of unemployment on the rise of social vices.
To examine the relationship between job vacancies and the rate of unemployment in Nigeria.
To find out the effect of unemployment on economic growth and development in Nigeria.
To provide plausible solutions to unemployment problems in Nigeria.

1.5 Research Hypotheses:

The researcher intends to test the following hypotheses at 0.05 level of significance;

Hypothesis One:

Ho: There is no significant relationship between youth entrepreneurship and job creation in Nigeria.
Hi: There is a significant relationship between youth entrepreneurship and job creation in Nigeria.

Hypothesis Two:

Ho: There is no significant relationship between job vacancies and the rate of unemployment in Nigeria.
Hi: There is a significant relationship between job vacancies and the rate of unemployment in Nigeria.

1.5 Significance of the Study

This paper sets out to discuss the role of entrepreneurship education and training in solving the lingering problem of unemployment, particularly among the youth, in developing countries such as Nigeria. This role includes developing human resources through formal programs in entrepreneurship education, training teachers to implement new curricula that emphasize the development of entrepreneurship knowledge and skills, and promoting entrepreneurship and small enterprise creation and growth within local communities through training programs and consultancy services. This study also highlights the importance of supporting entrepreneurship skills by embedding entrepreneurship teaching throughout the education system, providing information, advice, coaching and mentoring, facilitating access to financing and offering support infrastructure for business start-up with the penultimate result of mitigating youth unemployment problem in the country. The paper further sees hope for Nigeria only if Youths are mobilized by way of genuinely socializing them into taking their roles in the economic development processes. The study concludes with a description of an educational change initiative that is supporting the creation of an “enterprise culture” through entrepreneurship education.

1.7 Scope and Limitation of the Study

This study is primary concerned with solving unemployment and youth entrepreneurship in Nigeria. The research was conducted in ikeja area of Lagos state. Some constraints were experienced by the researcher, among which are time, attitude of respondents, distance and finance. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.8 Definition of Terms

Unemployment:

Unemployment or joblessness is the situation of actively looking for employment, but not being currently employed. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.

Entrepreneurship:

The capacity and willingness to develop organize and manage a business venture along with any of its risks in order to make a profit.

Youth:

Is best understood as a period of transition from the dependence of childhood to adulthood’s independence and awareness of our interdependence as members of a community.

1.9 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows; Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain and critically analyze the subject solving unemployment and youth entrepreneurship in Nigeria.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing youth unemployment and entrepreneurship in Nigeria.

5.2 Summary

This study was on solving unemployment and youth entrepreneurship in Nigeria. Three objectives were raised which included: To find out the impact of youth entrepreneurship on job creation, to examine the impact of industrialization on standard of living, to examine the effect of unemployment on the rise of social vices, to examine the relationship between job vacancies and the rate of unemployment in Nigeria, to find out the effect of unemployment on economic growth and development in Nigeria, to provide plausible solutions to unemployment problems in Nigeria.

5.3 Conclusion

Entrepreneurship can become a solution to unemployment in Africa but everyone taking that route must be fully equipped. There is a huge need in different fields that can be filled by innovative young graduates: there is a huge need for social entrepreneurs; a huge need for agriculture based businesses and a huge need for technology related businesses just to name a few. If graduates decide to seek jobs but to no avail, they can just look for a need in their community that they can fill and make a business out of it. If done right with the necessary support, being self-employed is more rewarding than working for someone. Instead of blaming the government for unemployment, young people should be encouraged go out there and find solutions for themselves and their peers through entrepreneurial education. What will be seen happening will be a group of young people who are operating successful businesses and creating employment and this may reduce the rate of unemployment? Africa is mostly dependent on natural resources. If individuals are well equipped with entrepreneurial skills, young people can stay focused and do their best to build successful and sustainable businesses. This will end up contributing massively to the economy of their countries. It is evident that there are many brilliant young people in Africa especially in Nigeria with amazing ideas. What is needed is for them to be empowered; for them to be encouraged to take all those ideas and turn them into reality; for them to be encouraged to stop depending too much on the government and start fending for themselves. Unemployment is a serious problem but entrepreneurship is one solution that young people can consider. It is increasingly being appreciated today that small businesses offer the best prospects for the expansion of employment opportunities in this country. This is because avenues for wage employment (job) in the formal sector are dwindling. It is important that local entrepreneurial potentials are developed; otherwise, there would be little prospects for solving the high unemployment rate problem confronting the nation Nigeria. There is therefore the need to give orientation, information and requisite training and support to channel the creative and innovative ideas of young people into starting their own businesses in order to be employed and also be employers of labour.

5.4 Recommendation

One of the ways to ensure employability of graduates is to include, ‘enterprise skills’ as a fundamental component of academic provision at all levels. This clearly makes sense as a strong case can be made of the need for all students and graduates to have access to opportunities that will enhance their employability. It is also possible to identify methods by which such an objective can be achieved: for example, through work placements, student projects with employers and career development related activities. (This is already in practice in the polytechnics and for some courses in the universities). This is buttressed that Entrepreneurship education as general education across all levels of education should be made a policy issue. Entrepreneurship will be important to more students, and it is essential that for those students, appropriate opportunities and support is made available when they need it: for example, the provision of modules and workshops supporting entrepreneurial activity. It may be that because of the nature, some courses may feel it would be beneficial to embed opportunities for their students to engage with this type of skill development. But this will not apply to all courses and as such it would not be appropriate to recommend that entrepreneurship development activities be embedded in such courses. It would be important for ‘Teaching and Learning’ strategies to recognize that some staff will be less experienced and knowledgeable about adopting such approaches to the delivery of their curriculum. Therefore appropriate training opportunities need to be available together with ongoing support in order to maximize the success of this approach. Rae [2005] agrees that in order to implement such a strategy effectively, university staff will need leadership, encouragement, inspiration and updating on current practices. Therefore, practicing teachers at all levels of education should undergo professional training through seminars, workshops and other in-service training to acquire knowledge and skills in the adoption of entrepreneurship – driven instructional methodology. Dimensions of entrepreneurship should be a component of teacher preparation curricular. Federal and State Ministries of Education should build resource centers and networks for exchange of good educational practices. School administrators should establish linkages with entrepreneurs. Another key response in promoting employability through entrepreneurship development is the adoption of some form of employability/enterprise/entrepreneurship award. There are essentially two approaches to this response. The government can either identify modules, elements of programs and /or curricular experiences with employability, ‘enterprise skills’ or entrepreneurship activities. These can then be ‘badged’ as suitable for contributing towards the final award which is an integral part of the degree program. Alternatively additional modules, workshops and co-curricular activities can be accredited in such a way that they contribute towards a separate additional award over and above the degree program

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