MAN’s Warning On Unemployment



AGAINST the backdrop of the dip in the country’s economy over the years, the Manufacturers Association of Nigeria (MAN) deserves a hearing over its latest warning that more Nigerians might be thrown into the already bloated labour market if certain economic decisions were not addressed by the government. It is incontestable that the local manufacturing sector is one in a crisis.

So far, nobody is giving the sector – a key component of the economy – any compliments for its measured successes, considering the myriad of challenges in the economic environment. Among the lot are dumping of competing foreign products and bottlenecks created by the system in the attempts to source raw materials. In fact, there is near-absence of productive manufacturing, which might have accounted for a paltry 30 percent contribution to the GDP according to experts.

High unemployment remains a major challenge in the country, specifically among teeming youths. Manufacturers have canvassed for an atmosphere conducive to reduce the impact of unemployment, and to enhance conscious jobs revitalization.

Specifically, the manufacturers’ group, this time, expressed fears that more jobs are at risk as more of their members close shop owing to inclement economic policies which are stifling their members. They warned that such policies neither promote a country’s economic interests, nor benefit workers and employers in the long run. In the complaints bag is multiple tax regimes at federal and state levels. The result is that citizens are paying more for locally produced goods. Micro and macro businesses are also affected by multiple taxations. A harmonised tax policy needs to be considered.

The association was complemented in its claim by the Lagos Chamber of Commerce and Industry President, Remi Bello who, quoting World Bank data, said Nigeria actually dipped in protecting investor interest this year from its position in 2014. The regulatory environment must show a good sense of certainty and consistency in policy, he added.

MAN’s fear is not unjustified as it reasons that if government succumbed to the temptation to impose additional taxes on its members, against the drop in revenue from international oil prices, it will certainly jerk up cost of production, which may further decapitate their members.

Moreover, the manufacturing environment has been compounded by erratic public electricity supply, perennial fuel scarcity, poor infrastructure, high interest rates and general insecurity – factors, which compel additional cost, as companies struggle to stay afloat. These constitute great burden on the group. Its argument then that “all factors negate healthy industrialisation and have made it difficult for Made-in-Nigeria products to compete favourably with products from other economies” is reasonable enough to attract government’s consideration as it charts the economic roadmap for 2016.

The problem on ground calls for a multi-pronged solution approach. Towards this, the Central Bank’s (CBN) fresh announcement of a target of one million Nigerians to benefit from its soft loans through the Small, Medium Enterprises (SMEs) subsector and the government signing MoU with a Chinese firm on ICT that targets jobs for 2,000 people are promising, though grossly insufficient, to revitalize the ailing jobs market. Even then, the implementation thrusts must be right, if the promise is to be fulfilled. Sadly, shoddy implementation of lofty ideas has been a sore point in policy pursuits over time. Whatever is done, therefore, should be in the best interests of the economy.

Reality checks on official statistics show the grim situation in the unemployment market. Figures from the last dispatches of the Nigerian Bureau of Statistics (NBS) say the unemployment rate climbed to 7.5 percent in the first quarter of this year compared to 6.4 % in Q4 of 2014 although unofficial figures dispute the claim citing inadequate enumeration areas. The distribution ratio for 2010-2014 puts the percentage at 21.4(2010), 2012 at 27.4%, which climbed down to 24.7% in 2013. All told, these are indices of an economy with unemployment situation that needs no further complications.

In taking NBS to task, sceptics say the statisticians’ new rate of unemployment put at less than 10% is suspect, and suggests that job loss is not a serious challenge in the economy hence “an unserious way to deal with a national problem”. But the Statistician-General warned against ‘sentiment’ because it was done on the “basis of accepted international best practices”. In reality, the slump in the economy, and absence of jobs, cannot be wished away. All contending parties should work together for more credible propositions.

Simply put: if a high percentage of labour force is unemployed, the economy is not performing satisfactorily. There ought to be a sustainable collaboration between government and the organised sector (OPS) to stabilise economic development efforts, including employment generation. Educational programmes can also be overhauled to meet needs in existing knowledge gaps in the real sector, if only to emphasise skill capacity and deemphasise paper qualifications.

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