Nigeria Economy | |
Nigeria Economy | |
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Wednesday, July 22, 2020 / 09:54
AM / by FDC / Header Image Credit: Inside Hired
Companies around the world are adopting a more
cautious approach to their operations as they struggle to stay afloat, despite
the prevailing economic realities brought on by the coronavirus pandemic. The
imposition of lockdown measures has had a severe impact on business operations
and raised the threat of massive job cuts as companies struggle to survive the
nightmare of the century. For instance, the United States reported a spike in
its unemployment rate to 14.7% in April 2020 the highest since the inception of
the unemployment survey before it eased to 13.3% in May 2020.Although the
unemployment statistics of many African economies including Nigeria is not up
to date, these countries are also likely to experience a surge in unemployment
rates. Nigeria's unemployment rate was last estimated at 23.1% in Q3'185 and is
projected to rise to 33.6% by Q4'20.
Employment Generation
amid Strained Public Finances
The Nigerian government's ability to create employment
for its growing youthful population has been gravely undermined by the plunge
in oil revenue due to the crash in global oil prices. This has necessitated
several revisions to the country's 2020 budget and significant reductions in
certain planned fiscal expenditure. Although the oil price benchmark was
reviewed upwards to $28 per day from $25 per day, according to the recently
passed revised budget, the fiscal revenue projection is based on expected oil
production of 1.8 million barrels per day (mbpd)
This is
above the new OPEC quota of 1.4mbpd.8 Invariably, it could be as unrealistic as
the newly revised 2020 budget of N10.81trn, which is 2.08% higher than the
initial budget of N10.59trn.9 In other words, with government revenue in
tatters, the feasibility of planned fiscal spending is already a mirage and so
is employment creation. This is aggravated by the possibility of massive
lay-offs of workers by firms operating in the country, especially companies
offering non-essential services who have been the most affected by the lockdown
measures. A number of companies have reported a steep decline in earnings in
Q1'20, largely attributed to the unintended consequences of the COVID-19
lockdown measures.
Way forward
The
implication of the COVID-19 outbreak on Nigeria's employment generation
capacity presents Nigerian youths with a need to reposition themselves to be
relevant in the post-COVID-19 labor market. How can this be achieved?
Digital skills: An
interesting realization of the COVID-19 pandemic is the practicability of
virtual business interactions and operations. This highlights the importance of
ICT skills and personal development in order to be able to use ICT knowledge
for business operations. Finding ways to make one's skill or services marketable
digitally will also help to expand the reach of the business or service for
better productivity.
Take advantage of attractive sectors of the economy, particularly the
agricultural sector: Some sectors
have become priority for the government following the outbreak of COVID-19.
Loan initiatives to the agricultural sector and the emphasis on patronage of
made-in-Nigeria goods can be favorably explored for productive investments and
self-employment.
Entrepreneurial initiatives:
Although entrepreneurship has been frequently alluded to as a veritable means
of job creation, the present realities in the economy and the advent of
COVID-19 have helped to reinforce this stance. The need to develop
entrepreneurial initiatives is closely linked to taking advantage of attractive
sectors. For instance, some individuals began manufacturing improvised
facemasks and shields after the government made it compulsory to wear facemasks
in public places as part of measures to curb the further spread of COVID-19 in
the country.
Conclusion
With
the business environment and work space redefined in line with requirements for
social distancing measures and the obvious constraints on job creation by the
government, it has become imperative for Nigerians, especially the unemployed
youths, to carve a niche for themselves in the labor market. This
individualistic positive orientation could have a significant impact on the
collective development of the economy as a whole and position the country for
quick recovery from the economic impact of the COVID-19 pandemic.
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