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.
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.
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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