Job Creation: Why Governments Fail

With the recent data on the labour force, the National Bureau of Statistics wants Nigerians to believe unemployment is not a menace in the country, and that only 4.1 percent of Nigerians are actively looking for jobs. But with an unemployment rate of 37.7 percent as of 2022, the people are left scratching their heads, pondering the glaring disconnect between official narratives and the reality on the ground.

Meanwhile, the rising or plummeting unemployment rate is not the main menace. The real problem is that for several years, unemployment has always been on the rise, despite several government’s job creation campaigns. Have you ever wondered why? Why does it seem the government has done little or nothing? 

The answer lies in one of these two: either the government’s effort is never enough or the government’s way is never the way.

However, to say the government has not done enough would be an injustice to the politicians who struggle every time to create jobs, especially when such schemes could buy them reelection. From the National Directorate of Employment (NDE) to the Youth Enterprise with Innovation in Nigeria (YouWIN), billions of Naira have been invested in tackling unemployment. 

It’s not that the government has done nothing; it’s that the government’s way is not the way. The government has indeed invested in various programs and initiatives aimed at job creation. Even most recently, the N-Power program, launched in 2016, has engaged hundreds of thousands of youths in various sectors. However, these efforts, though commendable, are akin to putting a band-aid on a gaping wound. 

The truth is, it’s not the government’s primary responsibility to create jobs; that’s the role of the private sector. Many economists agreed with this, even the politicians in government. The government’s role is to create an enabling environment for these private entities to thrive. Unfortunately, the Nigerian government has not been particularly supportive of the private sector. From multiple taxation to bureaucratic bottlenecks, the environment has been anything but enabling. According to the World Bank’s Doing Business report, Nigeria ranks 131 out of 190 countries in ease of doing business. This is a clear indicator that the government’s approach needs a paradigm shift.

The Importance of the Private Sector

The private sector is the engine room of any economy. It brings innovation, increases competition, and most importantly, creates jobs. A thriving private sector can significantly reduce and potentially eradicate unemployment in Nigeria. For instance, the Nigerian tech startup ecosystem, despite all odds, has created thousands of jobs and attracted millions of dollars in investment. Imagine what could be achieved if the government focused on creating a conducive environment for such sectors to thrive.

So, what does an enabling environment look like? It involves streamlining the business registration process and reducing multiple taxation.

The new Dangote Refinery is believed to create about 250,000 jobs. Just a significant investment in the oil and gas industry. Now imagine having hundreds of such investments in the country. But no! Research shows that the bureaucratic burden is deterring private investment success in the oil and gas industry, discouraging investors.

We believe it is time for a new narrative. The government has done a lot, but it failed. Not because its effort is not enough, but its way is not the way.