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While I was away in
the South East I was pleased to get an sms from my good friend Volker
Treichel that he is back in town. Volker had been Chief Economist of
the World Bank in Nigeria for several years. A German national, Volker
understands the Nigerian political economy rather well.

Towards year’s end
last year he had spearheaded a study on Growth and Employment in
Nigeria. His basic message was a simple but alarming one: the economy
is trundling along okay, but the people are not.

This message was
reinforced at last week’s seminar on the new Growth and Employment Pact
initiative where finance minister Olusegun Aganga reiterated the
government’s determination to mainstream job-creation within the
country’s economic growth paradigm. The minister noted that the economy
had been growing at an average of 6 percent during 2005-2009 even as
unemployment has continued to rise.

According to the
National Bureau of Statistics, unemployment increased from 11.5 percent
in 2005 to 19 percent in 2009. With our current estimated population of
145 million,

this means that
27.5 million Nigerians are without jobs; a figure that is more than the
total population of Ghana (23.35 million) and Mozambique (22.38
million). If one also considers the sober fact that an estimated 94
percent of the employed are in the informal sector, then one gets a
grim picture of our national tragedy.

To be sure,
unemployment is an increasingly worrying trend the world over.
According to Angel Gurria, Secretary-General of the Paris-based OECD,
unemployment in the richest countries has risen from an average of 5
percent to the current 9.9 percent. Within the 27-member European
Union, the jobless stand at 23.06 million, a figure that significantly
less than Nigeria’s. What is more, in the advanced welfare democracies,
every unemployed citizen has access to social benefits.

In Britain, this
would include a free council flat and a monthly allowance of £400
(120,000 naira). A Scottish friend who was visiting at our home
recently told me that some of his unemployed nephews and nieces have
virtually no incentive to work, since their welfare benefits are only
marginally lower than what is on offer on the lower-skilled jobs market.

Contrast this with
Nigeria, where there are no welfare benefits to speak, within an
economy that Nobel laureate Paul Krugman would describe as one of
“diminished expectations”.

Over the past
decade, the billions of dollars of inward investments that we have
witnessed have been predominantly in the oil and gas sector, telecoms
and banking – sectors that do not generate a great deal of jobs.

Our manufacturing
sector has been virtually comatose, with several firms having relocated
to Ghana and other neighbouring countries, thanks to lack of
electricity, the high rate of criminal violence and a generally
inhospitable business climate. With an inflation rate that has averaged
more than 10 percent and with all the prevailing structural bottlenecks
in our economy, things have never looked more hopeless. Our youths are
understandably angry, with an army of unemployed that are large enough
to stage a violent national uprising. We are sitting on a time bomb.

It is an irony that
international development agencies have been more concerned about the
unfolding drama than succeeding Nigerian governments. The UK Department
for International Development (DFID) in collaboration with the World
Bank recently launched the Growth Employment in States (GEMS)
programme. GEMS seeks to boost the productive sector by improving the
business environment so as to accelerate private investment while
creating jobs and boosting incomes.

The two agencies
have contributed a total of US$300 million to the project, which will
initially cover four selected states of Lagos, Kano, Kaduna and Cross
River on a pilot basis. Among the sectors to be covered are wholesale
and retail trade, meat and leather, hospitality (hotels and tourism),
entertainment (music, films, Nollywood) and construction and real
estate.

The Growth and
Employment Pact opens up a new window of opportunity to resolutely
address one of our nation’s gravest development challenges. It calls
for action, not rhetoric. We must work across the three tiers of
government to launch a massive programme for the rebirth of the non-oil
sector while boosting jobs and getting our people back to work.

We have to think
outside the box. If we could put aside 200 billion naira every year for
the next 5 years we could take an average of some 1 million youths off
the streets by engaging them in the construction of rural roads, rail
tracks and other such direct labour public works. It would have such a
huge impact on the economy; restoring hope, boosting aggregate demand
and giving a massive push to growth and long-term sustainable
development.

During the 1930s
Great Depression in the USA, President Franklin Roosevelt applied this
public works approach in his New Deal strategy, with impressive
results. President Barak Obama is following the same philosophy, with
modifications. The long-suffering people of Nigeria expect nothing less.