Abstract
In enhancing youth employability and entrepreneurship in Nigeria, the designing and funding of youth development programmes adopting a national approach is necessary but not a sufficient approach to poverty reduction. This is because there are discrepancies in the nature and rate of unemployment in various sectors, regions, communities, urban and rural areas in the country which cannot be tackled using a national approach. In other words, youth development programmes should concentrate, from formulation to implementation and feedback stage, on locality, nature of unemployment, basic natural resources available in a particular community; existing skills and businesses, which are usually practiced at subsistence level and other unique characteristics prevalent in such communities. Consequently, this study propose a new assessment framework that focuses on the local labour market that can employed in enhancing youth employability in Nigeria. In line with this, this study adopted the Positive Youth Model and evaluated the Millennium Village Projects (MVP) in Pampaida and Ikaram-Ibaram in Kaduna and Ondo State respectively to assess the viability of such projects towards enhancing youth employability and entrepreneurship .On the basis of the findings, this study recommends the replication of such project in all 9,555 wards in the country putting into consideration each ward’s comparative advantage in terms of skills and other resource endowment. These steps are necessary if Nigeria must achieve its core development goals.
Keywords: Enhancing,Youth employability; Entrepreneurship; Local labour market; Positive youth development model
JEL Classification: L26
1.Introduction
Unemployment is a major cause of concern for governments around the world. The subject evokes pessimistic prophesies of a fast-approaching future in which tens of millions of people are unable to find jobs, technology replaces human labour, welfare systems collapse under an unbearable burden, youths have less economic opportunity and markets and governments are powerless to do anything about it. None of these outcomes is inevitable or even likely, provided countries act decisively to meet the challenge. A national approach cannot do full justice to this special circumstances, problems and potentials of specific countries due to its heterogeneous nature, but it can be addressed from the local level perception. In Nigeria, due to the inability of government expenditure and foreign direct investments to generate employment substantially in the country, various efforts have been made to enhance entrepreneurship and employment in the country. Specifically, emphases have been placed on the development of youths using a national approach. The importance of concentration on youth development can be seen from the percentage of the total population that is youths. According to Nigeria’s National Planning commission (NPC 2010), out of over 140 million people recorded in the 2006 population census in Nigeria, 77.44 per cent (108,749,759) were less than 35 years of age. This is a clear reason why the Nigerian government is continually striving to introduce youth development programmes in the country.
The focus of National Directorate of Employment (NDE) was to equip youths with the necessary entrepreneurship skills because acquiring such skills is seen as one of the major ways of combating youth unemployment prevalent in the country. The National Baseline Youth Survey (2012) also posits that young people are key actors and a driving force for global development and peace; thus, they are critical partners in the development of nations and their contribution to society must be measured in terms of productive pursuits of service to humanity. Hitherto, in Nigeria and other countries, it was believed that the government was the sole entity required to reduce the unemployment level. This was based on Keynes’ postulation that during recession and other natural and economic unforeseen mishappenings, the government has a major role to play in ensuring that the demand for labour is continuously adjusted to meet labour supply in the country. This approach was found to be ineffective in the Nigerian experience of the Dutch Disease which followed few years after the discovery of crude oil. This led to the abandonment of the view that the government will reduce unemployment level in the country through its spending. A major development programme in Nigeria as a result of the effect of the Dutch disease was the Structural Adjustment Programme (SAP) which commenced in 1986. During its implementation, a development programmes to tackling unemployment was adopted. Although this programme had, to an extent, a positive impact on unemployment reduction, it was short lived as there were no similar follow up programmes after the abandonment of the programme. In recent times more focus has been placed on youth development programmes. This is so because in Nigeria, a large percentage of the population are youths which is seen as a major resource that should be harnessed and groomed as they also form a large proportion of the Nigeria’s labour force. The major youth development programme that has been carried out in Nigeria apart from the various national development plans was in 1986 during the Structural Adjustment Programme (SAP). Thus, youth development in Nigeria can be analyzed based on the pre-SAP Era, SAP Era and the post-SAP Era. During the pre-SAP era, there was the discovery of crude oil in Nigeria which led to a rapid increase in the country’s revenue. This rapid increase in revenue had major adverse effects on Nigeria’s economy not necessarily due to the increase in revenue but due to the management of this newly found source of revenue. The increase in income led to an increase in the demand for foreign goods; thus leading to an increase in import. Increased importation led to current account deficits as there was no commensurate increase in export. Export could not meet up with import level because of neglect of the agricultural sector and manufacturing sector for major investments in the petroleum sector. Therefore, agricultural output in the country could not meet demands for export to other countries. Also the increase in revenue led to an over valuation of Nigerian currency (the naira), thus making importation more favourable and making Nigeria’s produce from the agricultural sector uncompetitive in the international market.
Over the years there has been a continuous shift of labour from other sectors of the economy to the petroleum sector to a point where supply labour exceeded demand. To solve the problems created by this ugly situation, a structural adjustment programme was introduced in 1986. According to Central Bank of Nigeria (CBN 2011), the adoption of the Structural Adjustment Programme (SAP) initially for two years (July 1986-June 1988), was the major response to the dwindling oil resources, macroeconomic policy distortions and the increasing need to diversify the productive base of the economy. During the implantation of SAP between 1988 and 1989, the economy witnessed a number of policy reversals in an attempt to cushion the adverse effects of the belt-tightening measures accompanying its implementation. As a result of this, some of the gains hitherto witnessed in the programme were gradually eroded in those two years. The post SAP era was flooded with various youth development programmes not only to reduce unemployment in the country but also for capacity building of youths in the country, although not much was recorded as youth unemployment continued to be on the increase. After SAP various poverty alleviations programmes that are national in implementation have been introduced without necessarily considering the rural areas where youth unemployment is more prevalent. The same trend is true for the industrialized nations. Between 1990 and 2009, total employment in OECD countries rose by 87 million jobs or 30 percent. During this period, unemployment rose by 15.4 million persons, representing a doubling of the average unemployment rate. The primary reason for rising unemployment was that overall employment rates have risen steadily in the more industrially developed nations largely due to a 22 percent increase in the participation of women in the work force. Thus, more people are working than ever before, yet at the same time more youths that represents a large proportion of the population are unemployed. During this period, the employment rate in the U.S. rose from 38 percent to 46 percent. Japan has created 27 million new jobs since 1980 and its employment rate has risen from 43 percent to over 51 percent. In the European Community the employment rate has declined by 1 percent since 1985 and is presently just under 41 percent (Farrell and Mandel, 2003).
This study therefore proposes a youth entrepreneurship and enhancement framework that focuses on the local labour market in line with Positive Youth Development (PYD) model. The essence of this is not just to assess the impact of these programmes but also to discover ways of enhancing youth employability and entrepreneurship considering the locality natural resource endowment and comparative advantage. Over the years the importance of labour force in economic activities has been established. Despite this establishment, there exist high levels of unemployment in countries all over the world, especially in developing economies and this has lead to a situation where developing countries experienced extensive economic growth without necessarily decrease in poverty, unemployment and inequality (World Bank 2005). This increase in unemployment level absorbs increasing output level of economic activities as there exist high rate of dependency, thus, reducing the per capita income of individuals in the economy. Due to this dampening effect of high unemployment rate, the findings from this study may help youths, organizations, governments and other stakeholders to efficiently effect youth development programmes in various sectors, states and regions in Nigeria.
An assessment conducted by World Bank (2010) revealed that Africa has extremely low level of human capital formation, as measured by levels of literacy. In several social indicators such as life expectancy, secondary-school enrolment, infant mortality, and population per physician, Africa has only in the 1990s reached the corresponding Asian levels. Sub-Saharan Africa (SSA) in 1990 was, however, still far worse off than Asia with respect to primary-school enrolment and adult illiteracy, which were 68 percent and 50 percent in SSA but 80 percent and 35 percent in Asia. In terms of growth rates, Africa has had the most spectacular performance in the area of education (relative to the state at independence), but one cannot deny that SSA was, and remains, the region with the highest illiteracy rates and least access to basic health and social services. Presently, the labour market situation remains particularly bleak for the world’s youth. The ILO estimates global youth unemployment at 73.8 million in 2012; a rate of 12.6 per cent, versus 12.4 per cent in the previous year. Global youth unemployment has increased by 3.4 million since 2007. The rise in youth unemployment is occurring alongside a withdrawal of young people from the labour market, with 22.9 million fewer employed youth in 2012 than in 2007, despite growth in the global youth population of more than 12 million. This resulted in a decline in the global youth labour force participation rate of about 2 percentage points between 2007 and 2012. While part of this decline was due to increased time spent in education ( a favourable trend in many developing countries with low historical attainment levels for secondary and tertiary education), the decline in youth participation in the developed economies and European Union region is more plausibly explained through discouragement and rising numbers of youth neither in education, employment or training. In effect, a large number of youth in some countries risk going from being unemployed or out of the labour market to becoming unemployable (Heckman, La Lander and Smith, 1999; ILO 2013).
In a bid to encourage sustainable growth that is associated with opening up opportunities provided by development process, this study seeks to evaluate the Nigerian labour force based on quality rather than quantity of its youth entrepreneurship and employability programmes and thus improve their capabilities from the local market perspective Adopting this approach is imperative for it will help government and other stakeholders to develop a new expenditure framework, evaluate and monitor funds appropriated to various youth development programmes so as to attain a reasonable level in youth unemployment reduction.
2. Previous Research
Some researchers have attributed the unemployment problem has being attributable to the globalization process. They opine that shifting production and outsourcing to other countries have generated a high rate of structural unemployment in some economies like United States which resulted in increase in unemployment rate. Besides, the appreciation in dollar during the 1980s made American exports expensive in the world market, which reduced the export level, causing unemployment to increase in the exporting industries. But in recent years, the opposite is the case; the dollar has been depreciating against other currencies, which have made the American exports cheaper globally. Hence, exports have increased and imports have become very expensive, which have contributed to increasing the level of employment. Over the last two decades, it can be contended generally that the transportation cost has been declining (before the increases in oil prices) and wages and taxes had been increasing before the Great Recession of 2007. These factors provided incentives for corporations to outsource their production tasks to other producers located in foreign countries. It is also true that these forces pushed corporations to relocate to other countries where wages and taxes are low relative to the United States of America. It follows that many American workers lost their jobs due to these corporate decisions. For example, due to outsourcing and relocation of firms a large number of workers lost their jobs from the states of Michigan and Ohio. Large corporations have also tried to increase their efficiencies in order to make more profits in the long run by reducing the cost of production. Thus, they have been involved in downsizing their operations. This process of downsizing is actually aiming at cutting employment of labour. Consequently, structural unemployment rose due to this process. Globalization has also played a significant role in the development process of important countries such as India, China, and Brazil, to mention a few. These countries now compete favourably with the United States and are able to control a significant share of the global market. This has affected the American exports and employment negatively. But the process of globalization raises national incomes in many countries, a prosperity that will increase imports from the United States of America. Globalization also creates a competitive environment, forcing many corporations to be innovative. Hence, productivity and demand for labor will increase in the United States of America, which will reduce the rate of unemployment.
In Nigeria, various review of unemployment rate has been undertaken by researchers. For instance, Oloruntoba (2011) examined the determinants and development implication of unemployment in Nigeria and found that real GDP and investment level were not statistically significant and thus do not affect unemployment rate. In similar vein, Ajufo (2013) examine the issue of youth unemployment and looked at potential interventions such as effective career guidance, technical and vocational education as well as entrepreneurship education. On the premise of his findings, he suggested that to promote youth entrepreneurship, government should, among other things; concentrate on those activities where youth are known to have comparative advantage. Also school-to-work transition skills should be introduced into the curricula of senior secondary schools and tertiary institutions in the nation, specifically, for the final year students who are about to enter into the competitive labour market. The training should create avenues for providing experience with a view to promoting and developing desirable work ethics and culture for national development. Asaju, Arome and Anyio ((2014) examined the factors responsible for high unemployment in Nigeria and its social, economic and political implications. Findings revealed that corruption in both public and private and at the individual levels, industrial decay and neglect of the agricultural sector were among many other factors responsible for the scourge. It was also revealed that widespread poverty, youth restiveness, high rate of social vices and criminal activities are prevalent because of joblessness.
With regard to entrepreneurship and SMEs in Nigeria, Basil (2005) investigated the performance of the Small and Medium Enterprises sub-sector of the Nigerian economy. 300 SMEs which were randomly selected from a cross section of a population of 1,500 SMEs spread among all the states of Nigeria including Abuja. The result shows that SMEs have performed below expectation due to a combination of problems which ranges from attitude and habits of SMEs themselves through environmental related factors, instability of governments and frequent government policy changes and somersaults. Evaluating the impact of a Nigerian financial intervention scheme on the growth of Nigerian SMEs, Oyefuga ,Siyanbola, Afolabi, Dada and Egbetokun (2008), found that the most significant reasons why SMEs could not access funds from the scheme is due to uncoordinated business plans and poor packing of projects. Although some of the SMEs found the scheme to have been helpful, most of them were not aware of its activities and potentials. This had resulted in the accumulation of funds, which could otherwise have been gainfully utilized by the existing and potential entrepreneurs.
It is an effort to make loan facilities available to rural investors; Microfinance Bank was created by the Central Bank of Nigeria. To this end, Babajide (2012) investigated the effects of microfinance on micro and small business growth in Nigeria, With the main objective of examining the effects of different loan administration practices (in terms of loan size and tenor) on small business growth criteria and to examine the ability, given its loan-size and rates of interest charged towards transforming micro-businesses to formal small scale enterprises. He employed panel data and multiple regression analysis to analyze a survey of 502 randomly selected enterprises financed by microfinance banks in Nigeria. The findings of the study suggest strong evidence that access to microfinance has not enhanced growth of micro and small enterprises in Nigeria. However, other firm level characteristics such as business size and business location were found to have positive effect on enterprise growth.
In another study, Sokoto and Abdullahi (2013) examined how strengthening the Small and Medium Enterprises (SMEs) contributes to poverty reduction in North Western Nigeria using both primary and secondary data collected through questionnaire and Nigerian Stock Exchange (NSE) and National Bureau of Statistics (NBS) respectively from a sample of 400 SMEs in Sokoto and Zamfara states. Both intra and inter-sectorial comparisons of the two sets of enterprises were made with regards to their employment generation and utilization of indigenous technology. The major finding of the study is that large enterprises contribute more in the area of employment provision than the SMEs, thus contradicting the assumption that small and medium enterprises do contribute to employment generation and use more indigenous technology than large corporations, The study concludes that employment generation capacities of any organization is vital in reducing the incidence of poverty among economic agents.
Although, Muhammed (2011) opined that government at all levels should provide accurate information about the job market in order for workers to be able to seize this opportunity for finding employment. Thus, education should be productive in order to develop very productive workers and innovative entrepreneurs develop new skills. In addition, governments can directly employ workers, and the Federal government can provide financial assistance to State Governments to achieve this task. State Governments can attract foreign direct investments, which will be able to create many jobs for the Nigerian workers. In this context, it must be stated that governments have to cut taxes on domestically investing firms, because this action will provide better profitability for these firms. Castells-Quintana and Royuela (2012) are of the view that high and persistent levels of unemployment and increasing inequality are more than a consequence of scarcer opportunities related to the crisis; they can also be negative determinants for subsequent long-run economic growth. In their study, they assess unemployment and income inequality, and interactions between both, as possible determinants of long-run growth by using cross-sectional international data. The result suggest that while initial high unemployment rates do not seem to be statistically significant to explain long-run growth, they do have a negative and significant effect when interacting with increases in inequality. Also, when differentiation is carried out based on levels of urbanization, increasing inequality harms growth in countries with high levels of urbanization, as well as in countries with low levels of urbanization in which there is high and persistent unemployment.
Since 2009, little progress has been made in reducing youth unemployment in the advanced economies. The youth unemployment rate in 2012 is estimated at 18.1 percent, which is the same rate as in 2010 and represents the highest level in advanced economies in the past two decades. On current projections, the youth unemployment rate in the advanced economies will not drop below 17 per cent before 2016. Between 2008 and 2012, the number of unemployed young people increased by more than two million, which is the equivalent of almost 25 per cent growth. By the second quarter of 2012, the youth unemployment rate exceeded 15 per cent in two thirds of advanced economies, and in Greece and Spain youth unemployed accounted for more than half of the economically active youth population. According to Organization for Economic Co-operation and Development (OECD) data, the youth unemployment rate in 2012 recorded the highest quarterly rate in the past ten years in at least ten countries, and the same is true for the Euro area as a whole. However, there is also variation in country experiences. Youth unemployment rate was below 10 per cent in six countries in the Developed Economies and European Union region in the second quarter of 2012 (Austria, Germany, Japan, the Netherlands, Norway and Switzerland), and in three countries youth unemployment rate was below the level in the same quarter of 2008 (Germany, Israel and Switzerland).
The massive increase in youth unemployment is reflected in the duration of unemployment. In the OECD countries, on the average, more than one-third of unemployed youth had been unemployed for at least six months in 2011, up from around one-quarter in 2008. In ten countries at least half of the unemployed youth have been looking for a job for more than six months. The share of the unemployed youth who had been unemployed for at least six months increased from the second quarter in 2008 to the second quarter in 2012 in 19 countries, while it decreased in 12 countries. High and increasing unemployment rates coupled with longer periods of job search have resulted in many young people giving up the search altogether and becoming discouraged. “Adjustment” of the unemployment rate to include discouraged workers would add an estimated 3.1 percentage points to the youth unemployment rate in the advanced economies in 2012, raising the rate to 21.2 per cent. The adjusted number of unemployed/discouraged youth rose to 13.0 million, compared with 10.7 million youth who were actually unemployed in 2012, ILO (2013).
Entrepreneurship including Small and Medium Enterprises (SMEs) with respect to the concept of starting up a business can be analyzed even from factors that affect the idea formulation of individuals. Wang (2014) tested for the correlation between entrepreneurial intention and possible influential factors. Data on entrepreneurial intention, attractiveness of entrepreneurship, entrepreneurial environment, employment environment, gender, major, and personality characteristics were collected from the students of Xi’an Jiaotong-Liverpool University. Results indicated that gender, personality characteristics, and entrepreneurial environment have relatively significant correlation with entrepreneurial intention. No significant correlation between entrepreneurial intention and major, and employment environment was identified through the outcomes of this research. Three suggestions were made based on the result which are that the local government should invest more in the fundamental facilities such as the business incubators in order to improve the local entrepreneurial environment which could increase the individuals’ entrepreneurial intention; The universities or colleges could design different entrepreneurship modules for different kinds of students; universities should be building entrepreneurial culture and environment for the students to complement the universities which also have been regarded as entrepreneurial universities.
Ihua (2009) comparatively examined the individual impact of ten “key factors” influencing business failures within the small and medium-sized enterprises (SMEs) sector between the United Kingdom (UK) and Nigeria. A survey instrument testing ten key variables was developed and data was generated by sampling key informants. Forty five questionnaires each were administered and two interviews each were conducted between the UK and Nigeria. The results showed that while poor management was found to be the most crucial factor influencing the SMEs failure in the UK, poor economic conditions and infrastructural inadequacy were found to be most crucial factors in Nigeria. Relevant statistical analyses undertaken led to the rejection of the two hypotheses of the study. This study adopted a small survey sample of key informants due to the short time frame for conducting the study; hence limiting the ability of the results to be generalized. The results of this study reveal that internal factors are responsible for SMEs failures in the UK. Hence more effort needs to be focused in the area of management development for SMEs. External factors were found to be the key factor influencing SMEs failure in Nigeria; hence a lot needs to be done in Nigeria in terms of improving the economic conditions and dilapidated state of infrastructural and social support.
3.Research Method
This study adopts the Positive Youth Development (PYD) model to evaluate youth employability and entrepreneurship with local labour market in Nigeria. It is a technique developed from human capital development model to address and manage youth dynamics issues emanating daily in different parts of the world. This approach does not necessarily have a structured method of enhancing the quality of life of youths. Hence, its adoption by various countries or geographical locations is based on the major issues plaguing such locations at various points in time. In other words, this model formulation varies and it is based on trial and error as programmes are being continuously formulated and implemented based on prevailing approaches in another or same environment or location. According to Schulman and Davies (2007),PYD programmes are universally applicable: at their core, they promote all young people’s progression. Rather than focus on what keeps some young people from meeting their developmental milestones, PYD programmes focus on what all young people need in order to reach their full potential. The model posits that youth development is a continuous process and therefore have to be continuously reviewed as some approaches may become ineffective over time either due to change in issues affecting youths in an area or change in the population structure in that location. Also, there is major participation of youths and other stakeholders like parents, in various programmes implemented.
According to Schulman and Davies (2007), the broad theory of youth development has not been consistently translated into practice. They are of the view that PYD programmes are not limited to one sector. Youth development informs a wide range of programmes across school and community settings. PYD has a strong bias towards primary and secondary prevention interventions. Whilst many programmes are either universal, or targeted at deprived populations or populations at risk of encountering problems, youth development models can influence the design of long-term treatment and intervention programmes. The PYD programme is distinct from other youth programmes because it considers the: ‘Why’ of youth development (the scientific and philosophical framing of a programme); the ‘What’ of youth development (the developmental focus of programme components); the ‘Where’ of youth development (the different domains in which developmental activities take place) and the ‘How’ of youth development (the specific operational features integral to positive youth development programmes).
