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Where are the Jobs? by Akin Oyebode



CBN Gov Godiwn Emefiele
The Nigerian Bureau of Statistics just published its unemployment report for Q1-Q3 2017 and as expected, it was a bloodbath. Not sure if anyone was surprised, for an economy coming out of its first recession in 25 years, and one that lasted for over 12 months, we were clearly going to struggle creating jobs. Anyone who wants to read the full report can download it here.
The numbers: 

Unemployment rose from 12.1% in Q1 2016 to 18.8% in Q3 2017. Ouch!

Underemployment, also not wanting to be left out of the party, rose from 19.1% in Q1 2016 to 21.2% in Q3 2017.

Now, what does this mean? Let’s look at the first set of numbers. You can see underemployment is not really the problem. The movement here only worsened by about 2%; the real problem is the almost 7% movement in unemployment.

The first problem the data tells us is that Nigerians were having too much unprotected sex almost two decades ago. How do we know this? The working population grew from 101.7 million to 111.4 million people between Q4 2014 and Q3 2017. That’s 9 million people coming into the working population in roughly 3 years. When you add another 4million people who were not previously looking for work that are now searching for jobs within the same period, that’s a total of 13 million new people, who have entered the labour force since 2014.

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Just to be clear, 13 million people. That is the population of Rwanda, Sweden or Cuba. There lies our first problem. It means even if APC met its target of 3 million jobs per year, unemployment would still have worsened. This one sounds simple to solve, promote FAMILY PLANNING. Or not.

The NBS will release its Employment Report later this month, which will provide more insight on the QUALITY of jobs being created, but the unemployment report already gave us a clue. Between Q4 2014 and Q3 2017, we created 5 million more time-related (some call this part-time) jobs. That’s a good thing, and I will add some propaganda here, that it shows the effect of the Government’s focus on agriculture, even though 5 million temporary jobs in 3 years suggests those hundreds of billion could have been better spent. But the real worry is how we performed with full time jobs. Here, we bled, wait for it…4.1 million jobs. Ouch!

The rest is simple arithmetics. Your workforce grew by 13 million people, but you only managed to create a net of 1 million new jobs, which means 12 million more people are unemployed. If you add migration and other economic factors into the mix, you’ll find that number rising to 16 million people. Now remember those people in time related jobs? Let’s assume they all prefer full time jobs, and throw all 18 million of them in the mix, that gives us a whooping 34 million people.

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Just to be clear, 34 million out of a labour force population of 85 million are either unemployed or underemployed. That’s 40%. Not 4%, 40%.

How do we solve this massive problem?

Capital Formation

This is all you need to know:

That equation shows output (which some smart people equate to GDP) is a function of capital, labour and time. If you have nothing better to do at Christmas, you can read this piece on the role of capital formation in economic growth, though I’ll advise you should dig into some roast turkey and wine instead, but read the portion below.

Moreover, capital and technical progress combined account directly for more than 95 percent of the economic growth of the industrialized countries except the United States. In the United States, where labor grew much more rapidly than in the other countries during this period, capital formation and technical progress still account directly for approximately 75 percent of economic growth.

Why is this important in Nigeria? The awful policies of the Central Bank in artificially controlling the exchange till oil prices started rising (Thank God!) did incredible damage to Nigeria’s economy. Egypt (GDP growth forecast: 4.5%) and Argentina (GDP growth forecast: 2.5%) have shown the effect of taking the right policy decisions compared to Nigeria (GDP growth forecast: 0.8%). If investors cannot trust your exchange rate, then you cannot expect foreign direct investment. Anyway, I don’t want to bore you, some smart people have already done a lot work showing what the Government needs to do, for capital formation to improve: cut recurrent expenditure to focus on capital projects, drive export discipline and incentivize increased national savings (Nigeria’s Savings/GDP ratio is 15.6% vs the global average of 25%) . You can read their paper here. Oh, as long as we keep the ancient Land Use Act where only a few states actually issue proper title documents, our biggest chunk of domestic capital will remain as dead as Egyptian mummies. Perhaps, Nigeria is a ripe destination for using blockchain technology to unlock the dead capital in untitled land, and dry bones shall rise again!

Export Discipline

This is something many policy makers in Nigeria don’t like to admit — self sufficiency cannot deliver the jobs needed to lift millions out of poverty. Nigeria’s GDP per capita of $2,200 is 128th in the world and only screams one thing — NIGERIA IS A POOR COUNTRY. What can we learn from this? Our domestic consumption power will not drive the growth needed to create better jobs for over 30 million people. To achieve this goal, we need to look outside Nigeria for buyers of Nigerian goods and services.

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If you ever need to understand why export discipline is a critical driver of growth, please read Joe Studwell’s How Asia Works. If we execute this as well as Korea, and let private enterprises run the businesses, then the sky’s the limit in the words of the Notorious BIG. However, if we do it like Malaysia and insist on public enterprises as implementing agents, then maybe my son will be writing a similar post in 30 years.

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The difference between General Park in Korea and our leaders in Nigeria is very easy to spot. Chung Ju Yung, the Hyundai founder, was the king of crony capitalism before Park’s coup; he had a made fortune without exporting anything, largely from construction using domestic business concessions (sounds familiar?). Now, when Park became Korea’s leader, he didn’t throw Chung Ju Yung in jail, instead they had lunch every Thursday, and Chung became a major exporter of first his construction business, then semi-conductors and cars. The next two paragraphs will explain how those Hyundai cars ‘flooded’ the Nigerian market.

The quote below is a lesson for Nigerian Government. You should send it to every Government official you know 🙂

Government needs to take a realistic view of entrepreneurs. Rather than plead with them to make some voluntary move to a higher moral plane, it is better to acknowledge the existence of the entrepreneur’s animal spirit, and use his desire to make as much money as possible to control him.


Now, back to Park and Chung. Guess how Chung moved from crony capitalist to a major exporter? The answer lies in a place called Seodaemun. It was a small prison where Park locked anyone who didn’t adhere to his development plans for Korea. And since Chung didn’t want to be separated from his harem of mistresses, he quickly pivoted his business from being a lazy beneficiary of Government concessions to a solid enterprise that went on to grow market share in many international markets like Nigeria.

You can read an excerpt from How Asia Works here, but I still recommend you buy and read the entire book.

Special Economic Zones

Type “miracle of Shenzhen” in a search engine and click on the results. This is what happens when a Government is serious about transforming its economy. Shenzhen was a rural fishing village with a population of 30,000 in the 1979 when Deng Xiaoping (let’s take a moment to recognize the maestro) created China’s first special economic zone. Today, Shenzhen’s has a population of over 10 million people and a GDP of $280 billion, 70% of Nigeria’s GDP.

What makes SEZs work:

Focus — The best ones are focused on export markets, but SEZs are like a laboratory that can be used to test different models, so the best ones are scaled while the dud ones are quickly killed.

Location — They could be sited anywhere, but try avoiding landlocked areas.


Infrastructure — Tax breaks are great, but the real work is providing proper infrastructure that drives costs down. In Nigeria, those will be uninterrupted power, cheap broadband access and transport (which is why proximity to ports is a critical factor in selection locations).

Results Linked Incentives — Being allowed to operate from the SEZ can be linked to job creation, which can be verified through payroll and tax filings. If incentives are not linked to the expected outcome, the impact of SEZs will be limited, as our free trade zones in Nigeria have shown.

For anyone willing to read a detailed publication on SEZs, please click here.

Policy Coordination

There are certain policies that show we are not ready to put people in jobs, like the discussion on a minimum wage increase. Stay with me. This is an extract from the National Minimum Wage Act, stating those exempted from compliance with the agreed minimum wage at any time.

An establishment in which less than 50 workers are employed; an establishment in which workers are employed on a part time basis (those working for less than 40 hours per week); an establishment at which workers are paid on commission or on piece rate basis; workers in seasonal employment (as agriculture); and seamen or crew members of an aircraft.

Now let’s compare our law with what my homeboy, Thomas Sowell famously said:

Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force.

If you are a large employer of labour, what will you rather do, employ more than full time employees and risk compliance with a wage bill increase you didn’t determine, or just hire fewer, keep your employees working part time, and keep your wage bill within acceptable limits.

That’s one example of how policies contradict our expected outcomes, just to make the point.


Now to the elephant in the room. The Nigerian educational system is not designed to develop a skilled workforce, either for employment or entrepreneurship.

I have spent the last few months working on a technical and vocational training program, and two things struck me.

  1. We have limited training capacity across the country, both in terms of facilities and trainers.
  2. In developing the curriculum, there has been limited interaction between the educational bodies and employers.

Now that’s just vocational training. But even with our secondary and tertiary institutions, we are not offering any job readiness or entrepreneurship training that ensures we deliver competent employees and a pool of successful entrepreneurs. This is purely anecdotal, but it seems Covenant University is doing something (deliberately or not) that is creating a decent pipeline of talent. Maybe there’s something there we can develop as a nation. But the one thing we certainly need the Minister of Education to review is the national curriculum at all levels. At the end of the day, the economy can only achieve inclusive growth if a competent workforce is developed.

Finally, at various levels of leadership, Nigeria must be ready to make money moves without having it all figured out. As Deng Xiapoing said, “cross the river by feeling the stones.”

This article is written by Akin Oyebode and first appeared on his Medium Page. It is published with permission by Nairametrics. 

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform. To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

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GSM firms set to rake in billions from data guzzling #ENDSARS Protesters

The #ENDSARS protests and its aftermath has lingered throughout the month of October leading to a massive guzzling of data.



GSM firms set to rake in billions from data guzzling #ENDSARS Protesters

The #EndSARS protest is expected to be a massive boost for the revenues of GSM/telcos in Nigeria. The protests and its aftermath has lingered throughout the month of October leading to a massive guzzling of data by protesters and those relying on the internet to follow the protest online.

Nigerian youth started a protest to end police brutality three weeks ago calling for the end of the notoriously brutal Special Anti-Robbery Squad (SARS) of the Nigerian Police Force. The protest which began on Social Media ended up in the streets of major cities across the country catching the attention of the federal and state governments, eventually forcing them into accepting the demands of the protesters.

READ: Total Nigeria Plc records 344% rise in PAT for Q3 2020

Unfortunately, the protest was taken over by hoodlums as they went on a rampage burning police stations, public and private property as well as going on a looting spree. Nigerian soldiers were also accused of shooting at peaceful protesters at the Lekki Toll. Despite the sad turn of events, social media played a major role in garnering support for the demands of the youth as thousands of images, videos and hashtags were shared by millions of users locally and globally. 

Unlike previous protests in Nigeria, the #EndSARS protest kept its momentum going with the help of social media applications such as Twitter, Instagram, Facebook, and most notably WhatsApp. Images of protesters, videos, hashtags were shared by millions of Nigerians using these platforms, pushing the boundaries of what is real or fake. As people shared videos and images in support of the protest, so did they guzzle up internet data.

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READ: #EndSARS Protest: FG denies monitoring calls and social media accounts

According to one report, “in the first 14 days, #EndSARS and its related hashtags saw 18 times more mentions than the August 4 Beirut explosion over the same period, with 173 billion impressions (and climbing) for the campaign dwarfing the 29.3 billion impressions for the Beirut blast” depicting just how huge the impact of social media was to the fueling of the protests. 

Who gains financially?

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Whilst the protesters can boast of a considerable measure of success throughout the protest, internet service providers, particularly telcos stand to gain more financially than anyone else. According to data from the NCC, Nigeria has about 149 million internet subscribers and is one of the fastest-growing in the world. GSM Companies have posted some of their best profits in 2020 despite the COVID-19 pandemic that has hampered economic activities globally and including Nigeria.

READ: NCC explains reasons for revising complaints categories, resolution timelines

Airtel Africa reported during the week that data revenue from its Nigerian operations rose 38% to $257 million (N97.6 billion) for the period between April and September 2020. This translates to a revenue of N16.2  billion monthly. MTN, Nigeria’s biggest telco reported revenues from Data of N241.6 billion up 57% in the 9 months ending September 2020. MTN rakes in about N26.8 billion monthly in data revenues alone. 

READ: MTN Nigeria posts N975.76 billion revenue for Q3 2020

These figures are largely backed by increased reliance on internet data to drive work from home activities during the lockdown. Airtel CEO Raghunath Mandava confirmed this in his statement following the results. “In these unprecedented times, the telecoms industry has emerged as a key and essential service for these economies, allowing customers to work remotely, reduce their travels, keep them connected and allow access to affordable entertainment.”

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READ: NIPOST’s new charges could have ruined the e-commerce/logistics industry

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On the money: GSM Giants, as well as other Internet Service Providers, are poised to reap even more from the increased reliance on data to drive social activism and awareness. As millions of consumers share more videos and images, the need to download and save on their devices or in the cloud will continue to line up billions more in cash in the bank for service providers. 

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Guinness Nigeria Plc jostles to improve from its insipid 2020 financial year

In the 2021 financial year, the task before the company is to drive its strategic objectives to bring the company back to profitability.



Baker Magunda, Guinness Nigeria Plc, Baileys, Why Guinness is a stock to pick - RenCap 

Guinness Nigeria Plc has started its 2021 financial year with a loss, just like the company did in 2020. However, this time, the value of the loss adds up to N841 million for the opening quarter. In 2020, it was N370 million, which set the tone for what eventually degenerated into a truly horrible and uninspiring financial year. A year that saw loss position in the aggregate 12 months period peak at N12.6billion.

READ: Brewery sector: A quarter to forget

READ: Guinness’ parent company expects alcohol sales to improve as restaurants and bars gradually reopen

Apparently, all that could possibly go wrong with Guinness, did go wrong. From what in retrospect, turned out to be an over-ambitious outlook at the start of the year, to the effects of not giving immense attention to controllable costs, rise in inflation with its resultant pressure in decreased consumer spending, and the crippling effects of the unprecedented COVID-19 pandemic; no company could have asked for worse.

However, the horrendous performance was not peculiar to Guinness Nigeria alone. The results from its competitors, such as the International Breweries Plc, and Nigerian Breweries Plc, amid appalling industry figures recorded, proved that 2020 has been a tumultuous year indeed for all companies operating in the brewery manufacturing sector.

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READ: No trophy for International Breweries after bland Q2 results

The analysis of FY 2020

How poor was the 2020 FY performance of Guinness Nigeria and what can be inferred from its Q1 2021 reports? For a company in the habit of declaring dividends especially after the N5.5billion profit in 2019, how did the company move from that profit margin to a loss of N12.6billion just 12months after?

  • Profit declined by 129.1% from N5.5billion Profit after Tax in 2019 to N12.6billion Loss after Tax in 2020. This Steep decline was evident in all arrears from top-line to bottom.
  • Gross profit down by 16.9% to N33.33billion in 2020 as against N40.13billion reported in 2019
  • Revenue plunged 21% to N104.41billion in 2020, from N131.5billion generated in 2019.
  • Cost of sales did show some improvement, moving from the N91.4billion expended in 2019 to N71.1billion in 2020 – a 22% decrease.
  • Administrative cost continued the rising trajectory to N14.3billion in 2020 from N9.9billion in 2019.
  • Finance cost rose to N4.5billion from N2.6billion in 2019, while finance income declined from N750.9million to N301million in 2020.

READ: PZ incurs N1 billion in exchange rate loss 

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Speaking on 2020 results, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc said,

“The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs, and dine-in restaurants), which represents the major part of the consumption occasion for our products and bans on celebratory occasions, impacted sales.

“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”

READ: R.T. Briscoe declares N618.9 million loss in H1 2020, as sales of vehicles fall 

Magunda further explained that, “Distribution was impacted by the ban of inter-state, and in some cases intra-state travel. Although, Management worked diligently with regulatory authorities to minimize the impact, this hampered our distributors’ ability to restock and have our brands available for purchase.”

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The analysis of Q1 2021

In the 2021 financial year, the task before the company is to drive its strategic objectives to bring the company back to profitability. The Chairman, Mr Babatunde Abayomi Savage, recognizes that this would be no stroll in the park, as he affirmed that despite predictions that the coming year will be challenging globally due to the new normal, “we believe we have experienced our full share of the impact and are now geared to go back to profitability.”

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READ: MTN, Airtel, Glo, other Telcos’ operating costs drop to N1.756 trillion in 2019

The opening quarter for 2021 (July-September) saw improvements in sales volumes on the back of eased restrictions from the COVID-19 necessitated lockdown.

  • Revenue posted is N30.02billion, 11.64% increase from the N26.89billion recorded in the corresponding period of 2020.
  • However, Cost of sales worsened by 21.1%, increasing from N18.9billion in Q1 2020 to N23.01billion in Q1 2021.
  • Marketing and distribution expenses, as well as administration expenses, showed marginal reduction, depicting management interest in controlling these variables.

READ: Q1’20: Okomu Oil’s result is more proof that essentials always win


Generally speaking, results for the opening quarter show signs of improvement, but the tax component was the primary factor responsible for masking the progress obtained in Q1 and eroding promising signs.

With the gradual re-opening of its previously closed company buildings in Benin City, and the shift in focus from the largely underwhelming lager segment to investing more in spirits, it will be interesting to see how this impacts volumes and revenue in subsequent quarters, despite the apparent economic conditions.

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Why Treasury Bills at 2% is actually a good thing

While the current prevailing rate of 2% might not be good news for investors, the low rates could be better for the Nigerian economy.



Implications of the new CBN stance on treasury bill sale to individuals, Nigerian Treasury Bills Market Witnessed Bullish Run on High Liquidity Last week

Latest stop rates from the Nigerian Treasury Bill auction held last week revealed some of the lowest rates for the nation’s T-Bills market in recent times. The 91-day bills had stop rates of 1% and the 182-day bills was also 1%. For the full year, the 364-day bills had an equally low rate of 2%. This is actually a good thing, as investors will become more creative, amongst other benefits.

If you were a frequent Treasury bills investor in the pre-COVID-19 era, you will most likely agree that one of the favorite markets for risk-averse investors, has taken a major dip over the past year. In 2019, the rate was as high as 13.029% – enough to give you a fighting chance with the equally high rate of inflation, as opposed to a savings account offering around 4%.

READ: FG liberalizes the Mining sector, grants 5 years tax concession to miners

However, while the current prevailing rate of 2% might not be good news for investors; theoretically, the low rates could be better for the Nigerian economy.

Double digits risk-free rates impede development

At the very basic level, having a risk-free investment that yields a guaranteed interest rate of about 15%, means that investors can put in their funds and fold their hands. Therefore, the option of making less risky investments become less alluring, as the lower rates can easily be mitigated by the relative safety of the principal (and return!) – something many businesses cannot boast of today.

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READ: NB Plc to raise additional N20 billion from its N100 billion Commercial Paper

Put simply, why should business owners risk employing people and possibly make losses, when they can invest in Treasury bills? After all, they too are exposed to the same inflation rate.

Unsurprisingly, this has contributed its own fair share in impeding the growth of the nation. Think about the percentage of the income of Nigerian financial institutions like banks that are from Treasury Bills. Conservatively, Nigerian PFA’s also have a significant percentage of their funds in Treasury bills – doing little and gaining little. It is always about the “cheapest to deliver.”

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No society can effectively spur development with only safe investments, as it comes with its own benefits like creating more jobs, building the stock market, and ultimately strengthening the industries in the country.

‘Model’ economies have really low risk-free interest rates

Some of the largest economies like the US, Japan, and Germany are known to have some of the lowest rates for risk-free assets. Whilst their rates cannot also be isolated from their equally low borrowing costs, the facts are crystal clear.

From a demand and supply standpoint, at 15%, it means that what the government is willing to pay to get capital is high. This makes it even more expensive for the government to fund infrastructural development.

READ: Safest, regulated Cryptocurrency, Arcoin backed by U.S. Treasury securities

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From a private sector standpoint, it is by taking risks that angel investors emerge, companies get seed funding, and further development is enhanced. Without this development, very few jobs will be created. Interestingly, most of the countries with the highest amount of venture capitalist investments have some of the lowest rates for risk-free assets.

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How investments should be done

There is an old investment strategy known as “Carry Trade.” The way it works is simple – you borrow at a low-interest rate, convert the borrowed amount into another currency, and invest in assets that provide higher rates of return in that currency. If Treasury Bills offer such high rates, “foreign investments” of this nature will not aid in the overall development of the economy. As long as the exchange rate is stable, investors get to make a killing with no value-added. This is just one of the many lapses of investing in high risk-free assets.

READ: Crypto: Popular Hedge Fund, Grayscale record best quarter ever

With the rates low, people can now invest the way investment should be done. Investors will now be forced to be creative. Consequently, this will birth even further infrastructural developments. For example, with this rate sustained, mortgage-backed securities and other forms of infrastructural funding can now take place.

Though, it is not without its own limitations, keeping the free money low is always a better option.

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