THE ATIKU ABUBAKAR POLICY DOCUMENT. MAKING GOOD THINGS HAPPEN Continued! SECTION I- EMPLOYMENT GENERATION & WEALTH CREATION 2.1 JOB CREATION 2.1 JOB CREATION 2.1(a) The Issues From surveys conducted nationwide, the single most important issue for most Nigerians today is job creation. In spite of the economic growth recorded in recent years, the economy is simply not growing quickly enough to absorb the numbers joining the labour market each year. Furthermore, economic growth recorded in the last five (5) years has had little effect in creating sustainable jobs, thereby leading to a reduction of public support for much needed economic reforms. The problem is made more acute by the fact that a significant number of seemingly employed individuals are under-employed and, therefore, not operating to their maximum potential. Previous government job creation efforts have proceeded by actively seeking to create specific categories of jobs for the unemployed. In recent years, government has realised the futility of this approach, and instead, efforts are now being placed on providing a conducive environment for the creation of jobs. That should be government’s primary role in job creation initiatives. Government must, directly or through PPPs and/or the 3G partnership, play an active role in providing an enabling environment for: 1. The development of entrepreneurs through high impact job creation initiatives, who will in turn employ others, 2. Encouraging infrastructure development that is inherently labour intensive (especially in conjunction with the private sector); 3. Resuscitation of industrial activity as a fall out of the improved infrastructure e.g. power 4. Accelerating the growth/opening up other service sectors that are labour intensive a. Law and order b. Teaching c. Health services d. Sports and entertainment 2.1(b) The Initiatives 2.1(b) (i) High Impact job creation In considering job creation, government should aim to limit the entry into lost causes (i.e., those without skills and who do not have any incentive to seek jobs because there are alternative and more beneficial paybacks). High impact job creation is to be anchored on encouraging entrepreneurs as well as job opportunities through national priority projects in labour intensive infrastructure development (road and rail track development; development of a gas pipeline network; affordable housing etc). 1st 90 days • Set up a manpower agency to act as a job agency where jobseekers meet job providers. • Streamline the activities of the various job creation agencies to ensue objectives are harmonised and efforts are better channelled to reflect government’s priorities; Short Term • Provide incentives to the jobless by changing the incentive structure o increasing salaries of teachers and health workers, o Provide vocational/skills acquisition training to a minimum of 200,000 potential entrepreneurs • Assisting the growth of the entertainment industry especially Nollywood by o Ensuring access to bank financing o Reviewing the existing copyright laws to protect budding Nigerian artistes and culture Medium-Term (within 4 years) • Develop skilled workers who will add value to the economy. These workers shall be empowered: o Provide vocational training and skill acquisition programmes to 1,000,000 people to enable potential entrepreneurs acquire accounting, management training expertise etc; o Strengthen SMEDAN (both capacity and quality) to: • provide business support/advisory services etc • champion policies for SME growth; o Actively provide support to and work with non-governmental organisations with similar objectives. • Develop/enhance existing skill centres to support the areas the government is emphasising (construction; teaching; health workers, information, communications and technology). • Facilitate development of private sector micro-credit structures/windows to support aspiring businesspeople: o complement business advisory support work of SMEDAN and other relevant NGOs o Provide entrepreneurs with better access to credit by attracting a minimum of $250 million of private sector funding (excluding SMIEIS) for Nigerian small businesses • Develop sports and sporting facilities (gyms, leisure centres) under a 3G partnership as well as via PPPs o Sports and leisure activities have been neglected despite the fact that they offer job opportunities and significant social mobility potential; o Establish a network of community and leisure centres in at least every local government area in the country. • Actively promote Nollywood to make it the 3rd largest film industry in the world by: o encouraging partnerships between banks and Nollywood to deepen access to bank funding, o assisting via the Nigerian Film Corporation and private sector initiatives, enhancements in film production capabilities and technology, o An initiative to access new markets in Africa, the diaspora, the Black world, and Asia; o improved distribution networks nationwide and outside Nigeria, and generally facilitate their integration into the formal economy o Passage of a revised copyrights Act o Strict enforcement of the copyright laws • The largest creator of jobs worldwide is law and order. Jobs in the law and order sector to be developed by: o Outsourcing basic security services in government offices o Encouraging private sector security firms to expand their scope to effectively complement the Police. • Utilise agriculture as a means for creating both rural and urban jobs o As a social responsibility. While this may not meet a conventional cost benefit test, it will open up opportunities and provide the fulcrum to enable people farm even on a subsistence basis. o These efforts shall be complemented with provision of micro credit; o Better access to inputs and farm extension services; and o Reorganisation, strengthening and recapitalisation of the Nigerian Agriculture, Cooperative and Rural Development Bank to facilitate loans to smaller farmers. • Create linkages between infrastructure development and job creation o Specific initiatives will include using as much local input as possible in developing new rail tracks (i.e., integrating Ajaokuta and Delta Steel into the new infrastructure programme) These shall be primarily private sector initiatives but with government acting as an enabler. 2.2 Economic Transformation Job creation must be complemented with economic transformation. Economic transformation in this context refers to changes with the capacity to have a deep and meaningful impact on the Nigerian economy. Some of the economic transformation initiatives are outlined within the Infrastructure section (steady electricity supply and development of a modern road and rail network, development of a gas pipeline network). Others include restructuring the Federal Government and implementation of property reforms. In achieving transformation, attention needs to be paid to comparative advantage. In certain circumstances, comparative advantage can be created, and we need not therefore assume it a natural endowment. The concept of comparative advantage should be linked with SMEs in order to develop value adding products/activities where Nigeria can develop a comparative advantage over a period. Government can create the enabling environment for this to be achieved. 2.2 (a) Land Ownership and Property Rights Reform The big enabler of any people is the land tenure system. In a functional market economy such as we aspire to have, individuals must have clearly-defined and inalienable property rights. The absence of effective property rights is partly responsible for the inability of large numbers of Nigerians to take advantage of the economic reform and formal credit/banking system. Macroeconomic policies can liberalise sectors and open up opportunities but unless economic agents are able to mobilise and take advantage of the opportunities, they will not feel the impact of the reforms. Many Nigerians own land that is untitled, and therefore of no use whatsoever in facilitating access to capital or freeing up tied capital. Instead, land is typically held through informal arrangements that have local relevance but cannot be used in the formal economy. Macro-economic reforms, desirable as they are, cannot achieve their intended objectives unless a serious and concerted effort is made to vest formal title in landowners. Formal title will integrate the poor and the marginalised into the formal economy and enable them leverage their assets to further their well-being by seeking to achieve their individual or community pursuits. Nigeria therefore needs to make an outright commitment to title all land. This will immediately transform a fixed and illiquid asset into a valuable asset capable of generating capital for investment with consequent wealth creation. Allied to the property reforms are availability of affordable housing and mortgage reforms. Nigeria faces a severe housing deficit. Estimates by the Federal Mortgage Bank indicate a deficit of at least 12 million housing units. While the deficit cannot be addressed within the lifetime of an administration, a concerted effort at reducing is however clearly required. This will entail creating linkages between provision of land to property developers, increased availability of housing finance, reduction in property transaction costs and job creation across several sectors ancillary to provision of additional housing stock. Macroeconomic stability is critical in mobilising housing finance (as a result of its impact in ensuring a low rate of inflation, affordable interest rates and in increasing household and corporate savings). The pension reforms will provide a long term funding market, which subject to macro economic stability will facilitate the development of the mortgage market. Coherent action is therefore required to increase home ownership and broaden the potential outlets for pension fund assets. To be continued tomorrow. Keep reading.
Posted on: Thu, 12 Sep 2013 07:32:24 +0000
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