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Tuesday, 20 November 2012

Nigeria: Small business as key to youth employment By Emmanuel Onwubiko & Sylvia N. Okonkwo, esq



Those who know defined small businesses as companies that each employs less than 100 people. Researchers that work with http://www.evolveyourbiz.com/ are of the knowledgeable position that small businesses in the United States is key to job creation and indeed are credited for creating nearly fifty percent or more of the entire jobs in the United States economy. According to them, in the USA, small business employs over half of the nation's workforce.

Writing further on the importance of small business to the United States of America's economy, these group of thoroughbred researchers affirmed that though many people still think that new industrial giants are the most important factor in driving the economy, but the truth is that small businesses are actually the 'top dog'. "Where would half of the nation's actively working population find gainful employment opportunities without the formidable presence of the small businesses?"

Other researchers as well as the ones being referred above are of the opinion that entrepreneurs are the backbone of creativity and production because of the undeniable and scientifically verifiable fact that over 60% of all private sectors, non-farm jobs comes from small businesses and this salient fact informed the claim by experts that small businesses are critical to the United States economy. 

Back home in Nigeria, small scale or small medium enterprises are common means by which many are making a living in the country. Known as the most populous country in Africa with about 162.47 million people, Nigeria churns out graduates from tertiary institutions with little or no job waiting for them in the labour market. The National Bureau of Statistics said that over 50% of youth in Nigeria are jobless even as the World Bank by some estimates say 56% of Nigerian youth are jobless.

The MO IBRAHIM Foundation established by the Sudanese-born but United Kingdom-based investor- Dr. MO Ibrahim has in the 2012 report on the future of the African youth painted graphic and grim picture that the educational system in much of the African countries including Nigeria are not structured in such a model as to produce graduands who are comprehensively groomed with the twenty first century compliant skills to become creative and imaginative entrepreneurs.
 MO Ibrahim canvassed urgent measures in the area of providing good governance models that are workable so that quality education, health and opportunities for gainful employments are created for the youth to enable them compete with their counterparts around the globe. According to MO Ibrahim foundation, most youth in Africa including Nigeria with the highest population of black people in the World, are endangered by realities not unconnected to governance. This report revealed that the median age of African leaders is three times the median age of African population; Africa's current educational levels are lower than China's and India's; Secondary school achievement has regressed, as nearly nine million primary school age Children are out of school in Nigeria with only2/3 of students progressing from primary to secondary education.

MO Ibrahim Foundation also found out that job readiness is lacking in Nigeria, Kenya and Egypt while sectors that drive Gross Domestic Products growth do not create the most jobs. To cap up these pathetic statistics, MO Ibrahim Foundation uncovered that Africa has the lowest share of Engineering graduates in the World and that West and Central Africa lags behind literally when compared to East, Southern and Northern Africa. These factors grossly discourages the growth of small businesses among Nigerian youth who in their millions roam the streets of Nigeria searching for the elusive white collar jobs rather than being encouraged and empowered to become investors and small business operators.

 Even with the constraints of lack of finance to start up successful small business enterprises, many Nigerian youth still turn to the establishment of small and medium enterprise to sustain themselves. However, many who do not have formal education but are business minded are finding their way into the small scale or small and medium enterprise. The Government and other policy makers must find ways of educationally and financially empowering the millions of Nigerian youth who are already involved in small businesses and also encourage others to join this noble enterprise of running small businesses. 

A small scale or small or medium enterprises in Nigeria could range from manufacturing plastic sealed water, popularly known as “Pure water”, to leasing or renting an office space for wholesale, retail or social or consultancy services.    

Indeed, small and medium scale business/Enterprises (SMEs) anywhere in the world serve as a very potent force for job creation, poverty alleviation and overall healthy economic growth, and in the case of Nigeria, a thriving small business sector holds the key to ending the vicious cycle of violence, terrorism and youth restiveness.

The positive development in this regard is that the government departments, especially at the federal level, are neither relenting nor giving up their bid to revamp and invigorate the fortunes of SMEs as to enable them play the expected role in Nigeria’s economic growth and development but the commitment to make sure that the right persons benefit from the various schemes already in place in Nigeria is grossly lacking due to nepotism, greed, corruption and absence of good governance which are some of the salient constraints pointed out in the MO Ibrahim's report as being responsible for the backwardness of the Nigerian youth.

On the part of the Nigerian government, officials are of the view that different steps are being taken to address and redress these anomalies with a view to making the youth successful owners of small businesses. This, according to these Nigerian government officials, is evidenced by the government’s recent innovative job creation mechanisms as well as the mandate given to the Bank of Industry (BOI) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the facilitation of the Banker’s Committee's Institutionalization of the Small and Medium Industry, Equity Investment Scheme (SMIEIS). But these elitist measures have not trickled down to the millions of jobless Nigerian youth.

The enormity of the crisis of youth unemployment is however not being properly confronted with the necessary tools to reduce the scourge by encouraging the youth to become successful small scale business owners through the implementation of a variety of tax incentives and benefits including workable welfare schemes to enable unemployed youth meet up with payment of some important bills and also participate in the administration of small businesses as owners and consumers. Till date some foreigners are actively involved in the setting up and running of small businesses such as supermarket retail outlets, restaurants and bakeries. It is only in Nigeria that such things are encouraged when the local youth are roaming the streets jobless and government is looking the other way and allowing all manner of unqualified and unskilled persons from foreign jurisdictions to invade the Nigerian local markets. The Federal Ministries of Labour/productivity and Internal affairs must be reorganized to guide against abuses of expatriate quota that has become pervasive in Nigeria.

Still on the issue of small businesses, President Goodluck Jonathan recently introduced the YOUTH ENTERPRISE WITH INNOVATION IN NIGERIA [YOUWIN] which is a joint initiative of the Federal ministries of Finance; youth affairs, Women affairs and Communication Technology. The programme is to encourage and support ambitious and creative enterprising young men and women to develop and implement business ideas for job creation. Government officials say the initiative if properly implemented is envisaged to last for a three year period in which the second cycle would be completed in 2013[September] and that between 80,000 to 320,000 new jobs will be created at the cost of N10 billion.

If you ask us, we will simply see this modest effort by the current administration as 'mere tokenism' because only recently the entire country was inundated with information that few members of the criminal petroleum importation gangs with active patronage of some influential government officials cornered nearly N1 Trillion of tax payers money in fictitious fuel subsidy claims and that the Central Bank of Nigeria and the relevant government agencies including the Petroleum Products Pricing and Regulatory Agency [PPPRA], the federal ministry of Finance[before arrival of Dr. Mrs. Ngozi Okonjo Iweala as minister] and the office of the Accountant General of the Federation authorized these dubious payments to these cartel that collected huge payments for services and supplies of products that were never made. Why then is the Federal Government dedicating only N10 billion that can barely scratch the surface to tackle such a monumental national security threat posed by youth unemployment even when leakages and willful corruption by Government officials have depleted billions of tax payers fund through the collusion and active participation of rogue government officials who still hold influential positions in today's corridors of power? 

Government is hereby implored to broaden the scope of the youth enterprise with innovation in Nigeria project so as to create millions of small business owners among millions of unemployed Nigerian youth because the issue of joblessness among the youth is a serious national emergency that if not tackled by all stakeholders could spell doom for our nation in the nearest future. 

Federal Agencies such as the INDUSTRIAL TRAINING FUND [ITF], the National Directorate of Employment must be properly funded so that they can also expand the scope of some of their ongoing youth job creation initiatives. The ITF is one of the few agencies of the Federal Government that have carved a niche for themselves for actually implementing their mandates. The ITF is in the process of training thousands of unemployed Nigerian youth in skill and vocational sectors to become self employed. Such patriotic, creative, productive and good project needs to be given bigger budgets and realistically/pragmatically and transparently used to train and empower the unemployed Nigerian youth to become successful small business owners. 

The Business day of 14th February 2012, reported that the National Directorate of Employment (NDE) disbursed N2.8 Million for four unemployed graduates in Cross River State under its Enterprise Creation Fund (ECF) for small and medium Enterprises. Edem Duke, the Coordinator of the Directorate in the state disclosed in Calabar that the loan was to enable each of the beneficiaries who received N700,000 to start their own business. What can this little effort do in ameliorating the dangerous trend of youth unemployment?

The NDE office in Cross River State explained thus; “We expect that the young  graduate will use the money to set up their business, run them prudently in line with the training given, and pay back the money on time”. They were given moratorium of six months on the loan repayment and are expected to complete the repayment in two years. Again, 100 unemployed youths in the state were undergoing training which was tagged as unemployed Rural Youths Centered on hair dressing fashion designing, carpentry, Electrical Installation, welding and metal fabrication.

Recently, Director General of the National Directorate of Employment, Mallam Abubakar Mohammed, launched some new job creation Schemes aimed at supporting the cashless economy programme of government. It floated the QIK-QIK and Easy-BIZ Business ownership schemes all designed to create employment opportunities for Nigerian graduates in the cashless economy platform.

He stated that micro-business concerns created by the NDE have enjoyed the privilege of exposure to some of the best world-class business platforms. "NDE beneficiaries are regular participants/Exhibitors at the three major international trade fairs in Nigeria namely, Kaduna, Enugu and Lagos International Trade Fairs. The cost of participation in these International business gatherings which may be beyond the economic muscles of the young NDE supported entrepreneurs is made easy by the directorate, it buys pavilion and allows it’s beneficiaries to exhibit their goods and services therein at no cost to them".

These facts if verifiable is commendable but again should be expanded to cover more unemployed youth because youth unemployment is a big national calamity.

Through the establishment of manpower development support schemes, and their involvement in the training and retraining of entrepreneurs, Small and medium business have provided pool of potential entrepreneurs and business people who are well equipped to start and successfully manage industries whether small or large, not only in Nigeria, but worldwide. Successful business people in Nigeria like the Aliko Dangotes, the Alex Ibrus, Mike Adenugas, Illodigwes and the Orji Kalus started as Small and Medium Enterprises (SMES), before the growth of their various businesses into Conglomerates. These big businesses that commenced as small businesses are today big players in the job creation market.

Small business, according to economists, will reduce the dependence in government and large firms on salaries employment. It will stimulate rural development and the achievement of a meaningful level of broad economic and rural development, which will reduce the migration from rural to urban centers, once infrastructural facilities are provided like access to good road, communication facilities like telephone, postal services, provision of electricity and water expansion schemes. In this regard, the second tier of Government and even the third tier which are the States and Local Government structures must wake up and create the enabling environment devoid of corruption and multiple taxations for small businesses to grow in their areas of jurisdiction.                  

Small businesses also ensures that the dignity of labor  and human dignity as enshrined in relevant provisions of the Constitution of Nigeria in chapters two and four, would have been uplifted.  Small businesses, in the thinking of some economists creates what they branded as the spirit of “ME TOO”, I can do it attitude. 

Successful small business ownership by the youth will infuse in them the passion and the psychological joy in working for themselves and seeing their businesses grow and mature to conglomerates and derive joy in being sources of employment to other Nigerians. Anyone watching Aliko Dangote; Mike Adenuga, Cosmas Okoli; Orji Kalu can see happy people who have worked so hard to start up small businesses that have today grown into conglomerates that have created gainful employment opportunities to millions of Nigerians in the construction, transport, media, manufacturing and telecommunications sectors of the Nigerian economy.

No gain saying that small businesses will upgrade the social status of every Nigerian Youth, by showcasing them as very successful entrepreneurs and operators of small scale industries.

It is our considered opinion that for  Nigeria to attain greater heights as a great economy, it should make herself Small medium enterprise (SMEs) driven economy that is adequately supported by the needed Fund in addition, the government should encourage the creation of more micro-Finance banks that are well supported and regulated to render necessary financial supports to the right prospective beneficiaries with workable business blueprints to drive the Nigerian economy and create sustainable jobs for the youth.

We think that entrepreneurship will teach the Nigerian Youths essence of business, which is finding a human need and filing it. A healthy society then can be created as the entrepreneurs go to work.
The Individual Nigerian Youth will learn to have status that are legitimate and functional. “This is the secret of learning to float while all boats capsize”, so says the wise aphorism.


+Emmanuel Onwubiko & Miss. Sylvia N. Okonkwo, esq writes from Human Rights Writers' Association of Nigeria, Head office in Abuja. http://www.huriwa.blogspot.com/.

20/11/2012

1 comment:

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