It is no longer news that Nigeria has an unemployment crisis. As at Q3 2018, the number of unemployed people (completely unproductive or did absolutely nothing) in Nigeria was 9.7 million. That is more than the entire population of Togo (8m). A detailed look at the unemployment numbers is even more sobering. Out of those 9.7 million people, 3.1 million or 32% have been unproductive for more than 3 years.
The National Bureau of Statistics says that 69.5 million people are employed in Nigeria. However, it is unclear how many of these jobs are high-paying or how many of them are low-wage jobs. Data from PENCOM, the pensions regulator, suggests that most of the jobs belong to the latter group. According to the regulator, only 8.47 million people or 12% of the employed population contribute to pension funds in Nigeria. While the data might also suggest that the compliance rate to the mandatory pension regulation is low, it gives us an indication of the number of people employed in formal jobs. An executive of a Pension Fund quoted by the Financial Times bluntly attributes the low numbers to “a large number of people working informally, primarily as labourers or subsistence farmers.” The dismal employment data is the same from Casablanca to Cape Town. Across Africa, unemployment rates are now projected to hit 30% among the youth according to the International Labour Organisation (ILO).
To solve the unemployment problem, Africa needs to create 15 million jobs a year according to Akihiko Nishio of the World Bank. For Nigeria, 3 million new jobs are required yearly according to the consultancy PricewaterhouseCoopers (PWC). This is without a doubt daunting for governments and policymakers so the danger is that they may focus more on the creation of manual labourer and subsistence farmer jobs. Whilst this is a laudable objective, to truly lift people out of poverty, we need to invest in programmes that will create high-quality, well-paying jobs.
The African continent missed the opportunity to use its proximity to Europe and the Middle East and the cultural connection its population shares through Arabic, English, French and Portuguese languages to maximise outsourcing jobs. Unfortunately, we have been beaten to it by China and India. Is it too late for African countries to come up with a strategy to tap into some of the jobs outsourced?
The good news is that there are still opportunities. Research by N-iX, a provider of software development outsourcing services shows that $150 billion worth of IT services were outsourced to China and India from Europe Middle East and Africa in 2017. The company also cited that there would be 1 million unfilled IT specialist job openings in the U.S. by 2020. Since the U.S. has developed an apathy for immigration, many of these jobs are likely to be outsourced.
What will make Nigeria an attractive location for international technology companies? The Interactive Engineering Team Growth Map by Hackerrank, a technology hiring platform can help. The map uses 9 attributes to recommend the best location for software engineering offices. For simplicity, I have grouped these attributes into Talent Readiness (TR), Infrastructure Readiness (IR), Country Readiness (CR) and Talent Competitiveness (TC). TR encompasses technical skills, the number of STEM graduates and English proficiency. IR represents “Internet Speed” and the “Cost of Rent” while “Corruption Perception” and “Tax on Profit” are grouped under CR. Lastly, “Competition for Talent” and “Average Senior Developer Salary” are grouped under TC.
Nigeria’s progress in TR is already paying off with investments. For example, Microsoft has pledged to invest $100 million in Nigeria and Kenya. According to Quartz, this investment was partly motivated by Nigeria being the fourth-fastest growing developer community on GitHub, a platform for hosting and reviewing code for software projects. Last year, an entrepreneur who was visiting Nigeria for the first time heard about the Dufuna Coding Camp. Inspired by the quality of talent from the programme, she decided to employ some of the graduates. The employees are now working remotely as data designers for America-based technology companies. To make a dent in the unemployment numbers, however, we need to significantly increase the number and quality of software developers in the country. This is why Dufuna has partnered with Paradigm Initiative to relaunch its coding programme.
One of the challenges faced by coding programmes like Dufuna is that they can only effectively train people that have computers. To address this, the government can borrow from Rwanda’s Viziyo initiative, a laptop-purchase programme for university students. Nigeria can also borrow from the Kenyan Constituency Innovation Hubs project which will equip over 1000 hubs across Kenya’s 290 Constituencies with free WiFi and devices. These programmes aim to empower citizens with relevant digital skills for employment and entrepreneurship.
We have millions of smart and energetic young people that can be employed by companies from around the world. These companies would invest millions of dollars in countries with knowledgeable talent. Unlike other natural resources, our youth are not attractive in their raw state. If we make sufficient investments in them, however, the jobs will follow.
Olatokunbo Fagbamigbe for Paradigm Initiative