States Inaction Exacerbates Nigerians Unemployment Crisis

States Inaction Exacerbates Nigerians Unemployment Crisis

The failure of state governments to create conditions that facilitate private sector job creation is worsening Nigeria’s employment situation…READ MORE…

In October 2024, the World Bank reported that only 12.4 percent of Nigerians were primarily engaged in wage employment. Despite this alarming statistic, many state governors seem indifferent to the worsening economic crisis.

A brief analysis of state budget performance for the third quarter of 2024 shows that governors have not prioritized initiatives aimed at fostering job creation, with Lagos State standing out as a relative exception.

While wage employment is crucial for alleviating poverty, such opportunities remain limited across all sectors of the economy.

According to the Nigeria Bureau of Statistics (NBS), as of 2022, 133 million Nigerians were classified as multidimensionally poor. This troubling statistic reflects the overall poverty levels across the country, similar to how unemployment data reflects the nation’s economic condition.

Kalu Aja, a financial expert based in the United States, recently pointed out the proactive strategies American governors use to attract investments.

“In the US, a Texas governor might travel to California to entice residents and businesses to relocate to Texas. Governors are assessed based on the jobs they generate and the industries they draw in. They actively promote their states as ideal business locations,” he stated.

In contrast, many Nigerian governors have failed to address the hardships faced by their constituents or to create conducive environments for businesses to flourish and generate employment.

States like Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Edo, Gombe, Imo, Jigawa, Nasarawa, Taraba, Yobe, and Zamfara have not attracted foreign investment in nearly three years. From 2021 to the third quarter of 2023, these states collectively failed to secure any of the $14.85 billion in foreign investments injected into Nigeria.

“If investments are lacking, how can jobs be created for the people? This is the gap within the states. We often focus too much on the federal government while state leadership misuses public resources,” remarked Ike Ibeabuchi, an emerging markets analyst.

The Disconnect Between Budgets and Impact

Focusing on the South-East region, Alex Onyia, CEO of Educare, pointed out that despite significant budget allocations, states in this region have made little progress in education in 2024. Onyia highlighted a disturbing situation: “Enugu State allocated N134.5 billion for education last fiscal year, which is 33 percent of its budget. Yet, only one smart school was completed out of a proposed 260, with no renovations or procurement of laboratory equipment.”

“Ebonyi State, despite budgeting N46.1 billion for education, showed no significant results. Imo State’s allocation of N474.4 billion and Anambra’s N8.4 billion yielded similar poor outcomes. Abia State budgeted N18.1 billion but has little to demonstrate for it.”

Oyo State presents another sobering case. During his 2025 budget presentation, Governor Seyi Makinde acknowledged the dire state of educational infrastructure, stating, “From personal experience, I know that access to quality education can transform our people’s future. This year, we missed the chance to repair at least 100 dilapidated secondary schools.” Despite this acknowledgment, the state’s capital expenditure performance in the third quarter (Q3) was only 39.4 percent, despite aggregate revenue performance reaching 78.2 percent during the same timeframe.

Lagos State performed slightly better, achieving a 57.8 percent capital expenditure performance by the end of Q3, in contrast to Oyo’s 39.4 percent and Anambra’s 30.9 percent.

However, even Lagos failed to meet expectations. By the third quarter, which accounts for 75 percent of the fiscal year, Niger State reported a disappointing 26.8 percent capital expenditure performance, with education-specific spending only at 25.6 percent.

The Role of Education and Skills Development

According to the World Bank, “High employment and high poverty can coexist.” To address this, the bank advocates for wage jobs as a path out of poverty, necessitating alignment between skills development and labor market requirements.

Data demonstrates that individuals with post-secondary education have a significantly higher chance of securing high-skill jobs (45.7 percent) compared to those with only senior secondary education (7.2 percent). This underscores the critical need for advanced education and focused skills training to break the cycle of poverty.

To tackle high poverty rates alongside high unemployment, it is essential to equip individuals with relevant skills regardless of their educational background.

Furthermore, encouraging education beyond secondary school is crucial, as higher education is closely linked to access to high-skill and better-paying jobs, according to the World Bank.

Empowering Women and Youth

The World Bank emphasizes the importance of enhancing women’s employment outcomes. This includes keeping girls in school, expanding childcare options, and addressing restrictive gender norms through economic empowerment programs.

It also involves providing young people with access to productive jobs, supporting skills development, facilitating job placements, and enabling managed migration to areas where their skills are in demand.

The Performance Gap Among States

A review of Q3 2024 budget performance reveals a concerning trend: apart from Lagos, most states such as Oyo, Anambra, and Niger have fallen short of initiatives aligning with the World Bank’s recommendations.

For example, Oyo State allocated over N2 billion for classroom and library repairs but failed to utilize any of the funds by Q3. Such investments are essential for equipping individuals with the skills necessary for high-skilled employment and breaking the poverty cycle.

In a study by Stephanie Koons, an American researcher, it was stated, “Education is often considered the ‘great equalizer’ that closes opportunity gaps across society.”

The Organization for Economic Cooperation and Development (OECD) noted, “Investing in human capital can be a source of resilience in the long run and help ensure the well-being of future generations, particularly in countries with large youth populations.

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