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#SEconomy: Redesigning Nigerian Private Sector For Inclusive Growth and Job Creation

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“Nigeria would need to create 120 million jobs within the next ten years, and we cannot have a prosperous middle class that assures for growth and stability, until we get more of jobs”.
DOMINIC BARTON – GLOBAL MANAGING DIRECTOR, McKINSEY AND COMPANY.

“At this point in our development race, every structural deficits and misalignments, both in the macro and micro economy, especially among the under 35, must be fixed if a private sector led growth will be inclusive and create jobs. Failure to do this will only make projects like the youwin and other schemes, less sustainable for the long run”.
GOSPEL OBELE – 21st CENTURY DEVELOPMENT ECONOMIST.

The theory that private sector led growth can place economies on higher and steady growth trajectories, solve the rising unemployment challenge, effectively manage effects and utilize benefits from globalization has emerged as a global phenomenon and discussion. These discussions on every panel at the world and regional economic forums have seen strong partnership agreements and commitments from national, regional and the international communities. The private sector when operating in an inclusive driven political and socioeconomic environment, can boost growth and development through the following medium;

  • Job Creation – The private sector tend to absorb, and effectively utilize labour than State owned enterprises(SOEs). This naturally attracts labour, as the more private sectors get on the scene, the more labour is engaged. Ultimately, as this process gets sustained in the long run, we would have a situation of a good segment of the population engaged, with a rise in her incomes, and invariably, a prosperous middle class. #
  • Human Capacity Development – With the presence of an active and vibrant private sector, there will be a rising number of skilled and productive workers. This happens when labour is optimally utilized, and trained on the job to acquire new skills and tool-sets.
  • Increased Government Revenue – Industrialisation, which explains the dominance of the private sector in major sectors of a well-diversified economy, leads to higher returns for the government, through taxes, licenses, fees and a host of other channels. When this revenue is collected it enables income redistribution, that is putting in place all that is needed to enhance livelihood and to pursue government goals and objectives.

It is important here for me to state that the opportunities in Nigeria are immense, she happens to be the largest population in Africa with up to 70% of her population under 35. This makes her the largest consumer market, with an increasing taste for lifestyle-related goods and services. Yet, this segment is the mostly unemployed, despite the positive upward sloping curve of the consumer market.
So where did we go wrong?

Existing Misalignment and Challenges With The Private Sector in Nigeria

I intentionally added this so as to help us understand the intensity of what we are dealing with. Inasmuch as the current administration has placed initiatives such as the youwin, which is encouraged to produce 22,000 jobs a year, with an every beneficiary providing an average of 9 jobs, a lot more especially on structural deficits must be fixed.

  • The absence of basic infrastructure, to support private sector efficiency. No nation can experience the benefits of the private sector, if the basic infrastructure such as good transport networks (road, water, port and rail), electricity, internet access, telecommunications, and environmental friendly systems are not in place.
  • The cost and process and registering businesses, unfriendly regulations and generally a highly unpredictable macroeconomic environment, as in the case of the recent devalued naira.
  • Extractive nature of institutions, which is evident in already established investors, getting affiliated with political parties and sponsoring campaigns, to encourage and empower these institutions to favour a few, by drafting policies, granting import waivers and a host of others when they get into power. This stirs already troubled waters for incoming investors/young entrepreneurs.
  • The presence of about 85% of the Lagos economy (Nigeria’s commercial capital) and 60%of the Nigerian economy in informal sector, who engage in price wars and others. This restrains the private sector from its maximum profitability.
  • The Nonchalant nature of the Nigerian youths towards work-life, their inability to delay gratification, lust for entertainment and sports, the ”get rich quickly”, and “every youth becoming an entrepreneur “ syndrome. All of these, question the sustainability of private sector growth, even in multi-nationals.

 

BIG DEVELOPMENT QUESTION (BDQ);

How can we practically eliminate misalignments, and make private sector led growth inclusive and sustainable?

The way forward is harnessing private sector for shared growth and sustainability

  • Eliminate misalignments, by creating inclusive socio-economic environment , value-reorientation campaign and making informal sector productive.
  • Create laws that protect trademarks, business innovation, and intellectual properties.
  • Restructure the revenue base, to enable us leverage on new performing non-oil sectors like entertainment, services, construction etc. This will enable us reduce the revenue dependence on oil, and reduce stringent revenue measures linked to private sector turnovers. But more importantly encourage entrepreneurs to seek opportunities in the the Agricultural sector. It is an untapped sector.
  • Discouraging import waivers, reinforcing the need ,through smart media campaigns, for business ethics, core values, excellence and the patronise of made in Nigeria goods.
  • Heads of states in African countries should work together, in ensuring an improved intra-African trade, this will improve competition better, mostly among youths.
  • It is indeed amazing, 170million Nigerian consumers by 2030. If Nigerians must hold a huge market share of this, then we will need to go beyond the theoretical entrepreneurship and private sector talks, to more scientific based researches, to helping us understand and harness opportunities in this market. Such would include, an in-depth understanding of the market itself and the changing patterns of consumption, the switch in consumer cluster, our route to market, speaking the youth language etc.

I conclude by stating that a private sector led growth is not for feeble minds or a lazy young population. Not everyone can be entrepreneurs in the 21st century, especially the kind (sustainable entrepreneurship) needed to reduce the unemployment bracket. Cheers!

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About Author

CRO – Project Change Initiative A 21st Century Leadership, Organizational and Economic Development Strategist For comments, please visit Obele Jesuite on facebook, on twitter, gospel_obele@yahoo.com. For email: or contact 08130070991.

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