Unemployment In Nigeria Case Study

CHAPTER ONE

INTRODUCTION

Background of the Study

The population of Nigeria may be divided into two categories for the purpose of this study; the economically active and the economically inactive. The economically active population (labour force) or working population refers to the population that is willing and able to work, including those actively engaged in the production of goods and services (employed) and those who are still unemployed. The unemployed refers to people who are willing and capable of working but are unable to find suitable paid employment (Uhunmwangho) 2008.

The next category which is the economically inactive population refers to people who are neither working nor looking for work. Examples include housewives, fulltime

Unemployment is one of the development problems that face every developing economy in the 21st century.

According to the Central Bank of Nigeria (2003), the national unemployment rate rose from 4.3 percent in 1970 to 6.4 percent in 1980. The high rate of unemployment observed in 1980 was attributed largely to depression in the Nigerian economy during the late 1967s.

Specifically, the economic downturn led to the implementation of stabilization measures which included restrictions on exports, which caused import dependency of most Nigerian manufacturing enterprises, which in turn resulted in many companies operating below installed capacity.

This development led to the closure of many industries, while the few that survived were forced to retrench a large number of their work force. Furthermore, the Nigerian government also placed an embargo on employment.

Specifically, total disengagement from the Federal Civil Service rose. 2,724 were retrenched between 1980 and 1986. Owing to this, the national unemployment rate fluctuated around 6.0% until 1987 when it rose to 7.1%. It is important to state here that the structural adjustment programme (SAP) adopted in 1986 had serious implication on employment in Nigeria as unemployment rate declined from 7.1% in 1987 to as low as 1.8% in 1995, after which it rose to 3.4% in 1996, and hovered between 3.4 and 4.7% between 1996and

Suddenly, we are confronted with the statistic that 40 million Nigerians are unemployed. It is indeed worrisome for a country with a population figure of 140 million (as indicated in the 2006 census report) to have 40 million unemployed (NPC, 2006).

Nigeria, since the attainment of political independence in 1960, has undergone various fundamental structural changes. These domestic structural shifts have however not resulted in any significant and sustainable economic growth and development.

The outrageous profits from the oil boom encouraged wasteful expenditures in the public sector and also distorted the revenue bases for policy planning.

However, these economic and financial structural reforms put in place have not yielded significant results.

It is generally agreed that unemployment is a symptom of basic economic illness of macro-economic disequilibrium. During the early days, there was much controversy over the definition and origin of unemployment. The controversy revolved around the distinction between voluntary work and