Job Creation: Facts and Falsehood about Unemployment in Nigeria

In the developing world, successful small businesses are the primary engines of job creation, income growth, and poverty reduction. That is a fact.

American youths occupying the farms

According to the experts, what constitutes a small business varies widely around the world. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. What constitutes “small” in terms of government support and tax policy varies by country and by industry, ranging from fewer than 15 employees under the Australian Fair Work Act 2009, 50 employees according to the definition used by the European Union, and fewer than 500 employees to qualify for many U.S. Small Business Administration programs, although in 2006 there were over 18,000 “small businesses” with over 500 employees that accounted for half of all the employees employed by all “small business “.  Small businesses can also be classified according to other methods such as sales, assets, or net profits.

Small businesses are common in many countries, depending on the economic system in operation. Typical examples include: convenience stores, other small shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing, and online business, such as web design and programming, etc.

A small business can be started at a very low cost and on a part-time basis. Small business is also well suited to internet marketing because it can easily serve specialized niches, something that would have been more difficult prior to the internet revolution which began in the late 1990s. Adapting to change is crucial in business and particularly small business; not being tied to any bureaucratic inertia, it is typically easier to respond to the marketplace quickly. Small business proprietors tend to be intimate with their customers and clients which results in greater accountability and maturity.

Independence is another advantage of owning a small business. One survey of small business owners in the US showed that 38% of those who left their jobs at other companies said their main reason for leaving was that they wanted to be their own bosses. Freedom to operate independently is a reward for small business owners. In addition, many people desire to make their own decisions, take their own risks, and reap the rewards of their efforts. Small business owners have the satisfaction of making their own decisions within the constraints imposed by economic and other environmental factors.

However, entrepreneurs have to work for very long hours and understand that ultimately their customers are their bosses.

Several organizations, in the United States, also provide help for the small business sector, such as the Internal Revenue Service’s Small Business and Self-Employed One-Stop Resource. The Nigerian veresion is Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) which was established by the SMEDAN Act of 2003 to promote the development of micro, small and medium enterprises [MSME] sector of the Nigeria Economy. The Agency positions itself as a One-Stop Shop for MSME Development. Micro Enterprises are included in the clientele of the Agency since they form the bedrock for SME’s.

Two-Thirds of American jobs come from small business

The U.S. Census Bureau data reports that more than 77 percent of small businesses consist of one employee. Additionally, about 18 percent are considered “micro-businesses”, or companies that employ less than 10 individuals.

But suprisingly, in Nigeria, a hairdresser or photographer sees himself as unemployed! Shockingly true. A barber in a small street corner rakes in sometimes 6,000 naira daily (even with power generating sets), makes a net profit of 4,000 naira daily after fuelling costs,but still complains of being ”unemployed” because he is not a banker, government worker or other typical Nigerian stereotype of what employment is.

Some of these barbers apply for jobs in Government ministries, Departments and Agencies (MDAs) or banks and other private companies, depriving those with genuine unemployment claims of job opportunities.

Of course it is a desireable thing to move up the social ladder with higher paying job opportunities but the truth must be told, those in small businesses are not unemployed. Never. They may not be satisfied with their personal incomes because of their inability to live within their means, but that does not qualify them as ”unemployed” per se. Records show that some barbers even ”earn” more than the ‘office job’ they seek in the MDAs would have paid them. But the opportunities to indulge in corrupt practices is probably the real lure. In time past, it was not fashionable to seek for government jobs. Private sectors paid higher as the dream of a young graduate was either the oil companies or at worst, banking sector.

The opportunities for job creation is actually improving in Nigeria. The power sector is obviously improving by the day as attested to by even sworn naysayers. Agriculture, capable of providing job opportunities for millions, has been revitalized with the various opportunities in place for farmers and agro-allied small businesses.

Excerpts from the recent Sure and Steady Transformation Report in the Past 12 months shows that the Ministry of Agriculture and Rural Development has developed and is aggressively implementing an Agricultural Transformation
Agenda. The focus is to assure food security, reduce expenditure of foreign exchange on food imports, diversify the economy, generate foreign exchange and create jobs.

In a major departure from past approaches, agriculture is now being treated as a business, not a development program. The agenda is focused on major policy reforms to eliminate corruption in the seed and fertilizer sectors, improve the functioning of market institutions, establish staple crop  processing zones to attract private sector into areas of high production to reduce post-harvest losses, add value to locally produced crops and foster rural economic growth. In addition, the agenda includes improvement in rural infrastructure and access of farmers to financial services and markets.

It will be beneficial for all Nigerians if we cash in on the new opportunity for our common growth instead of playing politics with obvious realities.

Our farmers are ageing while our youths look down on farming with ignominy.They think it is a ”dirty” endeavour and some are wary of missing out on favourite TV programs, internet connectivity and night clubbing. But there is a solution for that. Bring premiership matches, Spanish La Liga, Big Brother Africa and other attention distracters to the farms! Bring E-Learning to the farms. Make farming more attractive by providing modern mechanized tools and implements ergonomically designed to reduce fatigue. LGAs and State governments can create enabling environments by providing land and clearing them for this purpose. Large corporations can assist the job creation process by utilizing funds meant for Corporate Social Responsibilty to establish youth farming settlements where youths can enhance their skills, prepare for an independent future and provide food, fibre and funds for the people, industries and their pockets respectively, while still enjoying what they might have been missing out in town.

God bless Nigeria

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