HomeBusinessTackling rising unemployment through...

Tackling rising unemployment through SMEs – VELOXNEWS

By Bimbola Oyesola, [email protected]

With the unemployment rate in Nigeria on astronomical rise in spite of several government interventions, stakeholders have come to terms that small and medium enterprises (SMEs) may be the saving grace, if their potential is properly harnessed.

According to the National Bureau of Statistics (NBS), Nigeria’s unemployment rate has risen from 27.1 per cent in the second quarter of 2020, to 33 per cent.

This figure, chief executive officer of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, considered alarming.

Speaking at a yearly workshop organised by Labour Writers Association of Nigeria (LAWAN) in Abeokuta, Ogun State, recently, Yusuf expressed concerns about the unemployment rate of 33.3 per cent; underemployment at 22.8 per cent; youth unemployment 42.5 per cent and youth underemployment at 21 per cent in a given population of over 200 million, in which over 60 per cent are youths.

Yusuf, who spoke on the theme “Role of SMEs in Tackling Rising Unemployment in Nigeria,” however, expressed the conviction that SMEs would be a veritable tool in creating jobs for the growing population, as they are instrumental to the mobilisation and utilisation of small savings for investment.

According to him, compared to large enterprises, SMEs tend to use less capital per worker, have the capacity to use capital more productively and create more jobs per unit of capital.

He reasoned that, as the SMEs operate in the larger economy, they are not oblivious of the challenges in the country, but that notwithstanding, the SMEs still play a critical role in job creation and are the live wire of the Nigerian economy, hence they need to be encouraged to do more.

Yusuf, former director-general of the Lagos Chamber of Commerce and Industry (LCCI), opined that government needs to put in place appropriate support infrastructure to facilitate the growth of SMEs across all sectors.

He said SMEs promote entrepreneurial development and accelerate the use of local raw materials, thus deepening backward integration.

Some of the funds, according to him, tend to exist outside the banking system and boost job creation.

Yusuf cited the National Bureau of Statistics, which stated that as of 2017, out of 41.5 million MSMEs, 99.8 per cent were micro-enterprises, 0.17 per cent were small enterprises, while 0.004 per cent were medium enterprises.

Correlation with poverty

In the latest 2021 GDP data of the NBS, manufacturing contribution to GDP was 9 per cent, with almost 50 per cent of the contribution by the food and beverage sub-sector.

The result, he said, was partly a reflection of the impact of backward integration on the subsector’s performance.

Yusuf, said, with these scary figures, there was a correlation between unemployment and poverty, unemployment and crime rate and between unemployment and insecurity.

Alerting that some of the adverse social consequences of unemployment were already manifesting in various communities, he affirmed that SMEs are potent tools for tackling unemployment.

To further curb growing unemployment rate in the country, the CPPE chief said there was a need to stem the tide of de-industrialisation in the economy, which he said had been aggravating the rate of employment in the country.

He raised the alarm that many factory premises around the country had been taken over by activities other than manufacturing, such as event centres, supermarkets, worship centres and warehouses for imported finished goods.

“Many of our industrial estates have become a shadow of what they used to be. Evidence of all of these can be found in industrial estates located in Ilupeju, Ogba, Ikeja, Sango-Ota and Agbara,” he said.

He added that, in the eastern or northern part of the country the story is not different.

Yusuf said it was imperative to take urgent steps to stem the tide of de-industrialisation, if Nigeria must curb growing unemployment and increasing import dependence of the economy.

Listing some of the factors responsible for de-industrialisation, he said: “The influx of cheap and substandard products, which creates unfair competition with our domestically produced goods; the crisis in our foreign exchange market, which has elevated the volatility in the exchange rate, which worsened scarcity of foreign exchange; epileptic power situation; high cost of energy, especially diesel and gas; the phenomenon of multiple taxation imposed by the three tiers of government.”

The CPPE boss said other challenges included “excessive drive for revenue by agencies of government, which imposes a huge toll on our manufacturing industry, especially those who are in the MSME category.

“There is weak domestic patronage of what is produced locally. There are inadequate basic industries to support our manufacturing enterprises. Such industries include the iron and steel industry and the petrochemical industry. There are issues around policy inconsistency, weak infrastructural base, power, transportation, Apapa traffic issues, railway system and the ports, among others.”

While charting the way forward to address some of the challenges, Yusuf urged labour to be more tolerant and embrace economic reforms and the ideals of a market economy.

The move, he said, would accelerate investment growth, job creation, economic growth and poverty reduction.

He stated further that rigid ideological positions against reforms and a private sector-led economy had caused considerable setbacks for the Nigerian economy, impeding the creation of a strong and sustainable economy.

He said, if Nigeria must create jobs and reduce poverty, it should rapidly expand the scope of private sector investment in the economy: “I am, therefore, appealing to the labour unions to embrace the philosophy of private sector-led growth to enable the economy to grow and prosper. This is without prejudice to the protection of interest of workers across all sectors of the economy. This is not an ideological proposition. It is about what will benefit our economy and accelerate the pace of job creation, economic inclusion and prosperity for all.”

Similarly, to stem the tide of unemployment in the country, United Bank for Africa (UBA) PLC, said, for the SMEs to withstand the test of creating more jobs, the Federal Government and other financial institutions must provide policies, technical and financial support to them.

The organisation said it has supported SMEs enormously over the years, stressing that, if the country was serious about creating jobs and growing the economy, government must find a way to support SMEs, while the banks must support lending.

The bank praised the bank’s chief executive for recognising the role of supporting SMEs across Nigeria.

“We are told that we are where we are because this support was lacking. So, in support of the SMEs, my bank, UBA, has committed enormous resources towards supporting SMEs, not only in Nigeria but across Africa, because we are a global bank. This support catalyses developments in creating more jobs while helping to fight poverty in the African region,” the bank said.

According to the bank CEO, “This is therefore why UBA is totally aligned and fully-committed to supporting the SMEs through development of several products tailored towards assisting them to procure the much-needed capital and technical know-how required to successfully run their businesses. In this clime, it is extremely very difficult for businesses to survive based on the prevailing interest rates and this is the reason why the bank set up the SMEs account.”

- A word from our sponsors -


Most Popular

More from Author

When government agencies, security operatives work at cross purposes – VELOXNEWS

By Omoniyi SalaudeenThis is an unusual time, indeed. The nation...

Navy deploys NNS KADA to Guinea Bissau on ECOWAS mission

Nigeria has deployed its newly acquired Landing Ship Tank (LST)...

Arewa makes U-turn on Atiku – VELOXNEWS

From Noah Ebije, KadunaThe Arewa Consultative Forum (ACF) has opened...

Again, bandits kill 1 Indian, their 2 police escorts, 2 coy staff, abduct 3 others – VELOXNEWS

From Emmanuel Adeyemi, Lokoja Ajaokuta Local Government Area of Kogi State...

- A word from our sponsors -


Read Now

When government agencies, security operatives work at cross purposes – VELOXNEWS

By Omoniyi SalaudeenThis is an unusual time, indeed. The nation is now enveloped in confusion and the future is full of dark forebodings. All things put together, there is no prospect of a stable polity anytime soon as governance has taken a flight.With it, terrorists in...

Navy deploys NNS KADA to Guinea Bissau on ECOWAS mission

Nigeria has deployed its newly acquired Landing Ship Tank (LST) named the Nigerian Navy Ship(NNS) KADA to Guinea Bissau on an ECOWAS peacekeeping operation in that country.It was learnt that the mission is part of Nigeria’s effort in strengthening and enhancing security in the West African...

Arewa makes U-turn on Atiku – VELOXNEWS

From Noah Ebije, KadunaThe Arewa Consultative Forum (ACF) has opened up on the presidential candidacy of Alhaji Atiku Abubakar on the platform of the People’s Democratic Party (PDP) in the 2023 general elections.A member of the National Executive Council (NEC) of the ACF, Muhammad Alhaji Yakubu...

Again, bandits kill 1 Indian, their 2 police escorts, 2 coy staff, abduct 3 others – VELOXNEWS

From Emmanuel Adeyemi, Lokoja Ajaokuta Local Government Area of Kogi State has come under serious threat again as gunmen suspected to be bandits on Friday evening waylaid a vehicle conveying workers of the West Africa Ceramic Company, Ajaokuta, killing six of them and abducted about three of...

Threat to impeach Buhari real –Senator Bassey Gershom – VELOXNEWS

By Daniel KanuSenator Bassey Gershom is the leader, Cross River National Assembly Caucus and Senator representing Southern Federal Constituency.In this exclusive chat with Sunday Sun, the lawmaker who enjoys massive love and popularity among his people speaks on Cross River politics, impeachment threat to President Muhammadu...

Army Cadets 69 Regular Course to fight insecurity–Director, Military Training – VELOXNEWS

 From Gyang Bere, JosThe Director, Military Training, Nigerian Defence      Academy, Brigadier Gen. Emmanuel Emekah has said the NDA has modified its training curriculum to tackle the current security challenges in the country.Gen. Emekah disclosed this on Saturday during the Adventure Training Exercise for Army Cadets of 69...

Our plan for Diaspora party in 2027 –Adedamola Aminu, former Mayor of Lambeth, UK – VELOXNEWS

From Christy Anyanwu in LondonAdedamola Aminu,  former mayor of London Borough of Lambeth is concerned about the situation in Nigeria, particularly education, lack of electricity, bad roads, exchange rates, among others.Looking at his sojourn in UK, he disclosed that he started his political tenure, when  he...

Gunmen invade Imo police station, kill 4 officers, Okada rider – VELOXNEWS

From Stanley Uzoaru, OwerriGunmen on Friday night invaded the Divisional Police Station at Agwa in Oguta Local Government Area of Imo State, killing four officers on duty and a commercial motorcyclist, whose wife was also shot and is in critical condition in the hospital.This is coming...

PDP aspirant opposes Ikpeazu’s stance on zoning – VELOXNEWS

By Omoniyi SalaudeenA Peoples Democratic Party (PDP) governorship aspirant in Abia State for the 2023 general elections, Mr Ndubuisi Etugo Ogah, has opposed the decision of Governor Okezie Ikpeazu to concede the governorship ticket of the party to Professor Uche Ikonne of Isiala Ngwa North Local...

…Security operatives descend on Izombe community, injure 10, raze property – VELOXNEWS

From George Onyejiuwa, OwerriThe Izombe Community in Oguta Local Government Area of Imo State has lamented the invasion of its community, which led to the burning and looting of shops, as well as innocent persons sustaining both bullet and machete cut injuries.It would be recalled that...

Anxiety over Ayu position as party’s chair – VELOXNEWS

From Ndubuisi Orji, AbujaHope for resolution of the crisis rocking the Peoples Democratic Party (PDP) in the aftermath of its national convention rose last week, following a meeting between its Presidential candidate, Atiku Abubakar and Rivers State governor, Nyesom Wike.The meeting, which was the first time...

You’re shameless mole, Abia group berates Emenike for attacking Orji Kalu – VELOXNEWS

By Agatha EmeadiA socio-political group, Abia North Peace Foundation (ANPF), has berated the factional governorship candidate of the All Progressives Congress (APC) in Abia State, Ikechi Emenike, for accusing the Chief Whip of the Senate, Dr Orji Uzor Kalu, of anti-party activities.Emenike had through a faceless...