The impact of unemployment on nigerian economy (1980-2010)

Thesis Overview

<p> 1.0 INTRODUCTION<br>1.1 BACKGROUND OF THE STUDY<br>Unemployment is generally seen as a macro-economic problem as<br>well as socio-economic problem .Unemployment arises as a result of<br>insufficient and non-availability of jobs to correspond with the growing<br>population, even those who are employed sometimes live with the fear of being<br>unemployed due to job insecurity and retrenchment of workers. There is<br>employment of factors of production if they are engaged in production. The<br>term unemployment could be used in relation to any of the factors of production<br>which is idle and not being utilized properly for production. However, with<br>reference to labour, there is unemployment if it is not possible to find jobs for<br>all those who are eligible and able to work. Labour is said to be underemployed<br>if it is working below capacity or not fully utilized in production (R.A.I<br>Anyawuocha 1993)<br>Unemployment can either be voluntary or involuntary. Voluntary in<br>the sense that one chooses not to work because he or she has means of support<br>other than employment. Example is an idle rich man. On the other hand,<br>involuntary unemployment exist when persons who are eligible and willing to<br>work at the prevailing rate of pay are unable to find work. (Anyanwa 1995).<br>2<br>According to the central bank of Nigeria (2004), unemployment rose to 30%<br>during 2004 statistics on unemployment rate.<br>Unemployment has been seen as a world-wide economic problem and<br>has been categorizedas one of the serious impediments to social progress .Apart<br>from representing a huge waste of a country‟s manpower resources, it generates<br>welfare loss in terms of lower output thereby leading to lower income and well<br>being of the people (Akinboyo, 1987, and Raheem 1993). Unemployment is a<br>very serious issue in Africa (Vandemortele, 1991, and Rama 1998), and<br>particularly in Nigeria (Oladeyi, 1994 and Umo, 1996). The need to avert the<br>negative effect of unemployment has made the tackling of unemployment<br>problems to feature very prominently in the development objectives of many<br>developing countries.<br>In the study of unemployment in Africa Okonkwo (2005) identified<br>three (3) cause of unemployment, the educational system, the choice of<br>technology which can either be labour intensive or capital intensive and<br>inadequate attention to agriculture. The use of machines to replace work done<br>by labour and computerization has contributed to these social problems in the<br>sense that what for example forty (40) men can do manually a machine will<br>only need like five (5) men. Therefore, the remaining thirty five (35) are<br>unemployed. More so, lack of enough education and skill to have access to<br>credit and capital.<br>3<br>One particular feature of unemployment in Nigeria is that it was more<br>endemic in the early 1980‟s than any other period. According to Udabah<br>(1999:62), the major factor contributing to low standard of living in<br>underdeveloped countries in their relative inadequate or inefficient utilization of<br>labour in comparism with advanced nations. Unemployment rate is measured by<br>the proportion of the labour force that is unemployed divided by the total<br>number of the labour force. The total labour force was projected at 61,249,485<br>in 2007 indicating an increase of 3.9%. Total employment in 2007 stood at<br>52,326,923 compared with 50,886,836 in 2006. This represents an annual<br>increase of 2.8%. The labour force consists of the number of people ageing 18<br>and over who are employed (that is, those who currently have jobs) and<br>unemployed (those who do not have jobs but who are actively looking for<br>work).Individuals who do not fall into either of these group such as retired<br>people and discouraged workers are not included in the calculation of the labour<br>force.<br>The international labour force organization (ILO) defines<br>unemployment as the proportion of the labour force which was available for but<br>did not work for at least one hour in the week preceding the survey period.<br>National Bureau of statistics (N.B.S). Nigeria defines unemployment as the<br>proportion of the labour force that is available for work but did not work for at<br>least thirty nine (39) hours in the week preceding survey period.<br>4<br>Unemployment according to lipsey (1963:456) brings about<br>economic waste and cause human suffering. According to Fadayomi, 1992,<br>Osinubi, 2006, unemployment is as a result of the inability to develop and<br>utilize the nations manpower resources effectively especially in the rural sector.<br>The socio-economic effect of unemployment includes: fall in<br>national output, increase in rural-urban migration, waste of human resources,<br>high rate of dependency ratio, poverty, depression, frustration, all sorts of<br>immoral acts and criminal behaviour e.g prostitution, armed robbery e.t.c. The<br>social effect of unemployment brings to light the need to proffer possible<br>solution to salvage our nation Nigeria<br>1.2 STATEMENT OF THE PROBLEM<br>Working with the data from the national bureau of statistics, it<br>indicates that the national unemployment rate in the first quarter of 2007 was<br>14.6%, compared with 13.7% in 2006. The urban and rural rates were 14.4%<br>and 15.0% respectively compared with 10.2% and 14.8% in 2006. Further<br>analysis showed that the distribution of unemployment ranged from 14.1%vfor<br>the age group of 25-44 to 23.5% for the age group of 65-70. Desegregation<br>according to geopolitical zones showed a very uneven distribution with the<br>south-south zone having the highest unemployment rate of 29.5% and southwest<br>at the rear with 8.5%. Between these extremes were the north-east with<br>18.5%, south-east 18.1%, north central 15.8% and north-west 14.2%.<br>5<br>It is based on the increasing problem posed by unemployment on<br>individuals and the nation at large that government has been embarking on<br>various policies to control and reduce unemployment but yet has not yielded<br>any positive result, rather it seems to be escalating. Drastic measures must be<br>taken by government to curtail this problem of unemployment. The statement of<br>problem is based on the economic, social and political effects of unemployment <br></p>