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DEVELOPMENT PLANNING AND EMPLOYMENT GENERATIONS: ACHIEVEMENTS, CHALLENGES AND PROSPECTS IN NIGERIA Andrew Onwuemele Social and Governance Policy Research Department, Nigerian Institute of Social and Economic Research, Ibadan E-mail:
[email protected] Abstract Development planning has been a consistent phenomenon in Nigerian administration since 1946. The Nigerian government has aspired to achieve development through the use of various types of plans. These plans have stressed the importance of manpower development, utilization, promotion and creation of job opportunities. The impact of these programmes and policies on employment generations over the years is yet to be determined. This paper assessed the achievements, challenges and prospects of these policies on employment generation from 1970 to 2008. The paper mainly utilizes secondary data through the analysis of books, journals, reports and electronic sources. Data collected were analysed using simple descriptive statistics. Results indicate that the various schemes have not made much impact in terms of employment generation. However, it shows that much progress was made in terms of employment generation during the era of fixed medium term planning in Nigeria. It further revealed that the public sector dominated the employment sector within the period under review. Flawed policy, collapse of investment and financial intermediation among others were identified as the major challenges facing employment generation in Nigeria. Among other issues, the paper calls for policy alignment and political will on the part of government. It further calls for all embracing employment policies including the various stakeholders particularly the private sector. Keywords: Planning, employment, policy, poverty Introduction The problem of economic and social progress has been a major concern of many nations in both the developed and developing countries of the world. Thus, different nations adopt varied strategies in achieving economic and social progress (Omuta and Onokerhoraye, 1995). Development planning was the main strategies used by many governments and organizations to set their visions, missions, goals, and effective means of realizing development. Development planning has been a consistent phenomenon in Nigeria since 1946. The Nigerian government has aspired to achieve development through the use of various types of plans, namely short term (Annual Budget), medium and long term plans. The National Economic Empowerment and Development Strategy (NEEDS) which is the country’s poverty reduction strategy paper (PRSP) is the latest in the history of medium term plans for the country and promises to surmount some of the problems that marred the success of previous plans (Marcellus, 2009). With rapid population growth in Nigeria, unemployment has since become a major issue of concern to successive government in Nigeria since the 1960s. The negative effects of unemployment on Nigerian economy cannot be over emphasized. It results in non-utilisation of resources leading to low productivity. It is also a major cause of rural-urban drift which has led to congestion problems in the urban centres with its attendant problems such as urban
unemployment, destitution and high rate of criminal activities, among other problems (Fasoranti, 2010). Unemployment is a serious impediment to social progress. Apart from representing a colossal waste of a country's manpower resources, it generates welfare loss in terms of lower output thereby leading to lower income and well-being (Akinboyo, 1987; and Raheem, 1993). In the light of the above, successive governments in Nigeria have made several attempts to solve this social menace. One of the major strategies was the mainstreaming of employment creation programmes and policies into the National Development Planning. Consequently, all the post-independence National Development Plans had employment generation and promotion of gainful employment among their cardinal objectives. This paper assesses the accomplishments, challenges and prospects of the various employment promotion schemes as outlined in the various development plans in Nigeria. National development plans in Nigeria Development planning in Nigeria can be classified under three eras. These are the Era of Fixed- Term Planning (1962-85), the Era of Rolling Plan (19901998), and the New Democratic Dispensation (1999 till date). The Era of Fixed Medium Term Plan (1962-1985) witnessed four successful plans in Nigeria. These are the First National Development Plan (1962-1968), the
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Second National Development Plan (1970-1974), the Third National Development Plan (1975-1980) and the Fourth National Development Plan (1981-1985). The first plan covered the period 1962-63-1967-68 and provided for capital expenditure of 2.2 billion Naira. The implementation of the plan was extended to 196970 due to the Nigerian civil war. One major employment promotion scheme in the First National Development Plan was the establishment of the National Manpower Board (NMB) in 1962. The Second National Development Plan covers the period 19701974 with a capital expenditure of about 3 billion Naira. The Plan witnessed attempts to rectify some of the shortcomings of the first development plan. The planning machinery was strengthened, the need for public input was recognized by preceding the plan preparation by a national conference on economic development and reconstruction, and the need for inputs from various levels of government, ministries and agencies especially relevant planning agencies like the National Manpower Board and Federal Office of Statistics, and an Advisory Body made up of representatives drawn from the universities, trade union, other ministries and the private sector. The Third National Development Plan began in 1975 with a plan total capital expenditure of 30 billion Naira. This was later revised to 43.3 billion Naira. In terms of sheer magnitude, the Third National Development Plan represented a major departure from its predecessors and constituted a watershed in the country’s planning experience (Federal Ministry of National Planning, 1981). However, the government could only spend N29.43 billion out of the projected expenditure of N43.3 billion as reviewed. The Fourth National Development plan covers the period 1981-1985. The overriding aim of the plan is to bring about an improvement in the living conditions of the people. The Plan is the first plan to be formulated by a democratically elected government under a new constitution based on the presidential system of government. Again, with a projected capital expenditure of 82 billion, the plan is considerably bigger than all its predecessors. Thirdly, it is the first plan in which the local governments participated in its design and formulation (Federal Ministry of National Planning, 1981). The Rolling plan era (1990-1998) The First National Rolling Plan covered the period 1990-1992. The main objective was to consolidate the achievements made so far in the implementation of the Structural Adjustment programme and address the pressing problems still facing the economy. One of the key priority programmes of the First National Rolling Plan was the strengthening of the on-going programmes of the National Directorate of Employment. The Second
National Rolling Plan (1993-1995) marks the beginning of the second cycle of three-year Rolling Plan. The general policy measures of the Second National Rolling Plan include tackling the observable lapses and inefficiencies in the operation of monetary and credit instruments, low level of capacity utilization of industries and the rising trends of unemployment. The 1994/96 and the 1997/99 Rolling Plans have employment generation as its priority programmes (National Planning Commission, 2000). With the returned to democratic governance in Nigeria, the new administration started development planning in 1999 with the initiation of a four-year medium term plan document, the National Economic Direction (19992003). The plan had the primary object of pursuing a strong, virile and broad- based economy with adequate capacity to absorb externally generated shocks. While being a new plan document, the objectives and policy direction was not significantly different from that to which the country has followed since the introduction of SAP. NEEDS is described as Nigeria’s plan for prosperity. It is a four-year medium term plan for the period 2003 to 2007. NEEDS is a federal government plan, which also expected the states and local governments to have their counterpart plans- the State Economic Empowerment and Development Strategy (SEEDS) and the Local Government Economic Empowerment and Development Strategy (LEEDS) respectively. From the above review of government development planning from 1970 till date, it is obvious that employment creation has featured prominently in all the plans. This underscores the importance attached to employment by successive governments in Nigeria. The impact of these employment promotional schemes on the unemployment levels in Nigeria requires periodic assessment with a view to determining the extent to which plans meet its stated development objectives. Employment promotion programmes in Nigeria Successive Nigerian National Development Planning has stressed the importance of manpower development, utilization, promotion and creation of job opportunities. The policies and programmes that were put in place in some of the previous plans to address areas of manpower lapse are discussed below. Expatriate Quota Allocation Policy (1963). The aim was to ensure that expatriate were only employed in areas with persistent acute shortage of indigenous personnel (Adeyemi, 1996). ITF, CMD and ASCON. The Industrial Training Fund (ITF) Decree No.47 of 1971 made it mandatory for all employers with 25 employees and above to pay a training level of 1% of their annual payrolls to the ITF while employers were to
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be reimbursed up to 60% of the cost of training programmes arranged for their employees on annual basis. The purpose of this was to promote the employment of indigenous manpower through enhanced training programmes. The fund is also a major contributor to the training programmes of the Centre for Management (CMD) which was established by an enabling decree in 1976
. National Directorate of Employment (NDE) was established on November 22nd 1986, an enabling decree – Decree No. 24 of 1989 - gave it legal backing and made it the national agency for tackling unemployment in the country. The overriding objectives of NDE were to give training opportunities to the unemployed, especially the youth, by providing guidance, finance and other support services, to help them create jobs for themselves and for others.
National Poverty Eradication Programme (NAPEP) which commenced operation in 2002. The impact of these programmes and policies on employment generations over the years will be assessed with a view to determining the effectiveness of the policies in addressing unemployment problems in Nigeria.
Achievements of employment promotion and creation schemes in Nigeria Table 1.1 shows the labour force, employment and unemployment from 1970-2008. Nigeria’s labour force has continued to grow in line with the growth in population and natural age-specific transition in the economy. The table indicates a 253.0%, 211.3%, and 6.0% growth of labour force, employment and unemployment rate respectively in Nigeria within the period under review. A quick peep at the table reveals that that gap between labour and employment was about 340, 000 in 1970. In 1985 which coincides with the era of fixed medium term planning, the difference between labour force and employment was about 1, 400, 000 and this marked the beginning of sudden increase in unemployment rate in Nigeria. This situation have being attributed to several factors such as fluctuation in the price of oil in the international market, high population growth rate, poor planning and mismanagement on the part of government among other factors. By the year
1990-1998 which also coincides with the era of Rolling Plan, the difference between labour force and employment was 2, 120, 000 while unemployment has risen to 10.0% from 7.75% in 1990. In the year 2008, the gap has widened to about 8, 440, 000 while unemployment has risen to 13.6%. The wide gap between labour force and employment indicates the level of unemployment in Nigeria. By 1970, the unemployment rate was 1.93% and rose to 4.40% , 7.7% and 13.60% in 1980, 1990 and 2008 respectively. A critical examination of the different eras of development plans will reveal that much progress was made in terms of employment generation during the era of fixed medium term planning in Nigeria. This can be seen from the little gap between labour force and employment within the period. The policies and programmes that were put in place during this era is the expatriate quota allocation policy, ITF, CMD and ASCON. It can therefore be argued that government employment generation programmes did much employment generation in Nigeria within the period. The eras of the rolling plans and the democratic dispensation were the period unemployment became very visible. The labour force grew from 47million of which 87% were employed in 1999, to 54million of which 88.9% were employed in 2005. Aggregate wage employment in industries and businesses increased from about 3.66million in 1999 to about 4.52million in 2005. This indicates that the labour force has witnessed about 33.7% growth since 1980 while the employment recorded 37.5% over the period under investigation. More importantly, unemployment has recorded 30.9% growth within the period under review. With the various employment promotion schemes of government, it is expected that the rate of unemployment will witness a downward trend or at least be stable but this has not being the case. The present high percentage (13.60%) rate of unemployment only indicates that the various employment promotional schemes and other economic policies of government have not done much to addressing the unemployment problems in Nigeria. This finding is greatly supported by Akinoye (2008) who noted that the economic and financial structural reforms put in place in Nigeria have not yielded significant results in terms of employment generation. Figure 1 shows the relationship between labour force and employment in Nigeria from 1970 to 2008.
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Figure 1: Showing Relationship between Labour Force and Employment in Nigeria 140.00 120.00 100.00 80.00 Labour Force (Million)
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Figure 1 shows the trend in the growth of labour force and employment in Nigeria. The figure indicates that the labour force is rising more than the employment that is being generated. The result of this is an increment in the unemployment rate in Nigeria. Figure 2 shows the Figure 2: Trend in Unemployment Rate in Nigeria
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trend in unemployment rate in Nigeria. The figure shows a gradual increase in the trend of unemployment from 1975 and became more noticeable from the early 80’s.
Unemployment rate (%) 16 14 12 10 8 Unemployment rate (%) 6
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In view of the trend of employment generation within the period under review, it is pertinent to appraise the distribution of employment between the two major sectors in Nigeria namely, the formal and the informal
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sector in Nigeria. Table 1 shows the distribution of the formal wage and informal sector employment from the year 1977-2007 in Nigeria .
Table 1:Distribution of Formal Wage and Informal Sector Employment by Year 1977-2007
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Total Wage Informal Employment (Million) (Million) 1977 0.61 0.41 1.02 18.94 1978 0.65 0.40 1.05 19.72 1979 0.69 0.39 1.08 19.86 1980 0.72 0.37 1.09 20.01 1981 0.75 0.35 1.10 20.18 1982 0.89 0.40 1.29 20.36 1983 1.06 0.45 1.51 20.61 1984 1.26 0.51 1.77 20.86 1985 1.49 0.57 2.06 21.11 1986 1.68 0.59 2.27 21.43 1987 1.79 0.61 2.40 21.76 1988 1.90 0.63 2.53 22.09 1989 2.02 0.65 2.67 22.52 1990 2.15 0.67 2.82 22.95 1991 2.21 0.70 2.91 23.39 1992 2.25 1.72 3.97 23.84 1993 2.29 1.80 4.09 24.14 1994 2.33 1.83 4.16 24.74 1995 2.37 1.85 4.22 25.33 1996 2.41 1.87 4.28 25.94 1997 2.45 1.89 4.34 26.53 1998 2.61 1.79 4.40 27.15 1999 2.68 1.77 4.45 30.14 2000 2.66 1.82 4.48 33.46 2001 2.73 1.39 4.12 37.14 2002 2.87 1.46 4.33 40.47 2003 2.99 1.55 4.54 42.26 2004 3.06 1.64 4.70 43.11 2005 2.86 1.82 4.68 44.42 2006 2.52 2.12 4.64 45.64 2007 2.51 2.18 4.69 46.81 Source: Human Resource Development & Utilization Department, HRDUD (NISER) Year
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Figure 3: Distribution of Public and Private Sector Employment in Nigeria 3.5 3 2.5 2 Public Sector (Million)
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Figure 3 shows that the public sector has dominated the employment sector within the period under review. This situation may be attributed to the philosophy of National Development Plans which were public sector oriented up till the early 1980s. This condition may have contributed to the emasculation of the private sector in Nigeria in terms of employment generation. Figure 3 also shows the distribution of employment between the formal and informal sector in Nigeria from 1977 to 2007.
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Figure 4: Distribution of Employment between the Formal and Informal Sector in Nigeria 50 45 40 35 30 25
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Figure 4 also shows that the informal sector has dominated employment generation in Nigeria within the period under review. Ademu (2006) defines the informal sector as comprising those employment generating activities of some urban residents, undertaken for survival in the absence of formal employment. These activities are characterized by the lack of regulations by institutions of society in a social and legal environment in which similar activities are regulated. Common features of operators in the informal sector include: • Easier access to production factors which are derivable from social organisation of family and friends. • Involves entrepreneurs in virtually all branches of the economy ranging from productive activities general services and specialized services. • Technology is determined more by the constraints of the social relations. • Motivation for production by the operators in the informal sector is becoming more profit oriented (Ademu, 2006). A review of the industrial development of different countries have shown that the informal sector constitutes an integral part in the overall industrial sector employment and play an active role in the growth
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and development of these countries. These enterprises contribute significantly to the employment generation and output growth of different developed and developing countries .This scenario is not different in Nigeria as this sub-sector account for about 70% of the total industrial employment in Nigeria (Akintoye, 2008). A cursory look at the various employment promotion schemes enunciated during the Rolling Plan era will quickly reveal that only few of the policies are still very active in pursuing the purpose for which they were created. The dominant ones are the National Directorate of Employment (NDE) and the National Poverty Eradication Programme (NAPEP). From Table 1.1 above, a total of 11, 473, 70, 000 have been generated in all the sectors from 1970 to 2008. This represents an average of 40, 977, 500 jobs per annum within the period under review. While this is a modest achievement considering the fact the 2008 data on labour force puts the figure at about 62 million, it is pertinent to note that not much job opportunities have been created by the employment promotion schemes of government. Data available shows that the NDE generated a total of 1, 898, 638 jobs between 1987-1996 (Table 2)
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Table. 2: Distribution of NDE Programme Beneficiaries (1987-1996) S/N Programme/Scheme Year Launched Number of Beneficiaries Vocational Skill Development Programme 1 National Open Apprenticeship Scheme 1987 555, 575 2 School on Wheels Programme 1990 19, 672 3 Waste-to-Wealth Programme 1987 8047 4 Resettlement Scheme 1991 6024 Small Scale Enterprises Programme 1 Entrepreneurship Development Programme 1987 574, 000 2 Graduate Job Creation Scheme 1987 2507 3 Mature People Scheme 1987 133 4 Motor Cycle Transportation Scheme 1994 450 Rural Employment Promotion Programme 1 Graduate Farmers’ Scheme 1987 11, 335 2 School Leavers’ Farming Scheme 1989 13, 220 3 Crop Processing Scheme 1996 611 4 Dry Season Irrigation Farming Scheme 1995/1996 930 Special Public Works Programme 1 Graduates and School Leavers 1987 149, 081 2 National Sanitation Employment Scheme 1994 478 Special Programmes 1 One Million Jobs Creation Programme 1992 547, 374 2 Mass Agricultural Programme 1993 8000 3 Job Placement and Vocational Guidance 1993 1, 200 Total 1, 898, 638 Source: NDE 1987-1996 Table 2 shows that a total of 1, 898, 638 jobs were massive unemployment, underemployment and extreme created between 1987 and 1996 through the various poverty which NEEDS was meant to drastically reduce; programmes within the period under review amounting the failure to create more jobs has been its albatross to an average of 189, 863 jobs per annum. This is quite (Nigerian Vision 20-20 Program, 2009). small considering the rate of growth of labour force in Nigeria. Ogundele (1996) noted that the NMB has made Challenges significant achievements especially in the establishment The general failure to make substantial positive impact of human development parastatals like the Centre for in the massive employment crises facing Nigeria in the Management Development (CMD), Administrative last two decades represents a major challenge to this Staff College of Nigeria (ASCON), Industrial Training employment promotion programmes in Nigeria. This Fund (ITF) and the National Directorate of Employment failure on the part of this programmes have been (NDE). However, this has not translated to much attributed, amongst others to the application of flawed employment generation for the teeming unemployed in policy regimes; collapse of investment ratio and Nigeria. Although, there is no data on the total financial intermediation; failure of infrastructural employment generated by NAPEP since 2002, it is also policies; deficient governance structure and obvious that not much has been achieved in terms of job mismanagement, poor projects/policy design; problems creation since the unemployment rate in Nigeria is on of the education sector, inadequate mainstreaming of the increase. On the part of NEEDS, it has succeeded in employment issues in guiding policy instruments like redefining the role of government as an enabler, NEEDS (National Economic Empowerment and facilitator and regulator, thus, shrinking the domain of Development Strategy) and the poor implementation, the state without making it any less potent in the monitoring and evaluation of projects and annual development process. However, half a decade after its budgets (Nigerian Vision 20-20 Program, 2009). In adoption, this laudable strategy could be said to be addition, the policies have focused on skill development highly impactful, except in one key area, employment and micro credit delivery for self- employment given generation. It is paradoxical to concede, that although the importance of the informal sector in most African appreciable economic growth was achieved in the countries. Less attention has been paid to policies and course of implementing the strategies outlined in programmes to enhance the capacity of the private NEEDS, this positive development was not sector to generate more employment opportunities in accompanied by employment generation which was one Nigeria. Many people are yet to be aware of the of its cardinal objectives. Against the background of existence of this special programme such as the NDE in
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rural especially in rural areas in Nigeria. In addition, very limited funds have been provided for this programme thereby hindering their smooth operations. The continuous dependence on oil revenue as a major source of revenue also presents a major challenge to implementation of development programmes. The international oil market is not stable and therefore any planning made based on the price of oil in the international market is subject to distortions both internally and externally. The rapid population growth rate of the country also presents another major challenge. This has contributed immensely to rapid growth of the labour force in Nigeria. The corollary of this is that the rate of growth of labour force is higher than that of employment generation and this has impacted on the rate of growth of unemployment in Nigeria.
Conclusion The main policy lesson to be gleaned from the foregoing discussion is the fact that the worsening incidence of unemployment scenario in Nigeria cannot be entirely attributed to policy failures and ineffectiveness of the employment oriented programmes that were mainstreamed in the successive development plans but to the generality of the entire development plans. Generally, the employment generating capacity of the Nigeria economy has been weak since the end of the oil boom in 1981 and the economic recession of 19811985. The adoption of the Structural Adjustment Programme (1986-1988) was intended to have a positive impact on employment generation in Nigeria but the reverse was the case. What is of fundamental importance at the moment is the adoption of sound monetary and fiscal policy measures and political will that will engender employment generation in Nigeria.
Prospect References There are quite a large number of prospects for employment generation in Nigeria. The country is endowed with abundant resources. What is of fundamental importance is policy alignment and the political will among policy makers in Nigeria. The informal sector in Nigeria presents a good opportunity for employment generation in Nigeria. Policies for employment generation should all embracing and should include all stakeholders governments, employers and employee associations, the private sector, civil society organizations, and the international community. Credit facilities should be provided at the community level, and this would solve the problem of collaterals, and facilitate the informal sector economic activities, promote entrepreneurship and reduce pressure on government to provide jobs. The NYSC program should be re-designed to take corps members through specialized training, for immediate job placement after the service year. Nigeria as a country is blessed with abundant natural resources in different regions of the country. The continuous emphasis on crude oil as major source of revenue should be de-emphasised. Government should diversify the economy with a view to developing alternatives sources of revenue to the government. The large labour force in Nigeria presents a big opportunity for development. Government should provide an enabling environment for growth of both the private and the informal sector in Nigeria. For example, loans are inaccessible to SMEs. There is a compelling need to solve the problems of inaccessibility of loans for small scale businesses and informal sector economic operators by government. This will promote employment generation for the teeming youths and therefore contribute to overall development in Nigeria.
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