Members of the organised private sector have stated that harsh economic policies from the government have exacerbated country’s unemployment rate.
In separate chat with The PUNCH, they warned that if the poor economic policies are not quickly addressed, more businesses would fold up and it would worsen the country’s unemployment.
The President of the Nigeria Employers’ Consultative Association, Adewale-Smatt Oyerinde, warned that the repercussions of inadequate economic policies and a hostile business climate would compel numerous businesses to cut their workforce to mitigate costs.
He recommended that the government implement optimal measures to enhance the business environment and bolster production within the private sector.
“Since the beginning of 2023, the government has been instituting policies unfavourable to the operations of the private sector, which happens to be the largest source of employment in the country,” Oyerinde said.
According to the National Bureau of Statistics in its Labour Force Survey, in the third quarter of 2023, the country’s unemployment rate rose to five per cent from 4.2 per cent in the preceding quarter.
The labour force participation rate, which gauges the proportion of the working-age populace actively involved in the labour market, declined to 79.5 per cent in Q3 from 80.4 per cent in Q2.
According to the National Bureau of Statistics’ updated methodology, Nigeria, home to over 200 million people, experienced a decrease in unemployment from 5.3 per cent in Q4 2022 to 4.1 per cent in Q1 2023.
The NECA boss asserted that several policies were impeding businesses, including the elimination of fuel subsidies, the adoption of a floating foreign exchange rate, the currency redesign initiative by the Central Bank of Nigeria, the imposition of multiple taxes and heightened excise duties on imported goods.
According to Oyerinde, other government policies that have been affecting businesses are the upward adjustment of foreign exchange rates for import clearance by the Nigeria Customs Service, and the recent prohibition of alcoholic beverages in sachets and PET bottles smaller than 200ml.
Recently, the Manufacturers Association of Nigeria said the ban on the sale of alcoholic drinks by the National Agency for Food and Drug Administration will cost the Nigerian economy 500,000 jobs.
The Director-General of MAN, Segun Ajayi-Kadir, said the body was concerned about the recent ban imposed on spirit drinks in sachets and PET bottles less than 200ml.
Also, the Distillers and Blenders Association of Nigeria warned that implementing the ban was going to damage local manufacturing and negatively affect the economy, as well as the social well-being of the people of Nigeria.
According to the latest Manufacturers CEOs Confidence Index report, Manufacturers’ employment rate would dip to 48.8 points in the first quarter of 2024.
The new figure represents a downward spiral from the 49.2 points obtained in the preceding quarter.
Also, the Deputy General Secretary of the Nigerian Union of Banks, Insurance, and Finance Institution Employees, Shola Aboderin, stated that the banks’ dependence on energy to power their branches had shot up their operating costs.
He noted that the removal of fuel subsidies had led to a drastic increase in fuel prices and adversely affected the banking sector and other sectors.
“The repercussions of this policy shift were evident as many banks struggle to sustain unprofitable branches, resulting in closures and substantial job losses among thousands of workers,” he said.
Aboderin urged the government to devise more favourable economic strategies, including reducing multiple taxes and addressing power challenges, to foster a conducive environment for businesses to thrive and mitigate the escalating unemployment rates.
He emphasised that implementing the right policies could yield substantial positive outcomes for the economy.
