x

The UN defines poverty as a fundamental denial of choices, opportunities and a basic lack of capacity to participate effectively in society. Those that are impoverished are not there by choice, nor are they there for lack of ambition. In places like Nigeria, the opportunities to find meaningful jobs that lead to long term careers are few and far between.

The problem

 Nigeria is one of Africa’s largest and fastest growing economies but is still among the poorest countries in the world. At present it is estimated by the United Nations Development Project that 62.6% of Nigerian’s, around 112 million people, are living in poverty.[1] This problem is not limited to Nigeria, it is repeated in countries across Africa and the rest of the developing world.

Traditional approaches to developmental aid in emerging economies have focused on one sided “force feeding” of internationally determined, procured and delivered “aid”. Modern approaches have been far more successful as they focus on joint development at the local level, lobbying international institutions to stop under cutting African markets and implementing solutions lead by the indigenous people themselves. This sustainable development approach, as well as economic growth and development on the ground, is leading to increasing life expectancies and child survival rates across the continent. This in turn will soon lead to a period of significant demographic dividend, i.e. a bulge in percentage of the population which is of working age in Africa. Similar demographic dividends in the USA in the last century lead to substantial economic growth, the same could happen in Africa if we tackle the root causes of poverty now.

Additionally, according to the UN and World Bank, Nigeria will become the third most populous country in the world by 2050 with almost 400 million people, surpassing the United States, Russia, and Mexico. In fact, African countries will account for 3 of the top 10 most populous countries in the world by 2050. [2]

Unemployment, education and opportunity

 Nigeria’s official unemployment rate is around 14%, but youth unemployment is nearer 25% and rising. According to data by Trading Economics, youth unemployment in Nigeria has risen from an all-time low of 11.7% in 2014 to its current levels.[3]

This is not due to a lack of education; in fact access to education in Nigeria is higher than average and Nigerians value education very highly. It’s estimated that tertiary education institutions are producing up to 500,000 graduates every year.[4]  However, given the large number of Nigerian’s earning degrees, there is a mismatch between the number of graduates and the number of jobs available. In addition, the tertiary courses need to be modernized, education still tends to be too theoretically based.  Due to the lack of jobs there are not enough practical opportunities in the work place for students to undertake during their education. In short we have a large work force of intelligent, qualified, but inappropriately skilled workers. The upside being that this is also a population that is easily trainable since they are literate, English speakers.

The role of the private sector

 Sustainable development of the economies of low income, high growth countries like Nigeria is the key to combatting poverty on a global scale. The skills gap outlined above must be addressed and that is only possible through the creation of jobs by the local private sector.

The Sustainable Development Goals (SDGs), the 17 goals and 169 targets highlighted by the UN to be achieved by 2030, provide a roadmap for governments, businesses and individuals to a more inclusive and economically stable world. Although these are largely social goals, the Business and Sustainable Development Commission (BSDC) has compiled a detailed analysis of the business case for the SDGs which found that sustainable business activity could be worth $12 trillion by 2030. The outcome of its research is that companies which do not focus on inclusive business models are unlikely to survive the next two decades, whereas those that do will share in creating a trillion-dollar market while providing opportunity for millions to lift themselves from poverty.

The report highlights the opportunities available for investment, optimization, and revenue growth while encouraging companies to pursue them aggressively. By committing long-term investment to high growth markets such as Nigeria, establishing local private sector partnerships and creating mutually beneficial contracts, multinationals can realise higher profits while stimulating growth where it is needed most.

At LADOL we are trying to provide a tangible example of how the private sector can work with local operators to reduce costs in the medium term and encourage sustainable growth in the long term. Projects such as the Egina FPSO integration at the free zone are creating opportunities for the indigenous workforce and pumping capital back into the local private sector. Additionally, to address the aforementioned skills gap, the LADOL Upskilling Academy will provide a lifelong learning platform for Nigerians. This venture will be supported by private companies and non-governmental groups who will be able to set-up their own schools within the academy, ensuring well trained loyal employees for the future. In this way LADOL is a blueprint for what is possible in Africa.

The next chapter

 While countries like Nigeria still require a lot of work, the potential for local and international business is clear. The speed at which companies now embrace sustainable business models and engage with local private sector in high growth, low income countries will directly influence the time it takes to alleviate widespread poverty. Now is the time for companies to take the first mover advantage and ensure that they are at the forefront of a $12 trillion economy that could also save the world.

 

 

[1] http://www.ng.undp.org/content/nigeria/en/home/countryinfo/

[2] https://blogs.worldbank.org/opendata/future-world-s-population-4-charts; http://www.un.org/en/development/desa/news/population/2015-report.html

[3] http://www.tradingeconomics.com/nigeria/youth-unemployment-rate

[4] https://qz.com/603967/about-half-of-the-university-graduates-in-nigeria-cannot-find-jobs/

Amy Jadesimi
Amy Jadesimi
Dr Amy Jadesimi is the Managing Director and CEO of LADOL, a free zone and multi-logistics services base in Nigeria. Beyond LADOL, Amy is on the Prince’s Trust International global advisory board, a founding commissioner of the Business and...

Leave a Reply