Job Creation as the Best Yardstick

One crucial way of assessing government is through job creation and this must not be lost on the masses, writes Magnus Onyibe

A couple of years ago, the Nigerian economy was growing at between 6 and 7 per cent GDP rate. This was probably due to the fact that crude oil/gas, Nigeria’s main export earner, attracting 90 per cent of foreign exchange, FX income and which constitutes about 11 per cent of her GDP, was trading at over $100 per barrel.

The most probable reason is that the oil boom and Nigeria’s forex reserve, which at one point was estimated at about $60 billion attracted international portfolio and equity investors, who came in droves to buy Nigerian bonds which had a mouth-watering yield of about 12 per cent – an impossibility in the industrialised world.

By their very nature, portfolio investors are exactly what their name indicates – mere portfolio/briefcase carrying businessmen trading in papers and other intangible financial instruments as opposed to entrepreneur investors, who bring in machines and other equipment used for factory production of goods and in the process, create employment for Nigerians.
Obviously, for many years, Nigeria had very few entrepreneurs as foreign direct investors (FDI) in the real economy, but attracted hordes of portfolio/equity funds managers, who take flight with their investments at the slightest suspicion of instability like oil price volatility or conflicts in the polity arising from political differences leading to tension.
Nigeria also quickly booked a spot in the popular JP Morgan price index, owing to the excellent return on investments in bonds as opposed to manufacturing, the economy was thus adjudged to be growing at attractive GDP levels of 6 to 7 per cent earlier mentioned.

Unfortunately, it was only on paper that the growth was being recorded as new factories were really not being set up as such neither were more people being gainfully employed, which is really what governance political leadership and progress in a society are about.

In that period, international trade was flourishing so well that trading in treasury bills/bonds and other financial instruments was the trend, and importation of goods rather than manufacturing; gaming the system via fake fuel subsidy invoices and crooked crude oil for refined products swaps schemes, as opposed to refining the 450,000 barrels of crude oil allocated for local refining, gained traction and thus became the new business paradigm, rather than the exception in Nigeria.

As the so called GDP growth was exclusive to the rich, the Nigerian masses were groaning in poverty owing to the socio-economic hardship foisted on them by fake economic growth that had no local dynamics or bearing because it was not people centric and thus failed to make any positive impact on the lives of the ordinary folks.

As a result of the implementation of the aforementioned polices that were not oriented towards alleviating poverty through employment generation, factories closed down – 185 textile mills in Kaduna State and environ (according to minister of state for industry, Aisha Abubakar) plus tyre and battery manufacturing plants that were located in Lagos, Sango Ota and surrounding areas. In fact, some of them, especially tyre manufacturers like Michelin, migrated to neighbouring countries like Ghana, where fiscal policies and infrastructure are conducive.

Associated with factory closures is the loss of jobs and the current unemployment crisis (about 12%) besetting our country is a legacy of anti-job creation policies of previous administrations. As President Muhammadu Buhari mentioned in China during his current visit, the existing huge trade imbalance between Nigeria and the world’s 2nd largest economy, China has to be bridged and that can only be done if and when Nigerian business men and women start partnering their Chinese counterparts to produce locally, the items that we are currently importing.

A critical facilitator or ingredient for such business relationship to blossom is stable supply of electricity and other infrastructure that enhance manufacturing such as transportation facilities like improved road networks, more modern railway lines and efficient sea and air ports to enhance distribution of goods.

The present situation, whereby the only business model is importation of Chinese finished products into Nigeria and export of our crude oil to China, does not augur well as it is antithetical to the erstwhile import substitution policy of Nigeria, which President Buhari has vowed to pursue more vigorously.

Hopefully, apart from funds, one of the things that the president and his team currently visiting China, would seek to borrow from the Chinese, is how they dealt with the inadequate power and energy challenges that initially hobbled her economic growth but was resolved and thereafter enabled China achieve the ‘Great Leap’ that propelled her into the prime position of being the foremost factory to the world.

The construction of a dam over the famous guangtze river (the 3 gorges dam) that stretches across four hundred miles and was responsible for most of the monsoons that led to loss of millions of lives, helped China achieve energy sufficiency, and therefore a good candidate for emulation by Nigeria as we benchmark that country for progress.

With the unprecedented N1.8 trillion allocated to capital projects in budget 2016, Nigeria can be transformed into a major construction site, especially if the $6 billion loan that is being vaunted as a promise from China for investment in infrastructure becomes reality.

From harnessing electricity through solar power and wind mill factories to be sited in the desserts adjacent to Katsina and Kano states, to converting the hydro resources abundant in mambilla plateau in Taraba state, into a dams for generation of electricity power like the existing ones in Shiroro and Kainji area of Niger State.

And by also taking advantage of the gas fields preponderant in the Niger Delta, coupled with leveraging the huge coal deposits in Enugu State and environ for utility as coal mines, Nigeria would be able to power factories in partnership with Chinese investors for manufacturing of goods to satisfy our local consumption needs and perhaps with enough to export to neighboring countries.

Given the scenario above, it now behooves each of the 36 governors and 774 local government chairman nationwide to woo and lure entrepreneurs to their domains by making them more investor-friendly through provision of enabling environment like roads and electricity infrastructure, as well as incentives like tax holidays and private public partnership (PPP) arrangements.

So, going forward, instead of focusing on the size of the budget set aside for a project, and the value of the contracts awarded in terms of the quantum of funds to be disbursed as contract sum, let’s start judging our governments both at the federal, state and local government levels by the number of jobs created through their development initiatives to determine their impact in their domain.

Currently, growth and progress in our economy are measured by the gross domestic product (GDP), which is a sophisticated barometer of the sum total of volume and value of economic activities carried out in a specific period in a community or country. Experience in Africa, particularly in sub-Sahara Africa, has shown that the method is kind of warped, as it mainly captures the fortune of the top 1 per cent super rich and hardly reflects the misfortune of the 99 per cent long suffering working and jobless masses in the middle or lower rung of the ladder.

During a recent debate on whether or not GDP is an optimal development indicator in Africa, following the palpable poverty manifesting on the streets in Africa, from Kano to Kigali, despite impressive GDP growth in Africa, it was reported that, that the immediate past Africa Development Bank (AfDB) president, Francis Kaberuka, amongst others bureaucrats noted that GDP may not be a proper gauge. I would like to stretch that thought process further by adding that GDP is probably a deceptive measure of the state of the economy in Africa, as it does not directly or immediately reveal the number of people in the society that have roofs over their heads and food on their tables.

By applying a new rule, such as the number of people in employment as a yard stick for measuring progress and development in Nigeria, the true state of affairs can really be determined because every employed person is more likely to afford to rent or own a home and would also be able to have the proverbial three, 3 ‘square’ meals a day.

Another yardstick Nigeria could adopt for gauging progress in our society should be inflation rate. This reflects the hunger or poverty rate in the society because it is a direct measure of the cost of food, housing, transportation, health care and other essential utilities in the society. Following the current dislocations in the economy of Nigeria, inflation is about 10.8 per cent, according to the latest figures from the national bureau of statistics (NBS).

To get a clearer picture of how bad such inflation rate is, compare it to UK’s rate, which is a mere 0.5 per cent. Clearly, from the foregoing scenarios, unemployment and inflation rates in a society would serve as better, more practical and realistic prognosis than the sophisticated GDP tool applied in the industrialised Western economies.

This is why it is very important to make a strong case for a paradigm shift to using jobs creation to assess the impact of our elected political office holders particularly for those in the executive arm of government.

No longer would ministers and commissioners at the federal and state levels respectively, after the weekly or monthly federal or state executive council meetings, merely announce the value of the contracts awarded in terms of money to be expended.

Henceforth, emphasis should be on the number of jobs to be created and the impact of the projects on the people in the community in particular or society at large. That is the change Nigerians voted for and the least they expect now. While I was researching this article, I came across a similar policy being applied by one of the states in the Niger Delta.
In Delta State for instance, the governor, Ifeanyi Okowa, upon assumption of office embarked on implementing his campaign promise, tagged STEP – acronyms for Skills Training Entrepreneurship Programme, which is a subset of his major campaign mantra – SMART.

In 2015, 1070 trainees consisting of 664 males and 406 females were admitted into 116 training centres across the state, where skills as sophisticated as computer hardware repairs to practical ones like hairdressing, tailoring, cosmetology, events management and blocks and interlocking stones moulding were taught. Another 540 graduated yesterday (18/4/16) with starter packs issued to enable them commence business and possibly employ others.

The number of people so far trained may not appear like much but those are just the first and second circles and I’m told more of the entrepreneurship empowerment programmes are scheduled to follow quarterly.

The beauty of the SMART/ STEP agenda is that it is the overarching Key Performance Indicator (KPI) for the state government. In other words the government wants to be judged by the number of jobs created, not just by the number of infrastructure like roads, schools and health care institutions.

On a closer look at the state economy, where the wage bill is about 2 billion naira more than her monthly allocation from federation account, it becomes clearer why the governor had no choice than to make jobs creation through private enterprise his cardinal objective in governance. It is only by creating private sector employment opportunities through entrepreneurship, that the burden on government can be eased.

Back in the days, Asaba textile mill, Asaba African Timber and Plywood, AT&P, Sapele; Delta Steel Rolling mill, Aladja and Superbru in Agbaro, all in Delta State provided alternative jobs to government, but with all the above listed firms now moribund, government became the only source of employment, hence it is currently over-burdened.

Accordingly, the KPI is designed to capture jobs that are created directly and indirectly through the SMART and STEP programmes as well as from other employment generating ministries, departments and Agencies, MDAs. It needs no emphasis that what’s happening in Delta State applies to practically all the states in Nigeria hence they recently became insolvent, with a back log of workers’ salaries sometimes in excess of six months, owed. This necessitated the recent federal government bail out of state governments.

For Nigerian economy that is recording over 12 per cent unemployment and 14 per cent underemployment rate, according to NBS’ current data, making employment a KPI for government is a very remarkable and noble effort by Ifeanyi Okowa, the medical doctor turned politician.

I particularly like the philosophy underpinning the SMART and STEP initiatives which are focused on jobs creation and therefore recommend them to other states and the federal because that is an innovative way to alleviate poverty since an employed person would almost certainly have a roof over his or her head just as he or she would not go to be in an empty stomach.

Going by President Buhari’s campaign promise to create 500,000 jobs for unemployed graduates, he is also a job creation enthusiast. Although his jobs promise is yet to be kept, I would like to believe that it is in the pipeline. I’m optimistic because it is consistent with his emotional attachment to the Nigerian masses for whom he is shying away from deregulating the petroleum sector, ostensibly owing to the fact that he does not want to see the long suffering Nigerians on the street to suffer more hardships on account of increase in the price of petroleum products.

For his commitment to the cause of the common man, whose destiny he vowed to change from poverty to better quality of life, when he was seeking their mandate, if I were the president, I would as a matter of urgency change the nomenclature of the ministry of Labour and Poverty to the ministry of Employment and Productivity to reflect more appropriately the key focus of his administration, which is believed to be people-centric.

Perhaps, I should point out at this juncture that Nigeria would not be alone if she jettisons the use of GDP, a western tool for measuring progress and development in a specific period of a particular community.

In the Himalayan kingdom of Bhutan in East Asia, the KPI for development is not GDP, neither is it employment or inflation rating, but quality of life which is determined by Gross National Happiness (GNH) which is a measure of the level of happiness in the society.

The rulers of the kingdom justify their unique policy by stating that it enables them maintain their values and principles by striking a balance between material things and well-being and this is why the people on the island are mostly happy.
Whereas it may not be feasible to go to the extreme of using happiness to measure progress in Nigeria as is done in Bhutan, which is a rural country with a tiny population of 750,000, living in an area of about 15000 sqmt, if we really want to embrace change, holding up the amount of jobs created and tracking the level of inflation in our society as our barometer and yardstick for socio-economic development in Nigeria, would be the real game changer.

-Onyibe, a development strategist and former commissioner in Delta State is an alumnus of the Fletcher School of Law and Diplomacy, Massachusetts, USA

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Going forward, instead of focusing on the size of the budget set aside for a project, and the value of the contracts awarded in terms of the quantum of funds to be disbursed as contract sum, let’s start judging our governments both at the federal, state and local government levels by the number of jobs created through their development initiatives to determine their impact in their domain