Nigerian economy: slogans, jobs and fancy statistics

Central to the All Progressives Congress (APC) appeal is the promise to create jobs so as to usher in a more prosperous, and more inclusive, society. Jobs earn incomes with which individuals, families and communities can provide food, shelter, education and healthcare for themselves. One hears slogans like “going back to agriculture”, “developing the mining […]

Central to the All Progressives Congress (APC) appeal is the promise to create jobs so as to usher in a more prosperous, and more inclusive, society. Jobs earn incomes with which individuals, families and communities can provide food, shelter, education and healthcare for themselves. One hears slogans like “going back to agriculture”, “developing the mining sector”, and “reviving manufacturing.” These are all well and good but the real question is how do we go about any, or all of these? Undoubtedly, the modalities are being worked out but let me put in a few words of caution to aid policy evaluation before we get mired in our own slogans.
Take jobs as example. Jobs are easy to create. Sustaining them is quite a different matter because you have to pay for them. In addition, they have to be capable of paying enough to sustain the worker (and the family) into a viable future. Let us look at the case of agriculture. While it may be true that most of our people are currently engaged in farming, animal husbandry, and fishing, it is wrong to assume that focusing finance and other resources on these necessarily leads to greater employment or rising rural incomes. In the short run, and if it is well planned, yes, that is possible. But modern (commercial) agriculture tends to actually REDUCE rather than increase labour, in favour of more machinery and chemical inputs.
With machines, more could be produced with less (even though more skilled) human labour. Still we may then come up against another paradox: larger output could saturate the market, putting downward pressures on prices. This applies within a nation and also when two or more nations simultaneously increase the production of a particular export crop. Economists refer to this as the Fallacy of Composition. One or a few farmers could earn more by increasing production. Yet when all do so at the same time, in respect of the same crop, the result could lead to price collapse. Higher production simply saturates a global market that is unwilling to take up more.
This is why I am always amused with the massive purchase of tractors and implements by state governments, as if that is all that is required to move agriculture (along with farm incomes and jobs) forward. Better extension services, improved seeds, adequate and appropriate fertilizer and chemicals, proper evacuation, post-harvest treatment and storage, and links to industries that require the produce would all have to be synchronised and improved upon for us to boost farming, for example. Some big farmers should be encouraged but moving an agrarian system into commercial agriculture is not as simple as getting the prices right, important as that may be. Without exploiting the value-chain, and without the industries to absorb the additional output, bumper harvests could lead to disasters, rotten produce and a dispirited peasantry.
Mining is another area people often talk about as a means of creating sustainable jobs. This is also possible, up to a point. Right now our minerals remain unexploited, and some even unexplored. South African mines, for example, are exhausted and you have to dig deeper and deeper to find the minerals. In our case, some of the resources are virtually on the surface, with a few adventurous souls getting rich with shovels and pans.  Commonsense says ‘encourage them’. However, our laws need to be reformed, mining regulations streamlined and finances found. The same caveat applies here as well; we must seek to develop higher up the value-chain if we are not to end up exporters of cheap raw materials, and importers of costly manufactured goods, and reducing ourselves to providers of cheap labour.
So we are back to industry, the backbone of all modern, highly developed nations. With our large population we cannot rely on trade and services only. Nigeria must build modern industries that would make use of our agricultural and mineral resources to produce what we need internally and even export to the world, and benefit from the additional processing. Without a manufacturing base, agriculture and mining simply leave us dependent on other people’s demand for raw materials, at increasingly cheaper prices while we hope for oil windfalls to enable us import what manufactured goods we need. Central to this industrial revolution is electricity, which we must emphasise. Crucial also is a well-developed iron and steel, chemicals, cement and other basic industries.
Not just any industry; but those that produce commodities that have increasing returns, technological change, and synergy and cluster effects. The APC governments and the new National Assembly must take these as their priorities, along with building a truly educated and healthy work force if we are to emerge from the doldrums. Then the sustainable jobs can be created to ensure our welfare, security and development.
Construction could employ more if pressure is brought to bear on the large construction firms, or if public works and cheap housing are prioritised. Transportation, especially railways, not only facilitates agriculture and industry, but could also employ millions. An industrial blueprint already exists, and it could be our starting point, with appropriate modifications.
But then we may not have to do much, as the Peoples Democratic Party (PDP) has already created enough jobs, if we are to believe our statisticians, since…
… GEJ and Ngozi have reduced unemployment to 6.4 percent?
No, I am not joking. This really is official. Basking in the euphoria that accompanied the rebasing exercise, the National Bureau of Statistics, sometimes last year, set up a committee of “experts” made up of “international non-governmental organisations, Nigeria Labour Congress, media, members of the academia who are knowledgeable on labour issues, amongst others” to review the existing methodology of calculating unemployment and propose a “more suitable” definition for the Nigerian environment.
The Committee has finished its job and the Bureau has now recalculated the number of people without work to be just 6.4% of the total work force of 72 million, down from 28% which it considered unacceptably too high. The revised methodology for computing unemployment statistics reduced Nigeria’s official work hour benchmark from 40 to 20 hours a week. Even if you only try to sell pure water for one to two hours a day, and despite the likelihood that particular “job” won’t fetch you enough to fill your stomach, the NBS considers you “employed”. End of discussion. So, now, with its 10.6 percent, France has a higher percentage of unemployed people than Nigeria, and the United States and United Kingdom (with 5.5 percent each) barely managed to beat us. Perhaps GEJ should fire the lazy lots for not coming up with this “miracle” in time for the elections! Up Naija!