Finance

World Bank warns Nigeria against sustained under-investment in human capital

FILE PHOTO - A participant stands near a logo of World Bank at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS-Johannes P. Christo

The World Bank has cautioned that the continued under-investment in human capital may hinder Nigeria from harnessing the economic potential of its young population.

It also stated that two economic crises in close succession – the 2016 oil price slump and the COVID-19 pandemic – had diminished Nigeria’s human capital stock, notably through declines in educational attainment.

In a new report titled: “Good Jobs for a New Generation: Delivering Quality Jobs for Young Nigerians after COVID-19,” which was unveiled during a virtual interactive session with journalists yesterday, the World Bank assessed how much the COVID -19 pandemic affected jobs in Nigeria, and how the country could deliver quality jobs for its young population following the devastating effect of the pandemic.

There were a number of key messages contained in the report presented by some officials of the bank’s country office in Nigeria, including Jonathan Lain and Tara Vishwanath.

According to the report, the COVID-19 crisis has underscored weaknesses in Nigeria’s labour market, noting, however, that the country could leverage the crisis to protect human capital and foster good jobs for its young population.

It observed that before COVID-19, Nigeria’s youth already faced a daunting jobs challenge, adding that even without the pandemic, about 30.8 million Nigerian youth aged 15-29 (about 54.3 per cent of the 56.7 million people in that age group) were projected to have entered the labour market.

It stated: “Widespread informality and precarity in Nigeria’s labour market had not improved in the decade before COVID-19. From 2010 to 2019, the share of working-age Nigerians with jobs in household agriculture increased from 25.6 to 35.9 per cent. Precarious jobs offer less reliable paths out of poverty.

“To inform a new generation of labour-market policies, these brief marshals evidence on how Nigeria’s youth have responded to two recent economic shocks: the 2016 oil-price recession and the ongoing COVID-19 crisis.

“Youth responded to both crises by leaving school earlier to enter the labour market, thus increasing overall labour supply. Rising labour supply amid chronic job shortages have further widened precarity and informality in Nigeria’s labour market.”

The report posited that compared to the 2016 oil-price recession, COVID-19 negative labour-market effects was more concentrated among women and the poor.

It listed three directions for policy action to deliver good jobs and prepare young Nigerians to fill them.

These include investment in human capital; boosting job creation; and helping enterprises grow.

It also noted that reversing education losses from COVID-19, particularly among girls, was a top priority.

Options proffered to address these included adding more hours to the school day, repeating the missed school period, and delivering lessons during school holidays.

The World Bank also stated that monitoring of education results is vital to ensure that losses are recouped.

According to the report, priorities to support job creation included promoting economic diversification away from oil and redirecting public spending towards productivity-enhancing infrastructure and pro-poor social protection.

“Policies that loosen enterprise credit constraints and develop infrastructure can boost enterprise productivity, profits, and job creation.

“For example, cash grants administered through a national business competition have shown large positive effects on enterprise survival, profitability, and hiring.

“Nigeria’s young population embodies the nation’s promise. Ensuring good jobs for youth will enable the country to seize its demographic dividend. This is vital to drive future inclusive growth and poverty reduction,’ it said.

Meanwhile, World Bank President, David Malpass, has disclosed that the bank now has 250 million doses of COVID-19 vaccines under contract with bank financing.

He revealed that the deliveries would be going on in the coming months, as a very critical move in saving lives.

Speaking yesterday during a media briefing at the ongoing 2021 annual meetings of the World Bank/International Monetary Fund in Washington, Malpass also said the bank was working throughout Africa on the climate agenda alongside the development agenda, recognising that in order to be fully engaged, countries are going to need to see development as part of their outlook.

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