2015 will probably be the year of the unemployed in Nigeria

Unemployment must surely be on the mind of the President and his financial team, else why should it take a year before the bereaved families of the Nigerian Immigration service (NIS) tragedy be compensated?

Confronted with three daring devils that are ready to strangulate its economy: low oil prices, conflict in the North Eastern part of the country and forthcoming elections that have already been once postponed, many Nigerians wonder if there is trouble lurking in the wings?

Unemployed adults looking for work.

Credit: flickr.com

Surely, Nigeria is not going to record the glowing productivity growth of 2014. She might possibly encounter a steep fall in production and exports. Income from oil has already fallen as reflected in the budget for 2015. The reported “pro-common man focus…” as expressed by the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, is for the sake of the Goodluck Jonathan’s election campaign. The government and those before it have not expressed a deep founded “pro-common man focus!” Boko Haram has made the North Eastern part of the country non-viable economically, if not politically and educationally.

The elections of March 28 and April 11? Typically Nigerian, the elections have been surrounded with uncertainty, notably whether Jega, the Chairman of the Independent National Electoral Commission (INEC) will be removed.

The Central Bank of Nigeria’s Governor, Godwin Emefiele, must have foreseen this drama come the election period, hence his decision to devalue the naira and increase interest rates in November of last year.

If he had not devalued, he might have to reduce interest rates drastically. Too bad for the country! Or start printing money fast. Can he maintain that?

Increasing the interest rates will at least maintain the attractiveness of the naira against lesser competitive currencies, but not the dollar. It will also make Nigeria attractive to investors, possibly European banks who are currently faced with a high liquidity problem. Yet, the interest rate will not be enough.

Foreign exchange reserves have fallen by 8% as at the time of the devaluation and are expected to fall further since the price of oil, the mainstay of the Nigerian economy, is not rising either. Unemployment will have a free ride this year. Goodluck Jonathan must have foreseen that; so why remind us of the NIS tragedy? Why not earlier?

If the CBN Governor, Emefiele, expects devaluation to shore up expected fall in production and consumption, he might be playing a risky game. Devaluation takes a long time to kick off. Nigeria is an import dependent country. Does Nigeria have the necessary infrastructure such that agriculture and tourism, or an alternative industry, can replace the oil industry before October, a year after the devaluation?

As prices of foodstuffs and other goods begin to rise, wages will surely follow suit. Expect to see a rise of unemployment. 2015 will probably be the year of the unemployed.

By the way, it’s not even on the politicking agenda this year! Have you noticed?