Recently the Nigerian Senate raised concerns over the rising rate of unemployment in the country. According to the Nigerian Bureau of Statistics, about 23.1% are unemployed with another 16.6% underemployed. This rate has been on a steady increase with a 33.5% projection for 2020. As of Q3 2018, 20.9 million were unemployed with 9.7 million of them doing absolutely nothing.
Many have turned to entrepreneurship as a means of survival while others are simply frustrated and are looking for any available opportunity out of this jungle.
How can a nation unleash prosperity for its people?
One thing I believe God has given every nation is natural resources. It is natural and abundant for a reason. Every nation has something provided by nature to explore for its survival.
Nigerian is not an exception. In fact, Nigeria has enough to take care of its people and others. However, we have not done a good job of exploring, liberalizing and commercializing it. Our oil and gas resource is inefficiently managed without deriving its full value chain benefits while other natural resources are still latent.
Our gold is ignored or left to discretionary or predatory mining. Why is gold production not treated like crude oil? Why is it not a separate revenue line item in our budget?
Why would a nation ignore its resources and wallow in abject poverty and desperation?
Risk-taking which is central to entrepreneurship that can increase national output is not encouraged except for political expediency. Government policies are inimical to enterprise growth. Running a business is like a joint venture with the Nigerian government.
If the legislature wants to help in reducing unemployment, they should look into those laws that limit the full utilization of our natural resources and entrepreneurial appetency.
We also require a larger manufacturing base, without which the unemployment state will continue to worsen.
Several regulatory reforms put forward to helping entrepreneurs are still fuzzy. There should be clarity and a sense of direction in policy implementation.
Some areas of concern listed below should be addressed:
Tax Reduction
Tax is an area where a regulatory review is required. Recently the President signed the new Finance Bill that exempts certain turnover from Income tax and also graduated company income tax based on turnover. This is a good incentive for helping MSMEs grow. The government, however, needs to address multiple taxations.
Compliance Cost
The regulatory framework around MSMEs’ tax compliance should be reviewed. MSMEs’ cost of compliance is high and the process is interlaced with complexities. FIRS should simplify the filing process and should have government-approved auditors that can audit books presented by MSMEs.
Local Content
Local Content is another regulatory framework that can help promote MSMEs. Especially in the area of procurement. The government is the biggest money spender. It should be deliberate in integrating MSMEs at different levels of its supply chain.
Access to finance
Regulations around business financing, equipment leasing and working capital with a single-digit interest rate are required. The CBN and the Bank of Industry are trying at different levels, however, more effort is required at easing access to capital for MSMEs.
As I drop my pen, let me say that unemployment will only respond to policies well-calibrated and targeted at it and not to political grandiloquence.