Private sector should drive job creation

The private sector is recognized as a critical stakeholder and partner in economic development, a provider of income, jobs, goods, and services to enhance people’s lives and help them escape poverty. The2013 Brookings Blum roundtable policy briefs, which detailed the role of the private sector in the post-2015 development agenda, indicate that every high-level development report and project now has private sector involvement; and that the time is ripe to systematize this approach and experiment with new forms of public-private partnerships. Similarly, according to a Stakeholder consultations report on the future EU approach to private sector development and engagement of the private sector for development; it was stated that the private sector plays a crucial role in the development process by creating jobs, innovating and providing products that can transform the lives of poor people.

It is in this regard that at the opening ceremony of a two-day “2012 Oil and Gas Trade and Investment Forum” in Onne, Rivers state, President Goodluck Jonathan stressed the role of the Private Sector in the realization of Nigeria’s economic growth under his transformation agenda which is focused on repositioning the nation among the leading twenty economies of the world by the year 2020.

However, on the contrary, the Nigeria Employers’ Consultative Association (NECA) recently decried the exclusion of the real private sector from the composition of the Presidential Jobs Board inaugurated by President Goodluck Jonathan. According to the report, the board which is chaired by Vice-President Namadi Sambo, is saddled with the responsibility of creating three million jobs in the next one year.

We believe that expanding economic opportunity is arguably where firms have the greatest potential to create what Michael Porter and Mark Kramer have called “shared value,” or value for both business and society. Business activity can create jobs and entrepreneurial opportunities, cultivate inter-firm linkages, enable technology transfer, build human capital and physical infrastructure, generate public revenue for governments, and offer a variety of products and services to consumers and other businesses, including those operating at what has been termed the “base of the economic pyramid.” Each of these impacts has multiplier effects on social and economic development.

A look at China with a GDP growth rate of nine per cent in 2009, India with a 6.2 per cent growth rate and Brazil at 5.2 per cent, one finds that all have vibrant private sectors. China, with a labour force of 812.7 million, has undergone a steady transformation from a centrally planned economy to a private sector led one over the past 30 years. India has become a world technology centre, driven by a private sector of more than 200 million persons and entities. And through its private sector, Brazil has built one of the world’s largest retail markets, dominated by huge supermarket chains.

In addition, a new EU policy paper on setting out the role of private sector at the forefront of international development in its partner countries recently adopted by the European Commission revealed that the private sector provides some 90 per cent of jobs in developing countries. Therefore there is no doubt that government has the capacity to generate jobs and provide employment in the public sector, but much would be achieved in partnership with the private sector. Moreover, the Nigerian economy must be transformed into a private sector-led one, if the government’s Vision 2020 plan is to succeed. Besides, the private institutions are better placed and positioned to work with the government in creating sustainable jobs. Thus, the Presidential Job Board is a welcome development that would help in addressing the high unemployment among our youths; however, government should consider incorporating representatives of the private sector on that Board.