Tackling unemployment through entrepreneurship
One basic reality that stares Nigeria squarely in the face today is the high rate of youth unemployment. While a confluence of factors can be blamed for this undesirable situation, many analysts believe it is inadequate capacity and poor entrepreneurial education that have turned young Nigerians into perpetual seekers of phantom jobs rather than entrepreneurs creating employment for other age groups in the economy.
The type of education and training received by Nigerian students from higher institutions, according to the analysts, is tailored towards white-collar jobs and not self-employment. Equally, the education is not industry-targeted, thereby resulting in skills mismatch which inevitably keeps young graduates in the labour market for a long period of time. Again, young Nigerians are not given entrepreneurial education early enough, as is done in other emerging economies. This therefore precludes them from understanding opportunities in the economy, learning easier ways of sourcing seed funds and imbibing savings culture that will enable them to start small and grow big.
A recent research by Agusto & Co, commissioned by FATE Foundation, reports that “[t]he poor standards of education in Nigeria have the consequence of producing graduates ill-equipped to be entrepreneurs or who hardly qualify as employable in micro, small and medium enterprises”.
This contrasts with what obtains in China, where “let’s start our own business” has today become a slogan, as young Chinese now prefer to own their own businesses rather than continue to become employees. According to CCTV.com, internet business tops the array of businesses young Chinese love venturing into.
A way out of the woods for Nigeria may be to study and possibly replicate the Chinese model. It is high time Nigerian youths realised that opportunities for the so-called white-collar jobs have thinned out, while opportunities abound everywhere in the country for enterprising young people. This is the time to embrace skills acquisition and entrepreneurship. We totally agree with Summy Francis, president, Africa’s Young Entrepreneurs, that “entrepreneurship and innovation are the only solutions out there for Nigeria”.
And for the already existing MSMEs, there is need to urgently take steps to make entrepreneurial, managerial and financial training opportunities for them more pervasive. As Rasheed Olaoluwa, chief executive officer, Bank of Industry (BOI), has said, MSME owners need to have good business plans and understand the market for their products.
Indeed, experts have continuously expressed worry that the absence of full-fledged entrepreneurial institutions means that most young Nigerians who dare to venture into their own businesses lack book-keeping skills and business plans that can help attract funding for them. As Agusto & Co aptly puts it, “Some small business owners cannot read and understand business registration procedures, bank account opening procedures or loan requirements.”
We are not unaware that there has been poor response from Nigeria’s financial institutions in the area of funding small businesses as currently, only a meagre 3.5 percent of bank finance flows to agriculture, 0.2 percent to SMEs, and virtually nothing to exports, according to the Central Bank of Nigeria (CBN). This situation must change if Nigeria is to make headway in tackling youth unemployment.
Thankfully, BOI has a number of funding opportunities for young Nigerian entrepreneurs, such as Cottage Agro Processing Fund, Fashion Fund, Creative Industry Fund, Graduate Entrepreneurship Fund, Export Fund (managed for the African Development Bank), among others. The youth need tap into these opportunities.