By Deji Abdulwahab
Abuja – The Abuja Chamber of Commerce and Industry (ACCI) has advised Federal Government to sustain its current fiscal and monetary policies to reduce unemployment in the country.
The Chamber President, Mr Tony Ejinkeonye, gave the advice in an interview with the News Agency of Nigeria (NAN) in Abuja on Tuesday.
Ejinkeonye was reacting to the recent employment statistics released by the National Bureau of Statistics (NBS).
“The population of the labour force in Nigeria, according to NBS, increased to 79.9 million during the second quarter of 2016 from 78.5 million in the first quarter of 2016.
“ This means that 1.4 million persons from the economically active population joined the labour force.
“Similarly, during the reference period, the number of unemployed in the labour force increased by 1.16 million persons,’’ he said.
The chamber boss said that this resulted to an increase in the national unemployment rate to 13.3 per cent from 12.1 per cent in the first quarter of 2016.
He said the NBS report showed that the percentage of people employed between first quarter and second quarter of 2016 was 0.06 compared to 12.2 per cent unemployed during the same period.
“From the above statistics, there is no doubt that serious labour market problems loom. First, both employment and wages have fallen in recent months.
“Job losses are not limited to one or two areas of the economy, but are increasingly evident in almost all sectors.
“Most frustrating is that long-term unemployment is higher than it has ever been at this point in the economic cycle.’’
Ejinkeonye said that this figure might rise to about 30 per cent by 2019 if nothing was done to check the menace.
“It is also imperative to note that unemployment is always a lagging indicator in an economic slowdown.
“Unemployment rises during recessions and often peaks after a recession has ended; therefore, unemployment rates are likely to increase steadily in the months ahead.’’
Ejinkeonye said that the consequences of a high and rising unemployment rate were unhealthy and that high unemployment weakened consumers’ purchasing power which remained the driver of local economies.
“Rise in unemployment rates also affects other areas such as quality of health services and living standards and this affects the society in general.
“In an economy with high unemployment rate, the hours lost by the unemployed are usually unrecoverable.’’
The chamber boss said unless all the tiers of government joined hands to tackle the high and rising rate of unemployment in the country, crime rates would continue unabated and the economy would continue to dwindle.
According to him, government needs to pursue expansionary fiscal policy which involves cutting taxes and increasing government spending.
“ This can reduce unemployment by helping to increase aggregate demand and the rate of economic growth.
“Lower taxes increase disposable income and therefore help to increase consumption, leading to higher aggregate demand. An increase in aggregate demand, may lead to an increase in real Gross Domestic Product (GDP).’’
Ejinkeonye also advised government to intensify efforts in the implementation of its monetary policy, saying the policy would entail cutting interest rates.
According to him, lower rates decrease the cost of borrowing and encourage people to spend and invest.
“This increases aggregate demand and also helps to increase GDP and reduce demand deficient unemployment.’’
The chamber boss said lower interest rates would reduce foreign exchange rate and make exports more competitive.
“Where lower interest rates are ineffective in boosting demand, Central Bank of Nigeria (CBN) may resort to quantitative easing. This is an attempt to increase money supply and boost aggregate demand.’’
Ejinkeonye said education and training were imperative to jobs creation as it would give the long-term unemployed new skills to enable them to find jobs in developing industries or to become self employed. (NAN)
