Well before the current unrest in the country, occasioned by protests against Police brutality, the Central Bank of Nigeria (CBN) had been playing a key role in trying to tackle rising unemployment among the nation’s young people, writes TONY CHUKWUNYEM
In its latest unemployment report released in August this year, the National Bureau of Statistics (NBS) stated that Nigeria’s unemployment rate as at the second quarter of 2020 stood at 27.1per cent indicating that about 21.7million Nigerians were unemployed. The data also indicated that the worst hit were Nigerian youths as over 13.9 million of them were unemployed compared with 13.1 million in Q3 2018.
Specifically, the report showed that the highest unemployment rate-40.8per cent- was recorded for youths between 15 – 24 years, followed by 30.7per cent for youths in the 25 – 34 years age bracket.
In addition, the report revealed that Nigerian youth population eligible to work was about 40 million out of which only 14.7 million are fully employed and another 11.2 million were unemployed.
As some analysts pointed out at the time, Nigeria’s unemployed youth of 13.1 million, was one of the highest on the continent and is actually more than the populations of Rwanda and several other African countries. Given that rising youth unemployment is widely associated with high levels of insecurity and poverty, virtually all administrations since the 1980s always claimed to have put the issue on top of their agenda.
But the problem clearly got worse over the years and it was, in fact, as part of efforts to address it that the Central Bank of Nigeria (CBN) has been restricting access to foreign exchange for some items that can be produced locally and since 2009, has been stepping up its developmental interventions to facilitate economic growth. Indeed, although the intervention schemes that have been launched by the apex since then, such as the Agricultural Credit Guarantee Scheme (ACGS), Commercial Agriculture Credit Scheme (CACS), the N220billion Micro, Small and Medium Enterprise Development Fund (MSMEDF), Small and Medium Enterprises Credit Guarantee Scheme (SMECGS), the Anchor Borrowers’ Programme (ABP) and the Agri-Business Small and Medium Enterprise Investment Scheme (AGSMEIS), have all been targeted at helping to curb unemployment, the CBN still recognized the need to unveil a Creative Industry Financing Initiative (CIFI), in collaboration with the Bankers’ Committee, that would mainly focus on addressing youth unemployment.
Giving details about the initiative at a press briefing after the 342nd meeting of the Bankers’ Committee in February 2019, the then Director, Banking Supervision Department, CBN, Mr. Ahmed Abdullahi, disclosed that the decision to support the creative industry was born out of the Committee’s conviction that the sector holds the key to job creation, poverty reduction and inclusive growth. Also speaking at the briefing, the Managing Director of Access Bank, Herbert Wigwe, said: “The Bankers’ Committee, after a lot of research identified the creative and IT sector as a critical sector to support social and inclusive growth in Nigeria. We’ve basically found out that the sector would generate a significant amount of employment given how Nigerians inclined in the creative sector have done well in music and others.” According to the CBN, the initiative, which was aimed at enabling businesses to obtain loans up to the tune of N500million, has four different pillars that cut across different fields- fashion, information technology, movies, and music. Eligible businesses in these fields, the CBN said, could access loans under the scheme at a maximum interest rate of nine per cent per annum (all charges inclusive). The regulator also revealed that the scheme would be funded from the AGSMEIS, also an initiative of the Bankers’ Committee.
Reconstruction of National Theatre
Significantly, in order to attain the objectives of the initiative, the CBN and the Bankers’ Committee, sought and obtained the approval of President Muhammadu Buhari, to reconstruct the iconic National Theatre, Addressing a news conference during the Federal Government’s handover of the complex to the CBN and the committee in July this year, CBN Governor, Mr. Godwin Emefiele, noted that the country had the potential to earn over $20billion annually from the creative industry.
Emefiele said that the National Theater was expected to serve as the initial pilot for the Nigeria creative industry centre, adding that when the renovation of the facility was to be completed in the next 18 months, it would have been transformed into Nigeria’s creative industrial centre that will be comparable to other world class entertainment and convention centers in any part of the world.
He said: “The creative center, which comprises music, movies, fashion and ICT can be a key source of growth for our economy creating up to one million jobs for our teaming youths. It will also aid our objective of reducing our dependence on revenues from crude oil. India for example in 2018, generated over $240 billion from exports of IT, movies, music and fashion related goods and services.
“This amount is over five times our annual earnings from the sale of crude oil. With our human capital resources and an enabling environment that will help harness the creative talents of our youths, Nigeria has the potential to earn over $20 billion annually from the creative industry.”
He further stated: “Our goal for the National Theatre, is to create an environment where startups and existing businesses are rewarded for their creativity. The National Theatre when fully renovated will be able to support skills acquisition and job creation for over 1 million Nigerians over the next five years.
These Nigerians will be empowered with funds at single digits interest rate, high level training using state-of-the-art tools, and networks that will enable them to turn their ideas into a reality.”
The CBN boss disclosed that when the renovation work at the National Theatre was completed, along with the construction of supporting facilities that will be built around it, including a hotel and an expansive conference centre, the Bankers’ Committee plans to build similar creative industry centres in Kano, Port Harcourt or Enugu.
CBN’s N75bn Nigerian Youth Investment Fund (NYIF)
But it is not only the bankers’ Committee that the CBN has been collaborating with to tackle youth unemployment. For instance, on July 20, the apex bank coordinated with the fiscal authorities, especially, the Federal Ministry of Youth and Sports Development (FMYSD), to introduce a N75 billion Nigerian Youth Investment Fund (NYIF), which is designed to improve access to finance for youth and youth-owned enterprises for national development. According to the CBN, the fund is primarily targeted at financially empowering Nigeria youth to generate at least 500,000 jobs in the country between 2020 and 2023. Eligible businesses under the programme, the banking watchdog said, are technology/ innovation; agriculture and related value chain; green economy and renewable energy sector; logistics and supply chain; manufacturing; hospitality/ tourism and construction. Others are creative sector, healthcare value chain, trading and services and as well as any other activity determined by the CBN itself and the FMYSD. The CBN further said that the global limit for loans under the fund was 12.5 billion, with a moratorium of up to 12 months, while the loan tenor and interest rate is a maximum of five years and five per cent per annum respectively. Shedding light on the NYIF at the inauguration of applications for the scheme recently, the Minister of Youth and Sports Development, Mr. Sunday Dare, explained that the Federal Executive Council on July 22, 2020 approved the NYIF to the tune of N75billion spread over three years to cater to youth owned businesses and investment needs, adding that the CBN, in line with the Federal Government’s directive, provided the initial N12.5billion required for the fund to operate in the remainder of 2020. Youths applying as individuals or non-registered businesses would be able to draw up to N250,000, while youth owned registered businesses could apply for up to N3million, he said. He noted that the NISRAL Microfinance Bank was selected as disbursement agency, given its reach and spread, which ensures that youths across the country had access to apply for the fund.
Although critics in some quarters might argue that the CBN’s efforts to boost youth employment do not seem to be significantly reducing the problem at the moment, the consensus among analysts at the weekend was that a lot of idle youths would certainly be taken off the streets when reconstruction works at the National Theatre, for instance, are completed.