How lack of foreign investment fuels unemployment

By Kelly Bidemi

Unemployment rates per state:

Rivers —  43.7%.

Bayelsa  — 27.8%

Cross River  — 31.6%

Delta — 40.3% —

Edo   — 19%

A RECENT report by the Nigeria Statistic Bureau (NBS) revealed that two oil rich states in the region, namely, Akwa-Ibom State and Rivers State respectively, rank second and third states with highest unemployment in the country.

NBS Labour Force Statistics: Unemployment and Underemployment Report for second quarter 2020, revealed that present unemployment rate in Akwa Ibom is 45.2% and while that of Rivers State is 43.7%.

Unemployment rate in other states namely: Bayelsa  (27.8%), Cross River (31.6%), Delta (40.3%) and Edo  (19%).

The report further revealed that out of the 2,534,495 labour force in Akwa Ibom, 1,144,399 are unemployed. In Rivers, out of the 3,921,860 labour force, 1,714,189 persons are unemployed. Similarly in Delta, out of its 2,494,452 labour force, 1,005,848 are without jobs. Another grim unemployment rate is that of Cross River which has 1,959,675 labour, also recorded 618,484 persons.

Economist and development experts in the region have observed that despite the region’s rich oil and gas resources, its respective states have some of the highest unemployment rate in the country. They hinged growing unemployment on apparent low foreign direct investment in the region.

NBS foreign capital importation report between 2013 and first quarter 2020, indicate that out of the $92,284,945,105.59 inflow into the country, the  South-South region got $474 million. The low inflow into the region, has been blamed on lack of investment in the oil and gas industry due heightened concern of activities of militants, rampant crude oil theft, sea piracy and crew kidnap for ransom and dilapidated seaports and deplorable road infrastructure.

An economist and founder/CEO, Seed Group,  Dominic Essien, said skyrocketing unemployment rate in the region has been triggered by the lack of incentive for investors to invest in the region.

Essien stated that there was presently a lot of risk issues in Niger Delta crisis and it is almost impossible to throw in money in an area that is boiling.

“So the decline in foreign investment particularly in the manufacturing sector is because there is no guarantee of safety. So the people who have money would rather go to places where they are sure of their funds. Over time, the South West was peaceful. It is self inflicted. We will have to make sure we have nipped kidnapping, armed robbery in the bud.”

He said respective State governments must realise that boosting investment is a leadership issue. To this end, he insisted that governments  need to try and boost investors confidence again and ensure that the area is pretty safe for people to come in and invest.

A development expert, Robinson Sibe, observed that  the monies that have been coming to the South-South region in the past have been tied to oil and gas sector. He reckoned that because of the downturn in the oil industry, and with the collapse of global oil price, there has been a lot of scepticism in terms of new investment in the oil sector in the country.

“The state governments have to be creative. You have to make yourself beautiful to attract investors. Look at the Niger Delta states have you seen any strategic move by any of them to attract investment? they just sit and are satisfied from what comes from FAAC and what they generate. They have not really been strategic in terms of attracting investors.”

A World Bank consultant, Mr. Ross George, has recommended that the oil producing states should strategically begin to lure investors in the manufacturing and shipping sectors in order to boost economic activities and generate much needed jobs in the region.

Our dependence on oil and gas has become a challenge. Investing in railway is going to be a lifeline in the years to come. Right now, we are not participating in the upstream of food processing industry in Nigeria at all. We are cut off from agriculture completely. The North has the land, but the South-South has the money to process it. There is gap in logistic. Security is not really a problem. Crime follows the money.

A sociologist, George Boma, has warned that the growing unemployment in the region if unchecked has grave social consequences.

Boma stressed that studies over the years have shown  that a high unemployment rate is directly related to increases in crime and violence.