…According to the report, sustained poverty reduction depends on creating wage jobs through macro-fiscal stability, growth, and private sector development, complemented by building human capital
FRI OCT 18 2024-theGBJournal| ”Since Nigeria has a young and growing population, the jobs that can harness the country’s potential “demographic dividend” are needed now,” the World Bank said in its latest Development Update on Nigeria (NDU).
The world bank noted that more than half of the population lives in poverty, adding that the very high and rising level of poverty in the country partly reflects the modest overall pace of economic growth that is insufficient to compensate for the erosion of purchasing power brought about by inflation as well as the non-inclusive structure of growth.
According to the report, sustained poverty reduction depends on creating wage jobs through macro-fiscal stability, growth, and private sector development, complemented by building human capital.
”Wage jobs are associated with escaping poverty, but they remain rare: just 13.6 percent of employed Nigerians are primarily engaged in wage work. Addressing the urgent need for more wage jobs depends on the foundations of macro-fiscal stability and growth.”
The bank made recommendations to arrest the jobs dearth. It said; this entails establishing the conditions for private sector development – boosting market access, increasing openness to trade, and promoting a better business environment can all help.
”This must be complemented by other long-run efforts to reduce poverty, including building human capital and ensuring the skills of Nigeria’s workers match the current needs of the labor market.”
The World Bank also recommended Policy initiatives for women and youth that can improve the labor market’s poverty-reducing potential.
”Initiatives that cover mostly highly-formalized wage workers – including policies on public sector jobs and minimum wage legislation – only reach a small segment of Nigeria’s poor and economically insecure population directly, as they do not have access to these types of jobs.”
According to the Bank, such policies may also be fiscally costly, given the large share of formal public sector workers. Focusing on excluded workers offers a clearer avenue for reducing poverty.
”Women and youth have lower access to productive jobs than the rest of the population, so supporting better labor market outcomes for them is key.”
Strategies to create productive wage jobs and build the right skills
-Maintain momentum on reforms to foster macro-fiscal stability and accelerate growth.
-Leverage Nigeria’s large internal market by investing in infrastructure and eliminating informal trade costs
-Reinforce provision of the basic infrastructure needed by firms to survive and grow, including uninterrupted electricity
-Work towards competitive neutrality, meaning that no firms should have undue advantages from who owns or controls them
-Foster a more conducive business environment
-Continue investing in human capital
-Track the economy’s skills needs, as sectoral shifts and other trends – including
digitalization – progress
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