774,000 Jobs: Any Value For Money?

Eze Onyekpere

One of the trending projects for which the Federal Government is receiving plaudits is the promise to create 774,000 jobs at 1,000 per local government in Nigeria by the Buhari regime. Notwithstanding the misunderstanding between the Minister of State for Labour and Employment, Festus Keyamo, and the House of Representatives Committee on Labour, last week, this project needs to be appropriately interrogated and reviewed in the context of national fiscal realities and the demand of value for money. What value will this project add to the national economy during and after its implementation. Are there other projects which will yield much greater value if the resources are alternatively deployed?

The starting point is to appreciate that 774,000 Nigerians paid N20,000 a month for three months will amount to N46.440bn. When the cost of administration and logistics is added, it will cost the treasury not less than N52bn. Recall that in establishing the N500bn COVID-19 intervention fund, the Federal Government allocated N120bn to social support/palliatives. The 774,000 jobs may be funded from this provision. It is reported that persons to be hired will work for three months undertaking road rehabilitation and social housing construction, urban and rural sanitation, health extension and other critical services determined by a committee which supervises the project. After three months, the money will be exhausted, and the project will be wound up. The promoters aver that this is a special works programme derived from the job creation ideas of the International Labour Organisation and historical experiences from the Great Depression to practical action in India, China and other Asian countries which has lifted millions out of grinding poverty. According to Keyamo, “Because of the need to be honest before Nigerians, the State Selection Committees would be instructed to allot to political office holders like our distinguished senators, honourable members, ministers and governors, a number in total not exceeding 10 per cent of the total beneficiaries in that state. This is to ensure that (a) majority of Nigerians who do not belong to any of the political divides actually benefit substantially from this programme”. Already, at the starting point, political interest has taken up ten percent of those to be hired.

Our fiscal reality shows that in the first quarter of 2020, actual accrued federal revenue amounted to N950.56bn while 99% of the revenue amounting to N943.12bn was used for debt service. The implication of the foregoing is that the personnel, overhead and capital expenditures spent in the first quarter were derived from borrowed funds or other deficit sources. It is acknowledged that the price of crude oil has improved a little in the last weeks of the second quarter 2020, but the fiscal reality may not be much different from the first quarter statistics. Thus, the resources for financing the 774,000 will be borrowed; it is not our earned revenue.

This is where the value for money and cost benefit analysis set in to determine the best use of scarce funds. Let us start from the assumption that the funds are borrowed funds. The Fiscal Responsibility Act demands that borrowing should be used to fund capital expenditure or human capital development. The 774,000 jobs do not qualify as capital expenditure and by no stretch of the imagination can you classify transient jobs as human capital development. Human capital development refers mainly to education and health and the persons to be hired are expected to be unskilled workers who will not acquire new skills under the project. Thus, in no way will their capacity be boosted. Even the work the employees will be deployed to do has yet to be fully identified across all local governments in the country. Borrowing money to execute this project will therefore be contrary to the provisions of the Fiscal Responsibility Act. If we are borrowing to fund this project, how will the activities of the project generate the resources to pay back the loan?

If the funding will come from earned revenue, the challenge of value for money and alternative use of this large amount of money will also be thrown up. Starting with the goal, it is appreciated that this project intends to create jobs and reduce poverty. With over N52bn, we can create thousands of micro and small-scale enterprises and sustainable jobs across the federation. These are enterprises and jobs that will not be transient or tenured to three months, but which can survive and grow to become the base of economic sustainability worthy of replication. The sum of N60,000 per employee multiplied by 1,000 persons will give N60m. N60m can be used to set up between two and six labour intensive agriculture or other value chain enterprises in each local government area. These micro and labour intensive enterprises can for instance process cassava into flour, industrial starch, animal feed; process palm fruits into edible oils, cakes and other products; set up storage facilities for tubers, grains, vegetable and other perishable farm products to prolong their shelf life, etc. The focus will be on products that have local demand and can be used for food and in industries. The beauty of these agriculture value chain enterprises is that the minimal machinery needed to run them can all be fabricated locally ensuring that other local enterprises are patronised in the course of expending the money. This will create thousands of jobs across the federation. So, the idea of agriculture value chains sitting and gathering dust on the shelf over the years will be energised for economic growth.

Alternatively, a skills acquisition programme with resources set aside for starter pack support will yield greater value than the three months transient employment. Furthermore, identifying thousands of Nigerians who have been trained under various government initiatives and equipped with skills and helping them to start up small enterprises will yield greater economic and social dividends. Supporting clusters of skilled craftsmen such as tailors and fashion designers, shoemakers, etc. with advanced machinery to make their products more competitive will also lead to greater productivity and employment of more hands. Investing in drudgery reducing farm machinery for cooperatives of women and poor farmers may also yield greater dividend in terms of increased farm productivity.

Asking each local government to come up with a list of 1,000 persons to be hired when local governments are not of the same size and population and the challenges are not the same is a political game-balancing act. It is not about economy of operations and neither will it support efficiency because we are likely going to end up with performance of work with no useful purpose. Most state and local governments already have staff dedicated to digging and cleaning drainage and general public works. All they need is to be supported and supervised by their employees to do their work well.

Nigeria needs to get its priorities right and stop playing to the gallery. During the elections, it was Tradermoni; now palliatives are in vogue while we are preparing for the transient jobs. N52bn will be spent but unemployment will remain at its very high level. By January 2021, it will be over, and we will be back to square one. We need to create new small and medium scale enterprises and sustainable jobs.