 So yes we're back with the breakfast. With the first conversation it's about unemployment and the fact that unemployment rate in Nigeria set to hit 40 or 41 point percent. Now according to reports from the KPMG says that the Nigerian unemployment rate had increased to 37.7% in 2022 and will further increase to 40.6% due to the continuing inflow of job seekers into the labor market. The multinational consulting firm in its newly released report said unemployment will continue to be a challenge due to the slower than required economic growth and instability of the economy to absorb 45 million new entrants into the Nigerian job market every other year. Now although the National Bureau of Statistics recorded an increase in the national unemployment rate from 23.1% in 2018 to 33.3% in 2020. It estimates that this rate has increased to 37.7% in 2022 and will further increase to 40.6% in 2023. The report also said that you know in 2024 the unemployment rate will continue to grow to 43% while inflation will accelerate to 20.3% in 2023 and 20.0% in 2024. We have a guest joining us this morning, Kelvin Immanuel, who is an economist and CEO of Dairy Hills in the FCT. Kelvin, it's good to have you join us this morning. Many thanks. Thank you so much for having me. Good morning. And when we have reports saying that unemployment rate would actually further increase to 40.6%, what does that really mean? That means that production is catering, the cost of capital is high. You can see that from the recent report that the rate is up to 37.7% and expected to go up to about 40.6% in 2023. And you can see that Unilever Nigeria, for example, has written to the Nigeria Stock Exchange the NGX about plans to take off some products out of the market. Interestingly, the debate is raging about the reason why Unilever will do that. But I'll tell you categorically that Unilever is finding difficult to source for enterprise products from outside Nigeria for its manufacturing line. It's finding difficult to repatriate FX and it's been forced to shut down some of its products. It has nothing to do with competition because some people are legend that it's because of so much competition and the question I have for you for them is how those legacy products that the company has spent billions marketing over the years and has become household names, the subject of competition battle in the detergent space, so detergent. It's unimaginable. So when they plow back production, jobs are lost and the per capita income of Nigerians has gone down nearly 50% over the last eight years. So it's a complete disaster. Hopefully the fact that the government is saying that it wants to, it has borrowed $800 million from the National Development Association, an arm of the World Bank, through pledging SDRU from its stock of SDRU with the IMF special dry rights as a collateral for that loan. So it's a very messed situation because you know this government has shown over time that it lacks the willpower, it lacks the framework through which it can incentivize the private sector to create jobs and keep people in employment and keep the per capita income high. It's shown it and the last eight years have been a complete disaster because no economic indicator has pointed positive or shown growth. I expect that in the Q2 GDP report IMF says they're expecting it to be about 3.2%. I expect that GDP report will show 2.8 to 2.9% which is a contraction you know and when your population is growing faster than your GDP that is an indication of a recession. So but then again what could be responsible for this continuous you know increase in the unemployment rate for instance the National Bureau of Statistics had recorded some sort of increase at the time in 2018 it was at 23.1% so about 33%. So what are the indices what are the indicators that over time seem to be on the high despite government policies despite you know social intervention programs and what have you we seem to be you know going on with the highest statistics and also it's cutting to this report in 2014 it probably might not just be different because we might just get it a little bit higher we will weigh my experience in 2023. I've never believed the social investment programs they give the empire the school school feeding program and conditional cash transfer I keep saying if it doesn't work it doesn't work because people don't need to give them fish you need to teach them how to catch fish and the way you can do that is incentivize the private sector and make it in fact my example is it was responsible for really really wiping off the a lot of me a substantial part of the informal economy because so many micro businesses shut down so many micro businesses that in between 5000 to 5 million they shut down you know and these are the people who create about 50 to 60% of the jobs so you know when you have a situation where people's business is the person who sells food or the person who does POS vending machine you need to is very well if you go there that's quite a number of the POS vendors are not back in business despite the fact that the CBM was compelled by the Supreme Court to allow 500 and 1,009 notes back you know those POS vending points created more than a hundred thousand jobs around Nigeria so you can imagine a substantial part of them taking off the markets those people were like I mean those people were people who owned the POS vending points were ending five six hundred thousand a month the people who worked for them were ending forty fifty thousand a month they were creating jobs above minimum wage those people have been taking off the market the person who sells foods the person who sells provision the person who sells rice you know in retail they were taking off the markets you know so it's difficult for you to understand the employment indices if you don't focus on the informal economy because the informal economy were the most impacted by the scarcity of Naira notes you know and then you can see that reflect in the job numbers so just before we begin to look at the solution you have talked about paying attention to the formal economy but then again I like us to you know put statistics like with numbers now so if we say that there's a possibility of having 41 percent of you know the population unemployed what does that really mean how many million persons are we looking at you know at the end of the year and what's the implication of this for our economy especially our security well you have to consider that about between like if you look at the population from 21 to about 40 within that band you have maybe 45 percent of Nigerians and you have a Gen Z that's just common to the labor force so when you save 40 40 0.6 40.6 percent unemployment rates on the employment you're looking at maybe somewhere around maybe 60 million of the working population that is out of the markets and this doesn't speak well about insecurity because if you look at the budget for education you'll notice that the budget for education the personnel to Kpex ratio is very high the budget for education is 4.9 percent of 22 and 3 appropriation acts and I always say that if you ignore education you are going to build insecurity because whatever you don't pay for in education you pay for in defense and you can see there is a direct correlation between the fact that there is a high there is a high interest rate in the north and the insecurity in the north it's not rocket science there are states in the north where literacy rate is somewhere around 85 to 88 percent yeah look at the correlation with the insecurity in the north so you have to understand that because the government has failed to focus its budget on the key metrics education for example right according to the Abuja declaration that the government signed it says that it's going to adopt the UNESCO standard of focusing 15 percent of its budget on education since 2010 under President Buhari that has gone down by about 34 percent to 4.98 percent right and you can see very well that it has an impact in the inability of the government in 2022 to pay as soon some people last year dropped out of school because of the strike you know some people move that broad you begin to see that our inability to focus on investing in education because you cannot pay in lecture as their salary they don't they are not motivated and incentivized to teach properly it has an impact and going forward you know you said we're going to talk about the solutions going forward see you need to change the structure fundamentally because it's my belief that looking at the structure of the budget where you have 29 percent in sinking fund that is going into refinancing and paying interest on debts and you have somewhere around 31.5 percent going into paying pms subsidy even if pms subsidy is going to be removed in the third quarter of 2023 the government needs to understand that for you to fund education it needs to change the structure of education in Nigeria the administration of education platform the NUC the ministry of education something needs to fundamentally change okay because government alone cannot fund quality education two million Nigerians going into the investment system on a yearly basis it's not practical with a budget that is 4.9 percent of 21.8 trillion it's not possible it's just not working the government needs to accept that this model we've had where you have students paying 19 000 even if it's come up for debate over time 19 000 or 15 000 or 40 000 school fees annually it's just not working it's not working you can't you can't teach somebody how to be an engineer or how to be a medical doctor or how to be an architect that will compete with his mates in the uk and in america or in singapore south Korea with 40 000 it's just it's just not practical we need to sit down and have an early consensus on how to change the structure fundamentally of this economy now talking about changing the structure of you know the economy you have mentioned education as you know a key pointer and some sort of government policy in terms of budgeting to whether education will help but again let's also look at you know the type of education that we offer now and i know that uh we're very big on the conventional university and so people just go in there just get a degree but yes we probably might just have you know the vocational institution but don't you think that um we there might just be need to pay attention to in the beat to address this issue of unemployment to you know have more attention paid to vocational education what people can literally um get to learn a lot about maybe skills acquiring more skills um technical skills that can actually help solve day to day problems cap and tree what have you and all the stuff rather than the continued um you know having more conventional universities across the different parts of the country i i i absolutely subscribe to that in fact i believe that we need to buy vocational education because and this is the reason why the polytechnics are created in the first place what we lost the plot along the way the polytechnics are not created to help students sit in lecture rooms and write notes the polytechnics were created to see how they could simulate vocational training for students cap and tree tying post tree um different kinds of vocational skills um hairdressing uh makeup you know different kinds of vocational skills your makeup artist today who make two um hundred thousand a day you know i i don't see why you have an economy where people feel that the person who um is a medical doctor is more prestigious and is a better human being than the person who is a makeup artist or the person who is a carpenter you know it's in Nigeria where Nigeria people discriminate against plumbers but when you travel to London and you ask a plumber to come fix something in your house and he gives you a bill and tells you that you're being 600 pounds you you begin to think again you begin to ask yourself if the plumber is even any better than some medical doctors and nurses in the UK you know so we need to mainstream vocational training in polytechnics that's the reason why vocational and polytechnics were created polytechnics like i said were not created to have people sit down in lecture rooms and write notes and at the end of the day they come out and what they do until school does not have any marketplace value which is what you see today you've also talked about it i know you have mentioned the metrics of uh what sort of metrics that we need to pay attention to so what are the key metrics that government need to pay attention to you have different stakeholders the private sector as well as citizens of the country so um we're able to get out of this quack maya that we're in first of all the government needs to raise revenue to GDP ratio from 7.5 percent the government needs to restructure is that it needs to stop going from the central bank so that you will not have continuous narrow devaluation that has affected the uh cost of importation because narrow devaluation makes it more expensive to import for companies and contributes to inflation which is what you've seen over the last four years especially the government needs to change its medium term expenditure framework and relocate the structure of its budget in my opinion i think the government needs to focus 30 percent of its budget on 2024 on education and healthcare healthcare is also 4.98 percent of 21.8 trillion and the personnel to kpex ratio it's is abysmal you know the personnel to kpex ratio is about 2.7 times the kpex with a ministry overhead of 22.4 percent the government needs to um focus on ensuring that it can reduce the amount of circulation of cash in the system to reduce cost push inflation and it can work on backward integration for key sectors to focus on reducing demand for inflationary buffers if it gets that inflation number down below 20 percent the interest the empire will begin to come down the empire begins to come down i'm sorry that i heard we have to come in at this point i'm told that we have less than two minutes to go at this but i then think that um let me ask you quickly if you think that if subsidies removed in june do you think that this would also uh you know tinker with the figure of unemployment i mean also real time would also affect you know the figure that we have now looking at 41 percent you think that that would also impact on unemployment rate as it is would there be an increase we expected to experience a decrease what do you think would happen with that exact policy if you remove pms subsidy and tango to refinery does not start immediately before you remove it petrol price will go to a dollar five cents per liter i'm expecting somewhere between seven hundred and um 82 and seven hundred and ninety nine per liter if tango to start 27 percent of the cost of handling it will be taken off because that's the cost that's what it costs to land pms in nigeria so you're going to bring pms to somewhere around five hundred and eighty nine maybe when it's taken out of the refinery therefore you have somewhere around six hundred and nine so it definitely is going to contribute to inflation and it might even price some people out of business you know the plan like i said that the government has of giving out ten thousand and nine per month between seven and ten thousand and nine per month as palliative is completely um it is not going to have any impact whatsoever um you know if there was time i've talked about what the government should have invested that eight hundred million dollars so so at this point so at this point are you saying that we are expecting to have a lot of people out of you know uh dear jobs people will be jobless will people especially even from outside of the economy i'm expecting that the price of pms will price them out of the markets because they especially in the service sector people won't be able to produce at a reasonable price for the people who patronize them to afford them so they'll be priced out of the markets we have to go at this point thank you so much kelvin uh immanuel we've had a great conversation this morning and we can't stop we could you talk about these issues as we proceed thanks for having all right then that's the size of it this morning on the first segment we take a break when we return our concern would be on the issue of the elections i mean the elections have come and gone but the issues with the elections or from the elections have not ended i'm sure that we continue to talk about this up until you know the end of 2023 or further would just be looking at the fact that aina is saying that electronic coalition of results are not compulsory that is in response to the app political party that had questioned the credibility of their election please stay with us we'll be right back