Lagos State Governor, Akinwunmi Ambode says the country needs at least 4 million jobs annually to achieve its full economic development potential.
He was speaking at the opening session of the 9th Annual Bankers’ Committee Retreat of the Central Bank of Nigeria (CBN).
According to Ambode, it is time for the government to review policies that inhibit growth and come up with a well-functioning low cost financial system that will work for all Nigerians.
He described the theme of the retreat, “Improving Financial Access, Enabling Job Creation and Driving Inclusive Growth in Nigeria,” as apt, noting that it was at the heart of the nation’s economy.
“To meet our growth ambitions we need jobs. Figures from the National Bureau of Statistics show that in employment terms, from a labour force population of about 81 million people, we currently have 11.5 million people unemployed in Nigeria and 17 million people under-employed, with the total employment around 52.6 million, while the working age population grows by 3.7 per cent every year.
“So, to make a meaningful dent on unemployment and underemployment, and to reduce poverty (which is at over 60 per cent), we need to be creating at least four million jobs per year.
“Where do banks fit into all of this? Well, the reality is if we do not have a well-functioning banking sector, all of this is not possible. Both investment and day-to-day commerce requires the intermediation of banks.
“And while someone outside of the formal financial sector can in some cases make a living, the reality is that incomes of the bottom of the pyramid are increased when we have better financial inclusion but we are not there yet.”
The Governor, who particularly alluded to the strategy adopted in Kenya to deepen financial inclusion, said efforts must be made to ensure low cost access to banking services especially through mobile money.
Ambode challenged the CBN, the Nigeria Deposit Insurance Commission (NDIC), commercial banks and other players in the financial system to decide the type of financial system that would really impact on employment and bring more people into the formal financial system.
“This is where we should focus as a nation not the type of directives or decisions that actually try to stifle growth and commerce. One clear example is this; as a State Government, I want to take a commercial loan from the bank and they tell me I should go and get a letter from Debt Management Office (DMO); I should get approval from the Federal Ministry of Finance; I should go to CBN and so on. Who does that?
“You want to accelerate growth and everything that I am doing even when I take loan from the bank; when I do bond and so on, I am only trying to reflate the economy. Each construction site that you see in Lagos, I am trying to create employment at the lower level so that the artisans, the bricklayers and so on can go home with N5,000. I need to do something in Badagry to make the people stay there and not come to the central Lagos and when you take the extra money outside the IGR, you are actually trying to help the economy to reflate itself and that is why you are able to excite yourself with the growth that you have seen in the third quarter that we say is 1.5 but that is not the number that we want.
“So sometimes, government seems to shoot itself in the leg. Why should Lagos State go and be meeting DMO to say I want to take a commercial loan when 80 per cent of my IGR can pay the loan itself back?
“So, you see that there is some sense of homogeneity in the policies that we make but sometimes they are not really flexible and you end up coming back to say we want to create jobs but the things that create jobs are the things that we are actually working against and you create unnecessary competition in the system.”
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