10 things World Bank’s latest report revealed about Nigeria

The World Bank recently put out a report in which Nigeria was x-rayed through the lenses of unemployment, economic hardship, and migration.  In the research paper which was put together by a team of economists, it was discovered that Nigeria’s unemployment crisis in recent times is the worst in the nation’s history.

The paper also threw more light on the vital contributions that migrants make to our society and gave inference on what the nation can do to tap effectively into this stream of income while also playing its part in ensuring safe, regular, and responsible migration and mobility in line with the United Nation’s Sustainable Development Goals.

The World Bank Report which was titled “Of Roads Less Traveled: Assessing the potential of economic migration to provide overseas jobs for Nigeria’s youth”, contains so many points that the government and people of Nigeria should ponder over, however, below are 10 major ideas from the 99-paged research manual.

1. Little attention paid to SDG goal on migration

According to the report, “despite the topic of migration receiving extensive limelight in recent years, little attention is paid to policies that help Nigeria realize the United Nations Sustainable Development Goals on facilitating safe, orderly, and regular migration.

“Nigeria is both Africa’s most populous country and its largest economy. Nigerians are not only creating a vibrant and dynamic society within Nigeria but are also leaving their footprint across the globe in diverse fields ranging from medicine to movies, and from literature to diplomacy. Nigeria is reaping dividends from the success of its diaspora. These benefits not only come
in the form of remittances—which equaled 5 percent of Nigeria’s GDP in 2019—but also in the form of investments in Nigeria and transfer of skills and technology from returning migrants.

Yet, when it comes to the discourse on international migration, the narrative has often focused on the increase of irregular migration from Nigeria in recent years. Harrowing images of Sub-Saharan migrants, including from Nigeria, being sold as slaves in Libyan markets shook the globe in 2018. In response, both governmental and non-governmental actors have put in place strong programs and mechanisms to strengthen border controls, raise awareness against irregular migration, and prioritize domestic job-creation programs to address the “root causes” of migration.

“An example of such a program is the European Trust Fund for Africa (EUTF) which was established in 2015 with the aim to promote areas of mutual development interest between Europe and Africa. It has since provided more than €4 billion in aid to African countries to address various development-related challenges and priorities in Africa. One of the core objectives of the programs supported by EUTF is to provide comprehensive migration management support to African countries to stop the flow of irregular migrants to Europe. Since its inception, the EUTF has provided more than €770 million for migration-related projects in Nigeria. Most of these funds are invested in border control measures, awareness campaigns to stop trafficking, and the creation of jobs domestically, including for returned Nigerian migrants.

“However, a critical category of program that is missing among the current set of measures are programs of the kind outlined in the United Nation’s Sustainable Development Goals that aim to complement efforts to stop irregular migration by “facilitating orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies.”

2. Nigeria Experiencing Its Worst Unemployment Crisis

According to the latest findings by the World Bank, Nigeria is facing one of the most acute jobless crises in recent times. “Between 2014 and 2020, Nigeria’s working-age population grew from 102 million to 122 million, growing at an average rate of approximately 3 percent per year. Similarly, Nigeria’s active labor force population, i.e., those willing and able to work among the working-age population, grew from 73 million in 2014 to 90 million in 2018, adding 17.5 million new entrants to Nigeria’s active labor force. Since 2018, however, the active labor force population has dramatically decreased to around 70 million—lower than the level in 2014— while the number of Nigerians who are in the working-age population but not active in the labor force has increased from 29 million to 52 million between 2014 and 2020.

“The expanding working-age population combined with scarce domestic employment opportunities is creating high rates of unemployment, particularly for Nigeria’s youth. Between 2010 and 2020, the unemployment rate rose five-fold, from 6.4 percent in 2010 to 33.3 percent in 2020.

“The rise in unemployment rates has been particularly acute since the 2015-2016 economic recessions and has further worsened as COVID-19 led to the worst recession in four decades in 2020. The unemployment rate, defined
nationally as the percentage of the labor force population who could not find at least 20 hours of work in the reference period, was significantly higher for youth (42.5 percent) compared to non-youth (26.3 percent). Women are also particularly vulnerable in Nigeria’s labor market. Compared to 46.4 percent of the male population who are fully employed, only 40.6 percent of women are fully employed. The share of fully employed is significantly lower in rural areas
compared to urban areas.

“Increasingly, educated Nigerians are struggling to find employment opportunities in the country. While unemployment rates have increased substantially for Nigerians across all education levels over the years, it has become progressively challenging for educated Nigerians to find employment opportunities. Between 2010 and 2020, the unemployment rates for Nigerians with secondary and post-secondary education increased by more than 30 percentage points, preventing new educated entrants in the labor market from earning returns on human capital investment.”

3. Unemployment creating migratory pressure

It was inferred by the researchers that Nigeria’s unemployment crisis is creating migratory pressure in the economy in combination with significant demographic changes and increased aspirations of the youths.

“A combination of rising unemployment, booming demographics, and unfulfilled aspirations is increasing the pressure on young Nigerians to migrate in search of gainful employment overseas. Unemployment is considered to be a key driver of migration.

“Consequently, multiple surveys show that the number of Nigerians who are looking to migrate internationally is high and increasing. The proportion keen to leave permanently has increased from 36 percent in 2014 to 52 percent in 2018, according to Gallup. Data from Afro Barometer show that the desire to migrate is higher among unemployed (38 percent), youth (39 percent), secondary education graduates (39 percent), urban residents (41 percent), and post-secondary graduates (45 percent) in Nigeria.

“Nigeria accounts for 20 percent of the population of Sub-Saharan Africa and is projected to be the third most populous country in the world by 2040, with over 400 million inhabitants. The number of children below the age of 15 outnumbers the number of youths aged 15-34 in 2020, but as those children enter the working-age population, the number of youths aged 15-34 is set to increase from 68 million in 2020 to 141 million in 2020, significantly adding to the stock
of working-age population in the future.

“In comparison, several high-income OECD countries are facing a rapidly aging population. The old-age dependency ratio, which measures the share of the population aged 65 and above in comparison to the working-age population, is set to increase by more than 20 percentage points in countries such as Italy and by 10 percentage points in Germany and Canada. In Nigeria and Sub-Saharan Africa, the old-age dependency ratio is expected to remain below 10 percent in the foreseeable future.

“While labor shortages caused by aging in high-income OECD countries, and labor surpluses caused by a demographic boom in Sub-Saharan Africa could lead to a scenario where some of the surplus labor from Nigeria could find employment in high-income OECD countries, this requires regular channels for Nigerians to find overseas employment. However, since there has not been an expansion of legal migration routes for youth increasingly eager to find opportunities in the overseas labor market, young Nigerians are opting for irregular migration routes to realize their hopes for a better life.

“The number of first-time asylum seekers from Sub-Saharan Africa and Nigeria to Europe peaked in 2016, at the height of the European migration crisis, before subsiding in late-2017. Nigerians represented the largest group of migrants from Sub-Saharan Africa to arrive in Europe in 2016 and 2017. Nearly 40,000 Nigerians arrived in Italy in 2016 with over 90 percent arriving via sea routes. A larger share of Nigerian migrants arriving in Italy were women (32 percent) compared to migrants from the rest of SSA (24 percent).

“Similarly, a larger share of Nigerian migrants had completed secondary education (39 percent) compared to migrants from the rest of SSA (21 percent), which tallies well with the analysis of the domestic labor market that shows that educated youth, in particular, are suffering progressively worse employment outcomes in the country”.

4. Increase in number of forced and irregular migrants

While Nigeria’s share of international migrants is considerably smaller when compared to other Sub-Saharan African countries or when benchmarked globally, however, what is worrying is the increase in the number of forced and irregular migrants from Nigeria.

“The number of international migrants from Nigeria has increased threefold since 1990, growing from 446,806 in 1990 to 1,438,331 in 2019. Despite this, the share of international migrants as a proportion of Nigeria’s population has remained largely constant; increased slightly from 0.5 percent in 1990 to 0.7 percent in 2019.

“The recent rise in irregular migration notwithstanding, the share of international migrants in Nigeria’s population is much lower compared to the shares in Sub-Saharan Africa and globally. The share of international migrants in the Sub-Saharan African population decreased from 3 percent in 1990 to 2.5 percent in 2019 but still remains significantly higher compared to Nigeria.

“Similarly, the share of international migrants in the global population has increased steadily from 2.9 percent in 1990 to 3.5 percent in 2019. Compared to Nigeria’s structural and regional peer countries, the percentage of international migrants from Nigeria is much lower compared to what the population size would predict.

“An important trend that is observed in the data is the rise in the number of refugees and asylum seekers from Nigeria. The share of refugees and asylum seekers from Nigeria has increased drastically in the last decade, growing from 27,557 in 2010 to 408,078 in 2019. As a share of the international migrant stock, this represents a rise from 3 percent in 2010 to around seekers outside of Sub-Saharan Africa has increased steadily. Additionally, there were 2.1 internally displaced persons (IDPs) in Nigeria in 2020”.

5. More Nigerians migrate outside of Africa

Though relatively small in absolute numbers, Nigerian migrants have shown an increasing\ preference for migrating outside the continent.

“Most international migrants from Nigeria stay within Sub-Saharan Africa, but the share of international migrants to Europe and North America has increased considerably since 1990. The number of Nigerian migrants has increased in all major destination regions since 1990. However, the share of Nigerian migrants in the international migrant population has decreased in Sub-Saharan Africa and increased in Europe and North America.

“In 1990, 60 percent of migrants from Nigeria moved to other countries in Sub-Saharan Africa, compared to 20 percent and 13 percent moving to countries in Europe and North America, respectively. In 2019, the share of Nigerian migrants moving to other countries in Sub-Saharan Africa remained large (42 percent) but decreased substantially compared to 1990. On the other hand, in 2019, the share of Nigerian migrants in Europe and North America increased to 31 percent and 22 percent, respectively.

“In 2019, approximately 85 percent of all international migrants from Nigeria were concentrated in 12 destination countries in Sub-Saharan Africa, Europe, and North America. The United States, and the United Kingdom, and Cameroon had the largest number of international migrants from Nigeria in 2019. The United States and the United Kingdom also saw the largest growth in the number of Nigerian migrants from 1990 to 2019

“The majority of Nigerian refugees and asylum seekers stay within Sub-Saharan Africa. The number of Nigerian refugees and asylum seekers in Sub-Saharan Africa has increased substantially in the last decade, from 3,765 in 2010 to 285,599 in 2019. In fact, 93 percent of the Nigerian refugees and asylum seekers in Sub-Saharan Africa in 2019 were found in two countries—Cameroon and Niger. Both countries border conflict-affected regions of northern Nigeria, while Niger is also known as a transit for irregular migrants from Nigeria and other countries in the region who attempt to reach Europe through Libya.

“The number of Nigerian refugees and asylum seekers has also increased steadily in the last decade in Europe and North America. Europe hosted 81,558 Nigerian refugees and asylum seekers in 2019, with Italy, Germany, and France being the three major destination countries. Similarly, North America hosted 33,527 refugees and asylum seekers from Nigeria in 2019, with the United States and Canada accounting for almost all of them”.

6. Migration in Nigeria mostly for the well-off

The World Bank report further reveals that international migration in Nigeria is largely only accessible to well-off Nigerians from southern states.

“International migration is more prevalent in relatively prosperous southern states in Nigeria. The top 5 Nigerian states with the highest proportion of households having at least one family member as an international migrant in the last three years are all in the southern regions of Nigeria. It is not surprising that the relatively prosperous southern states report a significantly higher proportion of households with international migrants compared to the northern states. This is because international migration is costly and requires households to spend upfront capital that few households in the poorer regions of the country can afford.

“The top 10 states where the highest share of households receives international remittances are all located in the southern regions of Nigeria. Overall, around 4.2 percent of households reported receiving remittances from abroad, with this share much higher in the south compared to the north. Edo State in the southern region is a clear outlier with 25 percent of households that report receiving remittances from abroad. On average, the mean annual remittances for households that received cash and in-kind assistance from abroad amounted to N13,746 in 2018-19.

“The average annual household consumption during the same period was N236,000, which meant that the mean annual remittances amounted to around 6 percent of the mean annual consumption for households who report receiving remittances from abroad. There is, however, a significant degree of heterogeneity between states. For example, international remittances as a share of household consumption were 70 percent in Katsina, 20 percent each in Edo and Akwa-Ibom, and negligible in most of the northern states.

“The state-level data on receipt of remittances is well corroborated by looking at receipt of remittances in different consumption deciles. More than 13 percent of the households in the highest consumption decile report receiving international remittances compared to less than 3 percent each in the bottom four consumption deciles in 2018/19. In comparison, close to 30 percent of households in the lowest consumption decile and more than 56 percent in the highest consumption decile report receiving remittances from within Nigeria. What the state-level data also confirm is the global evidence on the relationship between migration and development, i.e., as places get richer, out-migration increases. As the poorer Nigerian states catch up to the richer ones in the future, international migration from Nigeria is likely to continue to increase”.

7. Cost of sending remittance from abroad too high

Staying with migration, the research paper noted that remittances from abroad
are important for Nigeria’s development, adding, however, that the cost of sending remittances to Nigeria has remained stubbornly high.

“Remittances sent by Nigerian migrants totaled more than US$25 billion in 2019, which made Nigeria the sixth highest recipient of international remittances globally. Remittances sent by international migrants have steadily increased over the last 15 years in Nigeria. In 2017, remittances to Nigeria were almost four times larger than Foreign Direct Investments (FDI) and Official Development Assistance (ODA) combined and equaled Nigeria’s oil rents contributing to nearly 6 percent of Nigeria’s GDP.

“In 2019, however, remittances fell for the first time after increasing for five consecutive years. In 2020, remittances to Nigeria declined by 27 percent as a result of COVID-19 induced economic slowdown in destination countries as well other regulatory measures implemented in the country. More than 46 percent of total remittances to Nigeria in 2017 were sent from just two destination countries, the United States and the United Kingdom, which hosted about 35 percent of all migrants from Nigeria.

“Despite the importance of remittances to the Nigerian economy, the cost of sending international remittances to Nigeria has remained high over the last decade. The cost of sending international remittances to Nigeria from Africa, Europe, and North America is well above the SDG 17.3 target of 3 percent. More remarkably, costs are higher for intra-African corridors, presumably due to burdensome regulations, lack of competition, and low financial access. Reducing the cost of sending remittances to Nigeria directly benefits Nigerian households as it provides more resources for them to invest in their households and in the economy.

8. Nigeria needs to better leverage migrations

According to findings in the World Bank report, there is an increased recognition within Nigeria on the need to better leverage regular migration for economic development as documented by the increasing number of initiatives and stakeholders working on this issue, but more can be done.

“Nigeria has made significant recent improvements to its managed migration framework and continues to draw on the support of stakeholders for policymaking and implementation.

“The National Migration Policy (NMP), adopted in 2015, provides the overarching principles for the 2014 National Policy on Labor Migration (NPLM). The NMP emphasizes the need for a national labor market assessment, regulates and monitors Private Employment Agencies (PEAs), and aims at placing a limit on the promotion of overseas employment in sectors where excessive labor migration is expected to adversely affect national economic and social development.

“The draft National Policy on Diaspora Matters (2016) views the contributions from the Diaspora as bi-directional. From the government, the policy seeks commitments to a set of identified challenges: data management on the Diaspora and remittances; the inability of the Diaspora to exercise voting rights in Nigeria; national security concerns; high remittance costs; inadequate infrastructure; agreements on avoidance of double taxation; lack of framework for the transfer of skills and technology, and a lack of integration frameworks for returnees.

“Additionally, a diverse range of stakeholders have the mandate to facilitate access to international destinations for prospective Nigerian job seekers; assist migrants in crossing necessary legal and administrative hurdles before departure; support them while in destination countries; help facilitate transfers of skills, technology, and remittances to Nigeria; and coordinate efforts to support migrants in distress as well as upon return to Nigeria. Various technical working groups (TWG) such as the Labor Migration Working Group, and the Migration Working Group offer platforms for stakeholders to come together, discuss issues, and proposed actions to improve the migration management framework”.

9. Current programs not using safe channels for overseas employment

Findings within the World Bank paper suggest that most current programs, however, are not geared towards making use of safe, orderly, and regular channels that provide overseas employment opportunities for youth.

Using a four-stage migration life cycle framework the report provided an assessment of the Federal Overseas Employment System in Nigeria.

“The first stage is pre-decision when workers decide on whether to migrate based on the understanding of the costs and benefits of migration. The second stage is pre-departure when workers who pursue the decision to migrate obtain necessary legal documents, take up measures to improve their employability (skills) and awareness, and complete logistical preparations for migration including obtaining the necessary finances to secure migration. The third stage is during migration when migrants are employed in destination countries.

“The fourth and final stage is post-return when some (but not necessarily all) migrants decide to return to Nigeria, either voluntarily or involuntarily, upon the end of the necessary legal permits to stay in destination countries. Each stage of the life-cycle framework has two aspects related to policymaking: (i) governance tools that can be used to set the terms of policies governing each stage; and (ii) programs, actions, or services that the government can perform to assist migrants at each stage”.

10. Expanding legal pathways for migration, beneficial to Nigeria

As part of suggestions on how Nigeria can benefit from international migrations, the experts urged the nation to expand legal pathways for migration and implementing supporting measures to reap dividends from current migrants in the Diaspora.

“Nigeria’s institutions are well-placed to promote managed migration approaches that help create opportunities for prospective Nigerian job seekers to find employment internationally and can be supported to help design schemes that increase the returns to human capital investments for Nigerian youth”.

According to the World Bank, there are 10 areas for consideration for policymakers, and these are structured around four thematic areas, namely “expanding legal pathways for regular migration, improving support for current migrants, strengthening institutions governing labor migration, and harnessing better data for migration policymaking”.

Each recommendation has a suggested timeframe attached to it: either short-term (6-12 months) or medium-term (1-2 years) based on the urgency of the issue and the capacity of the leading and participating agencies to carry out reforms.

“In recent years, the economic and demographic contexts have firmly highlighted the limited job opportunities in Nigeria’s domestic labor market. There is no question that the majority of Nigerian youth entering the labor market will need to be supported through domestic job creation initiatives. Current trends highlight that there are almost 3-3.5 million new job seekers entering the labor market every year in Nigeria while the annual outflow of Nigerian migrants has approximately amounted to 50,000 in the last decade or less than 2 percent of the labor market entrants in the economy every year.

“However, it is important to acknowledge the growing migratory pressures in the Nigerian economy and to recognize that managed labor migration can be one of many jobs strategies that can help unlock unrealized gains for the country’s economy.

“One consequence of inaction to the rising migratory pressure has been the increase in irregular migration to Europe which has resulted in Nigerian migrants facing not only higher economic costs but also physical and psychological abuse along the transit corridors in Niger and Libya,” the report warned.

Nevertheless, in response to the European migration crisis, several European donors have shown increased interest in the migration policy-making space in Nigeria but most resources and attention have been devoted toward strengthening border controls or creating awareness around irregular migration.

The experts noted that while those initiatives are necessary, they are not sufficient to address the challenge of irregular migration, as they overlook the economic and demographic context in which irregular migration occurs.

They state that what is needed are systems that, alongside preventing irregular migration, can facilitate safe and orderly migration to enable youths to find overseas employment and help Nigeria to benefit through remittances and transfer of skills, technology, and investments.

(Channels TV)