INTRODUCTION
1.1 Background to the study
As history would have it, Nigeria as a nation has experienced several forms of economic, political and social unrest. In recent times unemployment which is caused by individual and government force had joined the list of the social evils, we experience in Nigeria today. The issue of unemployment has become a world-wide phenomenon demanding for increased attention, though the impact is more devasting in developing nation (Wamu Konya 2003). Unemployment or jobless occur when people who are without jobs and they are actively sought out for work within the past few weeks (international labour organization 1982 ;fajana 2000). However, the number of people in any country is divided into two groups, the economically active group and the ineconomically active group. According to Njoku and Ihugba (2011), the economically active group (labour forces) are the groups that are willing are able to work, including those who are actively engaged in the production of goods and services (employed) and those who are not employed on the other hand , the economically active group refer to neither people who are not looking for jobs nor those who are not capacity enough as a result of health related issues. To further buttress this definition unemployment as the number of the economically active population who are without job but available and seeking for work including people who have lost their job and those who have voluntary left work ( world bank 1998)
Official figures from the bureau of statistics put the figure of unemployment at 1970 percent about 30 million, but this figure this did not include about 40 million other Nigeria youth captured in the world bank statistic in 2009. By implication, it means that if Nigeria population is 140 million, then 50% of Nigerians are unemployed. We can conclude from this information above that unemployment rate pose a serious threat to Nigeria economy and can have a devastating impact on people live. It affects not just the unemployed people but also family members and the whole economy. In fact (Yesufu 2005) said in Nigeria, unemployment is growing at associate degree frightful proportion rendering seventy percentof the youthjobless. This downside is exeberated as establishment of learning are turning out large numbers of graduates yearly without job opportunities within the labor market .This troop of idle youths parading all the major street seeking for jobs is alarming, thereby constituting socio economic issue to the society.
Aside from representing a massive waste of country’s work force resources, the incidence of unemployment in the country has led to the upsurge of crime, social and political tension like cultism, stickup, whoredom, thuggery, white plague, among other as also supported by Iyoha (2002), obadan and odusola (2005) as they also stated that unemployment breeds social vices as well as reduces national output and financial gain it erodes human capital, causes misery poverty, social unrest and despair for the idle and with resultant effect on the economic process. However, for many years, diverse programs have been formulated and implemented by past and present government to deal with the menace some of which are: National economic management and Development strategy (NEEDS), National directorate of employment and more, hence the unemployment rate continues to remain threatful to the nation.
It is against this background that this study seek to evaluate the causes, the effects and possibly proffer way forward in tackling the problems of unemployment in Nigeria.
Several studies were examined in the literature review to focus on effect of unemployment on economic growth among which are owanchuku (2015) Akiri, Okunakpo and Anebi-Atede (2016) Sibusiso(2018) Despite the fact that unemployment is claimed to have an impact on economic growth and development it is vital to check dynamic relationship that existence between them.
We also made use of Okunlaw in the theoretical frame work to explain or study the relationship between unemployment level. In the most basic form Okunlaw investigate the statistical relationship between a country's unemployment rate and the growth rate of its economy.
1.2. Statement of the problem
The level of unemployment in Nigeria has grown large that it’s cannot be addressed by mere campaign or words of the world at large to formulate a lasting solutionto it. Unemployment in Nigeria has affect the youth and the economic development of the country from a broad spectrum of socio economic perspective. It’s obvious that unemployment especially that of graduate impede Nigeria’s progress in several ways. Apart from the economic waste it brought to the nation, it also constitute political unrest for the country (Ipaye 1998). According to Ezie (2012), the unemployment situation in Nigeria is disturbing and even more disheartening that the country economic situation cannot absorb an optimal proportion of it’slabour force. This situation has contributed to the increase in crime and other social vice experienced in our society in recent times because an idle mind is always the devil workshop.
A cursory look at the unemployment and economic growth trend of Nigeria shows that high unemployment hinder growth. They range from increase government expenditure, giving industrialist tax holiday to encourage industrialization and even the use of monetary policy instrument such as reducing commercial bank lending rate to encourage investment through borrowing.
Recently, the idea of self-employment (entrepreneurship) is gaining popularity. The government encourage by giving young entrepreneurship funds to start up their business. Despite all these efforts, unemployment continues to be on the increase and hinder growth. It is against this background that seek to investigate how the it effect of unemployment on economic growth. In order to proffer solutions as to how to accelerate the rate of growth of the Nigeria economy.
1.3. Research Question ( the following researched question will be adopted)
1. What is the trend of unemployment rate and economic growth in Nigeria?
2. How does unemployment affect economic growth in Nigeria.
1.4. Objectives of the study
The broad objective of the study is to examine the effect of unemployment on economic output, The specific objectives are;
1. To Examine the trend of unemployment and economic growth in Nigeria.
2. To determine the effect of unemployment on economic output in Nigeria from 1986 to 2018.
1 .5. Research Hypothesis
The relevant research Hypothesis for this study is expressed as:
1. Unemployment rate has no significant effect on economic output in Nigeria.
2. Unemployment rate has significant effect on economic output in Nigeria.
1.6. Significance of the study
The study will provide econometric base upon which to examine the effect of unemployment on the Nigeria economy which will be useful to Nigeria as a whole.
The study will add to intellectual value of Nigerians. The knowledge of the effect of unemployment will be very useful as it will broaden individual outlook, sharpen their intellectual and inculcate in them a habit of balanced thinking. The study will also educate the government and youth who ignored entrepreneurship in pursuit of white collar jobs in the office.
The outcome of the study will be immense benefit to policymakers, such as government and it’s agencies in providing a platform for designing favorable government policies that will be consistent with the Nigeria economic environment. Beside resolving the theoretical debates providing empirical evidence on impact of unemployment on the Nigeria economy will help in formulating government policies that will enhance growth couple with development. Undoubtedly, understanding the impact of unemployment and economic output forms the first basic step in designing appropriate government in the country.
1.7 Sources of Data and Basic Methodology
Primary source is an account of an event by a researcher at a time while secondary source is that which is written about the past from the point of view of a future date. Secondary source is needed because the study employed the use of secondary data,that is about the past. The study utilized secondary data from relevant textbooks, journal and central bank of Nigeria (CBN) statistical bulletin.
The study employed both qualitative and descriptive analysis techniques.The qualitative analysis ws carried out through the use of ordinary least square (OLS) regression while the descriptive analysis was used to access the trend pattern of government capital spending vis-a-vis economic growth in Nigeria. There are use of graphs and tables.
1.8 Limitation of the study
It is worthy to note that every research work possess a lot of problems and limitations. However the difficulties encountered includes, inadequate and unavailability of relevant data owing to the fact that unemployment in most developing countries, Nigeria inclusively is not evenly distributed and thus varies from a place to another, financial constraint, high cost of transportation and the difficulty in locating the various research material needed. As such, I will have to rely more on secondary data than primary data.
1.9 Operational Definition of Term
Unemployment:Unemployment is a situation in which those who are able and willing to work at the prevailing wage rate do not find job. According to the International Labour Organisation (ILO), only those belonging to the age group of 15 to 65 years should be included in the labour force of a country. Unemployment may also be defined as the gap between potential full employment and the number of employed persons.
Economic Growth and Development:economic growth and development is often measured by gross domestic products. It is conceptualized as increase of an economy’s capacity to produce goods and services needed to improve the welfare of the country’s citizens.
Gross Domestic product (GDP) : This is the market value of the final goods and services produced within the economy at a given period of time.
Government Expenditure : This refers to money spent by public sector on the acquisition of goods and provision of services such as education, health care, social protection and defense.
Investment : This is the value of fixed capital assets ( plus stock ) produced in an economy over a period of time. It refers to the creation of capital goods.
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