77
Figure 4. Unemployment rates by age group and sex between 2007 and 2009
Source: National Bureau of Statistics NBS, 2010
Employment losses were especially severe in the textile industry. The collapse of the textile industry in Nigeria rendered more than 1 million farmers jobless within three years 2007-09.
46
More than 90 per cent of the textile enterprises in the country shut down, while a few others have relocated outside the country.
2. Federal Government measures implemented to recover from the crisis
Maintaining reforms and liquidity injection into the banking system …
Banking services have expanded massively in recent years the number of bank branches doubled between 2005 and mid-2009. The quality of some bank balance sheets was questioned, and the potential
contagion of the Nigerian banking system due to the detention of toxic assets became evident. The Central Bank provided liquidity through a number of monetary policy actions in order to avoid a credit crunch in the
domestic financial market table 1.
46
http:www.afriqueavenir.orgen20100312collapse-of-textile-industries-in-nigeria-causes-more-than-million-job-losses and http:allafrica.comstories201001190522.html.
0.0 10.0
20.0 30.0
40.0 50.0
Urban Rural
Urban Rural
2007 2009
15-24 25-44
45-59 60-64
0.0 10.0
20.0 30.0
40.0 50.0
60.0 70.0
Urban Rural
Total Urban
Rural Total
2007 2009
Male Female
78
Table 1. Main reduction of rates by Central Bank in per cent
7 4
: 7
8 +
C . ?
Source: Central Bank of Nigeria CBN, 2009.
Another major measure has been the establishment of the Asset Management Company of Nigeria AMCN, the aim of which was to buy up the toxic assets of the banking system in order to strengthen the
balance sheet of the banks and facilitate their lending ability to the domestic economy. The AMNC Bill was passed by the National Assembly. This measure helped to avoid the collapse of five banks representing 40
per cent of Nigeria’s bank credit with a bail-out of NGN 400 billion or 1.5 per cent of 2009 GDP Naira = Local Currency Unit in September 2009.
Wage arrears during the crisis
The federal Government and trade unions have reached common agreement over the need to restore social peace in the country and avoid strikes which could worsen the crisis situation. To that purpose, some of
the wage arrears due to workers and laid-off employees were paid using part of the fiscal stimulus. First, wage arrears were paid to Ajaokuta steel plant employees, amounting to NGN 3.32 billion. Then, after long
negotiation rounds, the Academic Staff Union of Universities obtained the settlement of NGN 21.32 billion. The Government also increased the salaries of teaching staff by 40 per cent and those of non-teaching staff,
whatever their level or weight of responsibility, by 20 per cent. The settlement of the parastatal pension arrears amounted to NGN 37.8 Billion of which NGN 9 billion was devoted to workers at NITELMTEL –the
national telecommunications company. On a less positive note, some 3, 389 workers from NITELMTEL lost their jobs, while 29 months of wage arrears were still due. On the whole, the share of the stimulus package
devoted to the settlement plans amounted to NGN 62.4 Billion or 0.02 per cent of 2009 GDP.
Infrastructure spending and sectoral measures to boost aggregate demand
In order to ensure a turnaround and quick recovery of the economy, other targeted fiscal interventions were taken. Infrastructure projects were implemented, which represented 36.4 per cent of the total stimulus
package. They included both new infrastructure and maintenance works respectively, 28 per cent and 8 per cent of the total package. The implementation of these projects aimed at bridging critical infrastructural gaps
in order to reduce the cost of doing business in Nigeria, and creating hundreds of employment opportunities.
Table 2. Infrastructure projects implemented by the federal Government
7 7
5 6
, 7 . ?
= 7
. .
7 .
7 .
Source: Federal Ministry of Finance, 2009
Other measures included in additional allocation to the cotton,
provided to the private sector, inclu GDP, and export-stimulation mea
improve the environmental sustai Development Agency of Nigeria
support the development of micro,
Empowering targeted vulne
A Conditional Cash Transfe and expanded in 2009, with an a
Poverty Eradication Plan Agency. 850 households, with the result tha
Young people also benefited supplementary support to the bud
several schemes were implemented vocational skills acquisition trainin
Development Centre which comple
Fiscal stimulus measures pu almost 1 per cent of 2009 GDP.
Figure 3. Breakdown of federal Go
Source: Federal Ministry of Fina Tax cuts ; 11.58
Additional measures to boost AD; 26.68
79
in the stimulus measures were directed at supporti on, textile and garment industry amounted to NGN 1
cluding through a VAT refund scheme N 29 billion o easures worth NGN 3 billion. Some of the export m
tainability of international trade. Also, the Small a ia SMEDAN benefited from a budget expansion o
o, small and medium enterprises in all regions of the c
lnerable population by creating job opportunities
sfer Programme “Care of the People” COPE was additional allocation of NGN 300 million to the
cy. This measure, which is targeted at the poorest ho hat 30,000 children were able to attend primary schoo
ited from the stimulus measures with an allocation of udget of the National Directorate for Employment.
ted such as the Vocational Skills Development Prog ining for unemployed school leavers and drop-outs, o
pleted the training of 6, 505 males and 2, 993 females put forward by the federal Government have reached
Government fiscal stimulus measures
inance 2009. Labour market
measures; 25.25
Transfers to income; 0.
Infrastructur spending; 36.3
rting specific sectors. An N 10 billion. Support was
n or 0.01 per cent of 2009 rt measures also aimed to
l and Medium Enterprise n of NGN 400 million to
e country.
as launched in late 2007, e budget of the National
households, supported 8, ool.
of half a billion Naira as nt. With these resources,
rogramme which provided s, or the Entrepreneurship
les by March 2009. ed NGN 250.48 billion or
rket 5.25
rs to low ; 0.12
cture 36.37
80
3. Challenges
