Jennifer Martins gets up every morning before the sun rises to prepare a large amount of rice and beans for customers who are requesting catering services.
She said that her employer had paid her N135,000 before the outbreak of coronavirus.
However, this year she has fallen further into the red due to a 35% reduction in her remunerations. Her manager recounts the woes of small and medium-sized businesses that account for 96% of Nigeria’s businesses and 87.9% of the jobs.
Martins is often tempted to quit her job as a caterer. However, there are not many opportunities for Martins in Africa’s largest economic region.
She is concerned that her fellow graduate students will fall further into poverty and be trapped there for longer periods of time, perpetuating the vicious cycle of poverty.
The Small and Medium Enterprises Development Agency of Nigeria, in collaboration with the National Bureau of Statistics, published a new survey that confirms her fears. It includes a detailed list of small business performance in Africa’s largest nation.
The survey revealed that 1 percent were paid between N50,000-N100,000. While 1.9 percent received more than N100,000. Approximately 94 percent of microenterprises paid less than N50,000 in wages and salaries for 2019 and 2020.
“Before COVID, we had informal jobs in the N115,000 to N145,000 range depending on where and what type of job. We are unable to find N70,000-plus jobs in informal sectors. Tunde Ademola is an operating officer at Page Financials in Lagos.
This has made it an employer’s marketplace, rendering workers practically powerless to negotiate and demand better terms.
Martins and her cohort have to work 10-hour days, which leaves Martins little time to explore the few opportunities she has.
BusinessDay spoke out to say that “the challenge is that you barely get the time to search for a new job elsewhere.”
Since decades, Nigeria’s labor market has suffered from underemployment. However, it is particularly prevalent in the informal sector.
Muda Yusuf (immediate past director-general of LCCI), stated that there are more informal businesses because of the ease of entry and exit as well as low capital requirements, the ability to borrow from family and friends and not having to deal directly with regulatory authorities.
Nigeria’s official unemployment rate soared to 33.3 per cent, which means that 23 million Nigerians are now unemployed. This is equivalent to the combined population of Singapore and the Netherlands.
More than half of the country’s 70 million workers were either unemployed or working part-time jobs at the end last year.
“Any discussion about structure and proper business administration will be considered rocket science by many, so they choose to stay informal,” Jovita Mgeme, CEO of Pundit Bookkeeping Services.
According to NBS and SMEDAN findings, 64.5 per cent of Nigerian micro-enterprises have a monthly turnover less than N50,000. The remaining 29.4 percent have an income between N50,000 and N300,000.
The report’s executive summary stated that the most detrimental government policies to businesses were High Fuel price, High Taxes and High Electricity Tariff. It also cited the high-interest rate and high fuel prices.
Mogeme stated that “most businesses also need to generate most infrastructures like power and water themselves.”
Nigeria experienced its worst recession in more than 40 years, with its economy shrinking by 6.1% and 3.6% respectively in the last quarters of 2020.
After a long period of falling inflation, the country’s annual rate of inflation rose to 15.63percent in December.
Yusuf, former chief told BusinessDay at LCCI, said that small businesses pay very low salaries because of this.
President Muhammadu Buhari claims that his government has lifted 10,000,000 Nigerians from poverty. The World Bank estimates that 7 million Nigerians were poorer under Buhari’s leadership in 2020.
According to a 2015 World Bank, the inadequacy in Nigeria’s job opportunities is “at the heart of high poverty levels and regional inequality as well as social and political unrest”
A job means receiving a wage, living at a minimum standard of life, and having some social security, such as health insurance and pensions.
Since 2015, Nigeria’s economy has been in a grueling freefall. Since 2015, Nigeria’s economy has been in a shambolic freefall. This is due to a mix of unsavory fiscal policies from a government that is more interested in handing out petty money as social welfare schemes to boost growth, taxing an expanding economic base to access funds and a highly ridiculed monetary policy regime by the Central Bank that has woefully failed in financial stability for over six years.
Buhari replied to a question about Nigeria’s unemployment rate by saying, “All I know is that people have to be able to access their farms.”