Skills supply and skills demand in the Nigerian economy

Mark Talmage-Rostron
05.12.2022·10 min read

Diversity in Nigeria not only relates to various cultures, but also the wide range of industries that are crying out for top talent with the skills necessary to occupy crucial jobs required to keep the economy with the highest GDP in Africa going.

Think about Nigeria and what do you associate the country with? For some it’s Nollywood, Nigeria’s burgeoning film industry and the second largest in the world. For others it is the technology sector, the fastest growing in the country. For many it’s the oil industry, the number one industry that Nigeria is famous for.

Information and Communications Technology
With the Nigerian digital revolution is full swing, it is not surprising that the sector contributes about 18.4% to the country’s GDP.

Banking
Banking employs over 95,000 people across the country with the number of bank accounts adding up to $133.5 million dollars.

Healthcare
Government expenditure on healthcare is rising yearly and is forecast to contribute $2.3 million to the country’s GDP.

Utilities
Nigeria has 23 power generating plants connected to the national grid and as of the second quarter of 2022 contributed around $2.25 million to the country’s GDP.

Consumer Goods
In 2019 FMCG was one of the largest sectors of the Nigerian economy and contributed about 5% to the country’s GDP.

Oil and Gas
Nigeria is Africa’s main oil producer employing about 69.54 million people and contributes around 6.7% to the country’s GDP.

Entertainment
The Entertainment segment in Nigeria divided into music and film is projected to grow by 7.07% between 2022 and 2026. In 2026 is thought that the industry will contribute US$6.26m to the country’s GDP.

Agriculture
With the demise of Zimbabwe’s agricultural industry, Nigeria is now widely regarded as the breadbasket of Africa, contributing about 23.36% to the country’s GDP.

Construction
Looking at how the Lagos skyline is sprawling; it is not surprising that the construction industry is currently worth $16.9 million and contributes more than 10% to the country’s GDP.

Hospitality and Tourism
Including rain forests, savannah, waterfalls, and other natural attractions, the tourism industry employs 2.6 million people in Nigeria, is forecast to reach $3.4 billion by 2026, and contributes 2.8% to the country’s GDP.

Do Nigerian graduates have the necessary skills to succeed?

It can be safe to say that for the last eight months, or more, the Nigerian higher education sector has been left in tatters thanks to a series of ongoing strikes by lecturers. This has left many prospective students looking to start their higher learning tenure out in the wilderness, and those already in the system, having to watch on as their graduation dates stretch further away.

That said, the overriding question should be, are the Nigerian Universities, when they are running, sufficiently equipping students with the necessary skills required to succeed on the global stage?

In an interview with The Guardian, Mrs. Rachel Borland, Principal of DLD College, London, formerly principal of a leading school in Lagos State and Abaju is not convinced. She maintains that Nigerian University graduates are not developed enough in their critical thinking skills. She also pointed out that the other challenge for most Nigerian students is access to forex, leading to parents having to seek flexible payment plans to send their children to an internationally accredited university.

These challenges, amongst others, are leading to a great many of these frustrated and disenfranchised prospective students to lean more towards online education at progressive universities such as Nexford University.

Nexford prioritizes skills-based learning over theory to ensure that learners come out the other side with critical skills and competencies. To allow learners to get there and ensure that they remain in higher education, at Nexford they can pay for their tuition monthly and because the university is 100% online, they will never have to contend with lecturer strikes.

Should Nigerian’s prioritize skills over theory-based education?

Worryingly for all employees looking to build a career in various sectors of the Nigerian workplace, a skills gap survey showed that vacancies exist in four sectors of the economy, namely Services, Agriculture, Construction and Transportation. Of even more concern is that in many instances these jobs are being filled by non-Nigerians as companies become frustrated with the lack of skills of local talent.

Considering that, universities need to move away from theory-based education and lean more toward competency-based learning, as without crucial skills, Nigerians will be left behind in jobs of the future.

According to the World Economic Forum’s Future of Jobs Report 2020, data entry clerks, accountants, auditors, financial analysts, relationship managers and human resource specialists, will be joining the unemployment lines, whilst their counterparts that have taken the time to skill themselves in data analytics, Artificial Intelligence, machine learning, project management, robotics, fintech and software development will be highly employable.

Damilola Adewale, a Lagos-based economic analyst noted that if the skills gap in Nigeria is not solved, it might be a case where most jobs will not only be lost to non-Nigerians, but also to technology that can easily and effectively do the job at hand.

1. Information Communications Technology
Africa is now a massive hotbed for tech entrepreneurs and Nigeria is seemingly leading the charge. Currently, the country is home to the second-best Ruby developers in the world and has become Africa’s biggest source of VC investment for tech startups. With $109 million in startup investments in 2016 alone, some refer to Nigeria as “Silicon Savannah” – a rising power in the tech world.

Not surprising really as at last count, Information and Communications Technology (ICT) contributed 18.44% to Nigeria’s real GDP in the second quarter of 2022.

According to the National Bureau of Statistics, the ICT sector is composed of four activities – Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording and Music Production; and Broadcasting. The sector’s growth was driven largely by activities in the telecommunications sub-sector, which contributed 9.49% to the GDP.

2. Construction
The Nigeria construction market size was $127.7 billion in 2021 and is expected to grow by 3.2% annually between 2021 and 2025.

The industry is booming but without the necessary skilled workers, it may go into decline. Nigeria requires the services of skilled workforce on construction sites; the nation is developing with a growing population and attendant housing needs. At present, the demand for skilled workforces such as bricklayers, carpenters, plumbers, painters, amongst others; is far above supply.

3. Customer Care
We know that an organization’s job is not done and dusted after a product or service is sold. In fact, many would agree that it is just beginning. The future of customer service is always changing, so staying up to date can give organizations a competitive edge.

Driving modern customer care is artificial Intelligence, virtual and augmented reality, intelligent voice assistants and the internet of things. Those workers skilled in these up-and-coming technologies will be able to secure top jobs in the industry. Nigeria is quickly emerging as an ideal location for the delivery of business process, customer experience and contact centre outsourced services to the global and domestic markets.

4. Agriculture
With over 36% of the overall workforce in Nigeria employed by the agriculture sector, it still holds the top spot as its largest employer. In 2020, the sector contributed 22% of its GDP.

Based on Jobberman analysis, the agricultural sector is set to remain on course as one of the leading employers in the country. That being the case, something needs to be done to fill highly specialized roles such as agro-processing and farm operations; generalist roles such as agricultural extension services, project management and accounting; and specialized tech roles such as equipment and machine operations, software management, and social media management.

However, if young people want to benefit from this opportunity, they will need to develop these necessary skills and abilities to move into these higher paying jobs within the sector.

5. Financial Sector
At last count it was found that Nigeria is currently the largest financial market in Africa and plays a significant role in the country’s growth and is critical to the development of the economy. Banks and other financial institutions excluding insurance, contributed $1.56 million to the nation’s real Gross Domestic Product, GDP, in first quarter of 2021 (Q1’21), up by 3.35% from the corresponding period of 2021 (Q1’21).

Although the sector continues to be a burgeoning local industry, the mass exodus of tech talent from the country is leaving big gaps. Those that stay and procure the necessary tech skills will be able to have their pick of jobs.

6. Transportation
Everyone needs to get around right? For people to get around using motorised transportation, modern transportation requires qualified people to run it. The transportation services industry in Nigeria, which consists of air, marine, rail and road freight sectors had total revenues of $5,111.7m in 2019, representing a compound annual growth rate (CAGR) of 5.8% between 2015 and 2019. In 2020 the sector was valued at $6.9 billion.

Although the sector is booming and has been touted as being the most critical to drive large scale economic growth, it is still not living up to its potential. This can in some ways be put down to a lack of government investment, but some experts put it down to inadequate capacities in terms of skilled labour needed to operate and run main transportation facilities, largely attributable to low funding, training, and re-training.

Skills mismatches

The future looks bright for the Nigerian economy and for employees who are working tirelessly to grow key industries and put the country on the map for international investment. Plausible, provided that the extent of skills mismatches be reduced from 60.6% as it currently stands, down to a far more acceptable level.

So, who is to blame for these skills mismatches amongst the Nigerian workforces? Some would put it down to poor training in companies, whilst a survey commissioned by ResearchGate lays the blame squarely at the door of local Universities. This lack of activity is not only damaging the economy but is also reducing the employability and productivity of thousands of graduates looking to enter the workforce.

The survey goes on to say that the key skills that companies are looking for and that graduates are not brining to the table reads like a shopping list. They include analytical and critical thinking, communication, entrepreneurial, decision making, IT, interpersonal, problem-solving, self-directed and numeracy skills.

Experts have gone on to say that not only are the standards of traditional local universities slipping in Nigeria, but that too many of them are emphasizing theory and ignoring the importance of practical training. Teaching just theory is not doing the trick and means too many students are entering the job market half-baked.

This problem must be addressed and quickly or Nigeria’s quest to become one of the 20 leading economies by the end of 2022 will go up in flames.

Online learning has the propensity to close the skills gap in Nigeria

For many the traditional higher learning model is outdated and failing. Lecturer strikes have plagued the progress of students over the course of 2022 and experts believe that the curriculum has not kept pace with student and employer demands.

In a 2020 survey commissioned by InstinctHub, it was found that 71.6% of Nigerian students wanted a flexible combination of both online and onsite learning which demonstrated that they would rather spend fewer hours a week learning new skills. Flexible and online learning are two areas that Nexford University has in abundance.

At Nexford, Nigerian learners can learn where they want, when they want on virtually any device. They can fit their learning around their work schedule, allowing them to learn and earn. Programs are also 100% online so learners don’t have to travel outside of Nigeria to earn an accredited American degree.

Across the globe, learners and graduates have taken advantage of this opportunity to learn on their terms and graduate with the skills necessary to make their mark at global organizations. Nexford University’s mission is to enable greater social and economic mobility across the world by providing learners access to high-quality, affordable, dynamic online education that prepares them for the global workplace.

 

Get a flexible, affordable, American-made MBA and supercharge your career, download our brochure or book a call with our Nexford Application Specialists!

About the Author

Mark Talmage-Rostron

Mark is a college graduate with Honours in Copywriting. He is the Content Marketing Manager at Nexford, creating engaging, thought-provoking, and action-oriented content.

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