Nigeria has been identified as one developing economy where a large and growing working age population will help drive economic growth. This was revealed in a 2014 report on Nigeria’s Renewal: Delivering Inclusive Growth in Africa’s Largest Economy, by the McKinsey Global Institute (MGI) and McKinsey’s Nigeria office.
While advanced economies especially in Europe are experiencing declining and aging populations, and may continue to suffer this demographic deficit, thus a decreasing number of young working age persons, Nigeria and other emerging economies would remain the frontier human capital markets because of huge and growing working age populations.
The Report states that by 2030 the number of Nigerians of working age (15-64) will be up to 50 per cent higher than today. It further states that ‘’at current labour participation rates (56 per cent), that demographic dividend could add 0.8 per cent per year to GDP.” It is useful to recall that in the 1980s China relied on its demographic dividend to drive economic growth. Brazil benefitted from same demographic dividend to grow its economy in the 1990s.
Similarly the International Labor Organization’s (ILO, 2011) population growth rate projections for the next 15 years reveals that the working-age population is projected to decrease in Europe and grow in North America . This implies that the growth of the global workforce will be driven by Asia, Latin America and Africa. However, sub-Saharan Africa is predicted to have the fastest growth. Thus in 2030 according to ILO projections sub-Saharan Africa will have a working-age population of 793 million people – a 70 percent rise from the current 466 million.
The crucial challenge facing Nigeria is how to ensure that her huge and growing working age population acquires the proper skills that would enhance their productivity and the overall productivity of the economy. If this does not happen, and fast, there are fears that Nigeria risks future social upheaval the likes of what occurred among restive unemployed Arab youths in France in 2005.
With more than 35 million Nigerian adults not being able to read or write, and a situation where “more than two-thirds of federal civil service employees have only a high school education or less, and less than 5 per cent have modern computer skills” as reported in the McKinsey Report, the need for an effective skills formation strategy is imperative and urgent.
In recent years Nigeria’s employers have decried the poor work skills of the growing army of products from the country’s troubled tertiary education system, a system once glorified but which has steadily fallen into turbulence and disrepute.
Analysts confirm that it is the quality of Nigeria’s human capital that will position Nigeria, Africa’s largest economy (with a GDP of $510 billion) for stable growth rather than the singular profusion of working age population.