Lagos Employment Summit: Apprenticeship, skills lead recovery pathways

Sopuruchi Onwuka

Traditional apprenticeship and set-up packages as currently practiced in business clusters in Nigeria can become plausible strategies in addressing high failure rate among millions of small businesses that create over 80 percent of employment in the country.  

The recommendation which formed part of outcomes of the two-day job summit hosted by the Lagos State Employment Trust Fund (LSETF) aligns with the declaration by Vice President Yomi Osinbajo that the Igbo apprenticeship model remains most popular way to build wealth in Nigeria.

At the Lagos Employment Summit, speakers and panelists drew attention to yawning skills gap in the Nigerian labour market, fatal impact of the coronavirus pandemic on small businesses, and high failure rate of new business start ups as the key drivers of high unemployment rate in the country.

According to official statistics, youth unemployment in Nigeria has reached disturbing 42.5 percent with annual growth rate of 3.2 percent. Total unemployment rate is at record 33.3 percent.

Senior Economic Adviser, UNDP, Dr Amarakoon Bandara, noted that 55 percent of pre-pandemic youth population was neither unemployed nor fully employed.

Specifically for Lagos State, unemployment rate surpassed national average at over 37 percent with youth unemployment rising close to 50 percent.

Chairman of Lagos State Employment Trust Fund (LSETF), Ms Bola Adesola, explained that unemployment rate in the state has continued to surge above national average due to steady inflow of young people whose skills do not fit into the emerging demands in the markets.

She pointed at the devastating impact of the coronavirus pandemic on small businesses as the key factor for massive unemployment arising from reduced capacity of the informal sector to demand labour.

 Also speaking on the role of the pandemic in the prevailing employment crisis in the country, Head of Augusto Consulting, Mr Jimi Ogbobine, who delivered a presentation on earlier study on survival strength of small businesses, declared that MSMEs which he said form 96 percent of businesses in Nigeria and drive employment fell vulnerable to disruptions wreaked by the COVID-19 pandemic.

Mr Ogbobine said many of the small enterprises are yet to recover from the pandemic downturn due to factors that include currency depreciation, galloping inflation, falling income, financial liquidity crisis, infrastructure deficits and regulatory risks.

Post pandemic economy surfs digital boards

Mr Ogbobine lamented that COVID-19 reversed the testimony of informal businesses, explaining that most of the small businesses face survival run from emerging post pandemic normal of e-commerce, social media marketing, and budget cuts across the economy.

He said the focus of post pandemic intervention programmes was on restoring the small businesses on the path of sustainable recovery and solid growth. He added that the regulatory process to also migrate to electronic platforms and afford enterprises the ease of processes.

Governor Babajide Sanwo-Olu stated that all models of job creation, including small business start-ups, have become urgent in addressing the alarming 42.5 national youth unemployment rate in the country. He said Lagos government has remained relentless in developing facilities and sundry infrastructure to support businesses that create jobs and enhance productivity.

He pointed at rising skills gaps, low business success rates and steady influx of unskilled youths as the key drivers of rising unemployment in the state.

Director of Africa Growth Initiative at Brookings Institute, Mr Aloysius Uche Ordu, declared in a virtual address at the event that Africa is recovering well from the pandemic recession, with Sub-Saharan Africa posting growth projection of 3.5 percent in the 2022-2023 period.

He however noted that the Africa’s impressive recovery rate happens in smaller economies as bigger economies including Nigeria form the laggards in the recovery race.

In casting outlook into the future, Mr Ordu made it clear that the youth dominated businesses would form the future of the African economy, pointing out that the Yaba technology hub in Lagos State is a great symbol of the potentials stored up in the youths. He noted that investing in the youths would transform them into greater resource and prepare them for the challenges of the future.

Also in a keynote presentation, the Country Manager of International Finance Corporation (IFC), Mr Kalim Sha, noted that some 70 million Nigerians remain unemployed, adding that that the number would swell if the number of underemployed is added. He described the situation as critical index of the state of the economy, explaining that economic growth is directly connected to job creation.

Speakers at Lagos Employment Summit agreed that unemployment among youths in the country is worsened by changing demands in the labour market where, according to them, businesses are repositioning on digital platforms. They pointed at sharp misalignment of demand and supply in the labour market, stressing that technical, digital and soft skills still remain in high demand in a market flooded by unskilled labour.

They identified challenges in the employment crisis to include effective stimulation of micro, small and medium enterprises; filling skills gap through alternative education methods that emphasize technical, vocational training and repository learning; as well as arresting the high attrition rate of small business start ups in the country.  

Tweaking education to address skills deficit

In addressing the identified challenges, Governor Sanwo-Olu of Lagos State declared the need for the education sector to redesign national post primary and tertiary curriculum to equip school leavers with skills that would make them relevant in the emerging digital economy, adding that new investments are required in building digitally empowered workforce.

To align skills with the demands of the labour market, the governor said, the Lagos State government is re-examining the education system with a view of redesigning the curriculum and providing digital learning tools for comprehensive learning skills at pre-tertiary education levels.

Mr Sanwo-Olu added that Lagos State has secured licenses for a University of Science and Technology and a University of Education as part of investments in upgrading the skills and knowledge that would make graduates fit into the emerging demand trends in the labour market.

Executive Director of Fate Foundation, Ms Adenike Adeyemi, who moderated a panel session on “Innovative and Inclusive Job Creation Strategies Post the COVID-19 Pandemic,” stated that climate change, digital literacy and green economy drive the prevailing global market. She pointed out that the current realities demand that private sector be involved in designing education curricula. 

CEO of FUZU, Mr Jussi Hinkkanen, stated that deepening the local agricultural sector could create huge demand for entry level skills. He added that deliberately creating demand entry level skills has become critical for the emerging labour market which he said is sector driven, soft skill demanding and digitally propelled.

Team Leader S4P-N, Ms Sybil Ferris, stressed that education and training models must align with market demands, pointing out that current efforts mistakenly build innovation and digital skills into traditional education curriculum. 

She canvassed a tripartite synergy among public, private and civil society for a national apprenticeship model which, she opined, must recognize the needs of different groups of trained applicants.

Executive Director at VFD Group, Mr Adeniyi Adenubi, pointed at large skills gap in the market as evidence that most applicants lack the expertise required for emerging businesses.

Project Lead, Impact Investors’ Foundation, Ms Etemore Glover, pointed out that poor funding of education in the country has worked against the goals of the Universal Basic Education (UBE) which, she said, provides the opportunity for curriculum design for early child education. The situation, according to her, contributes to 30 percent failure in early education for children in the country.

She called for collective responsibility, learning and partnership in addressing misalignment between skills supply and demand.

In recommending technical and vocational skills as the veritable tools for self employment, Head of Employability at LSETF, Mr Christian Kaelin, noted that self employment rate of vocational trainees remains high.

Mr Kaelin called for sustainable structures for technical education, pointing out that Nigeria’s education system evolved from the background of developing clerical manpower for colonial administration.

He said that technical and vocational schools in the country have been weak and slow in development, thus suboptimal in producing skills for technical services.

 Another set of panellists recommended the Lagos State model of technical and vocational education for national adaptation.

Head of Projects at GIZ-Skye, Mr Tobias Wolfgarten, made it clear that TVET is critical for any country seeking to bridge skills gap in medium level technical skills in order to drive economic development.

Lagos State Commissioner for Education, In her contribution, Mrs Folashade Afisayo provided a long list of technical and vocational training opportunities in the education system of Lagos State. She told panellists that Lagos State government provides training programmes from primary, secondary, comprehensive, technical schools and vocational training centers.

In noting that technical schools are overwhelmed by demand because of limited investments in informal education, She declared that Lagos State government would build 50 additional comprehensive schools and also upgrade vocational training centers for school age children in the state, with objective to address observed high rate of attrition in the schools. She added that the efforts were paying off with improvement in WAEC performance from previous 39 percent success rate to 75 percent.

She declared that Lagos State sponsored technical and Vocational Education and Training (TVET) beneficiaries are not only prepared for employment but are actually given jobs in addition to government sponsored starter packages worth N3 million each. She said the programme was deliberately made attractive to dispel the impression that alternative education models are designed form dull students. She said vocationally inclined children are actually differently able to learn practically.    

In a presentation, the Team Lead, Skills for Prosperity –Nigerian (S4P-N), Ms Sybil Ferris, pointed out that structures for formal education do not have capacity for large number of Nigerian youths. She made it clear that alternation skills are also less attractive because they are employed in low wage informal sector.

She introduced Recognition of Prior Learning (RPL) as critical method to recognize and value skills of unqualified but competent workers. She said skills acquired through years of constant practice in a particular kind of job equip the worker with unassailable competencies.

Ms Ferris pointed out that RPL makes competencies visible, reduces cost and time of training and transitions the candidate rapidly to employment.  She called for alternative education models that offer quick wins in preparing candidates for immediate job placement.

Senior Human Resource Business Partner at Nestle Plc, Mrs Foluke Jaiyesola, called for standardization and certification of vocational training in Nigeria to build and improve the labour value of vocational graduates.  

Head of People Transformation Practice at Phillips Consulting, Mr Olawanle Moronikeji, there should be a centralized certification agency for validation of certificates from registered vocational training centers around the country. He also called for database and platform for monitoring skills demand in the market.

The panel called on private sector to come together and support vocational trainers as the credible pathway to recruiting skilled labour and reducing cost.

In a separate panel session, Professor Sunday Abayomi Adebisi of Enterprise Hub and Strategic Management at the University of Lagos, painted a picture of ever widening gap between large numbers of job seekers churned out from numerous universities in Nigeria on the one hand and thinning conventional employment opening in the country.

He said while the labour market welcomes 2.5 million graduates every year, only 50,000 out of estimated 500,000 from each university in the country get jobs every five years.  

Prof Adebisi recommended that every course of study in Nigerian universities should be given entrepreneurial orientation, saying the best path to dealing with unemployment is to support enterprises.

Laying fertile ground for MSMEs

While most agencies of government, international development agencies, civil society organizations, labour organizations and private consulting firms brandish differing figures on Nigerian unemployment situation, they converge on the common conclusion that the country faces ticking time bomb with its high rate of youth unemployment.

Another common position among all analysts is that government and formal sector lack the capacity to resolve the growing number of unemployed youths who, according to discernible data, still lack the right set if skills to either compete in the emerging digital marketplace and also have little or no resources to build own enterprises.

Panellists at the Lagos Employment Summit determined that laying congenial regulatory, fiscal and infrastructural environment would enhance small business start-ups, engage greater number of youths in innovative businesses and crate new breed of tax payers for the government.

They made it clear that post pandemic recovery would be based on gig economy which relies on clusters if small businesses that share facilities and infrestrucre under a fiscal cradle shield that incubate enterprises to success.

Figures shared at the conference showed that approximately 40 million MSMEs generate over 50 percent of the Nigerian gross domestic product (GDP), account for 86 percent private employment but suffer the highest attrition rate.               The high failure rate is attributed to harsh regulatory and fiscal environment as government agencies deviate into intensive revenue drive.

The Interim Country Director at Technoserve Nigeria, Mrs Ayokanmi Ayuba,  stated that fighting poverty and unemployment must begin with helping people start up small businesses generate income.

She said efforts must focus on assisting micro-enterprises across the country with facilities and advisory services that help them scale up their businesses.

In a plenary session on “The Role or Regulation and Ease of Doing Business in reviving employment,” panellists called on regulators to be business enablers and groom businesses that would logically grow into payer of taxes to government.

They warned that regulatory authorities must stop stifling businesses and causing job losses, stressing that employment only comes with creating a vibrant economy that demands labour.

Delegates called for regulation that should be able to attract foreign direct investments (FDIs), encourage scalability and trigger employment generation.

The summit also demanded regulatory coverage of all new areas of business startups, with a clear and unified regulatory and payment system that addresses multiple taxation and oversight.

Managing Partner of TNP, Mr Baba Alakolaro noted that new normal of e-trade emerged in the pandemic period to push over 50 percent of MSMEs in the country off their foundation, pointing out that the fiscal and regulatory environment must be programmed to allow ailing businesses recover and scale up.

The Special Assistant to the Governor of Lagos State on Sustainable Development Goals, Ms Solape Hammond, said the solution for unemployment in the country calls for policy environment that supports the investment community through ease of doing business programmes. He made it clear that regulation and operating environment could help restore life to micro enterprises.

Also speaking the Special Adviser to the President on Ease of Doing Business, Dr Jumoke Oduwole, said federal government was bringing states to deepen policies that promote businesses across the country. She added that part of the plan was to harmonize regulations across all tiers of government to ease the business environment.

In contributing, the Chief Executive Officer of the Nigerian Economic Summit Group (NESG), Mr Olaoye Jaiyeola, decried apparent distrust between public and private sector players on implementation of policies and programmes in economic development. He noted that political exigencies prevent government from taking tough but necessary decisions.

Mr Jaiyeola pointed at discrepancies in position between government and private partners and blamed the situation on reactionary nature of government programmes at periods the private sector is intentional on the plan to achieve specified goals.

Head of Intelligence at Stears, Mr Michael Famoroti, declared in his contribution that regulators in the economy perceive business start ups as cash cows, saying that new businesses are exploited rather assisted in the local regulatory environment. The fear of exploitation by regulators, he pointed out, force start-ups into the mistake of building in silence rather than engaging the government.

He described the impact of regulators on business start-ups as stifling, pointing out that the regulatory environment should and must encourage businesses to scale.

He lamented that only 70,000 out of 40 million small businesses in Nigeria employ up to 10 people. The micro nature of businesses in the country, according to him, limits their capacity to deliver adequate value to the domestic economy.

Inability of the local regulatory regimes to groom young businesses, according to him, explains the reason the economy is import dependent. 

Mr Niyi Adeniyi of VFD called for robust engagement on regulation. He made it clear that employment only comes with creating a vibrant economy that demands labour.

He informed the delegates that venture capitals search for businesses that innovate traditional plays: fintech, agritech, healthtech, edutech and e-commerce. He pointed at large skills gap in the market as most applicants lack the expertise required for emerging businesses.

The Igbo apprenticeship scheme and gig economy

From Harvard University School of Business to Lagos Business School, business incubation conferences and employment summits, the traditional apprenticeship model mainly used by Igbo businessmen of Southern Nigeria has been recognized as a full composite training model that delivers skills acquisition, enterprise incubation, business mentoring and startup grooming.

Even the Vice President, Prof Yomi Osinbajo, described the model as credible enterprise incubator strategy that puts the country on global venture map.

In his address at a business seminar hosted by Anambra Broadcasting Service (ABS) and the local chapter of the Organized Private Sector (OPS) in Awka, Vice President Osinbajo noted that the Igbo apprenticeship scheme has become the most popular indigenous Nigerian economic institution, globally recognized as the world’s largest business incubator.

Prof. Osinbajo’s endorsement of the business incubation model followed separate and unrelated discussions on the traditional apprenticeship and other skills and business mentorship methods that are capable of Nigeria addressing skill s gaps, small business failures and rising unemployment among youths in the country.

The high success rate of businesses established through the Igbo apprenticeship model draws from its combination of several startup strategies that commit big businesses assist small ones grow.

The Igbo apprenticeship, according to our enquiry revolves around traditional kinship wealth distribution policy that requires the operator of an already thriving business empire to takes full responsibility in firmly establishing his apprentice by providing full training, startup, mentorship and grooming tenure.

The Oracle Today reports that the traditional apprenticeship is not peculiar to the Igbo. It is a cross tribal business grooming practice that is traditional to groups across the three major sections of the country, including the Yoruba and Hausa. However, the Igbo model stands out with its start-up package and sustained grooming benefit for the mentee.

According to Dr Henrietta Onwuegbuzie who anchored a panel discussion on the Nigerian apprenticeship model in closing employment gaps in the economy, the Yoruba trainers charge money to train their apprentices and have no responsibility for the trainee afterwards. The Hausa imparts business skills into his mentee by permitting collocation of business sites and allowing soft competition.

The Igbo apprenticeship model, according to Dr Onwuegbuzie, subjects the trainee to long period of training and service to the master who is mandatorily obligated to impart the apprentice with all trade skills and also provide him with start-up packages. Thereafter, the Igbo master continues to mentor his business progeny into success.

The scheme also stands out among the list of strategies for job creation as it combines skills acquisition, startup packages, business mentorship, enterprise grooming and sustained exposure to network of referral patronages.

The advantages of the Igbo apprenticeship scheme include creating business startup models that are resilient to market turbulence and economic instability.

However, panelists at the Lagos job summit see the model in urgent need of modernization for it to remain the veritable startup strategy with nearly 100 percent success rate.

In a case study of apprenticeship scheme, the Founder and CEO of COOP, Mr Kalani Leifer, stated that the model provides a credible route out of the regrettable 90 percent failure rate of startups in the Nigerian economy.

With over responsibility for over 80 percent of total employment in the economy, Mr leifer noted that resolving startup failure in the country would open a floodgate of job opportunities through the MSMEs.With nearly 100 percent success rate, he said, the apprenticeship scheme has proved a reliable model for adoption into business start up strategies.

He however raised concern that the apprenticeship scheme has become seriously challenged with various kinds of abuse and changing business practices, including e-commerce.

Director of Entrepreneurship Innovation at Lagos Business School, Pan-Atlantic University (PAU), Dr Henrietta Onwuegbuzie, stated that every section of the Nigerian society has its own traditional version of the apprenticeship scheme as credible and effective method of standing young entrepreneurs on solid footing.

She said however that the advent of online retail and digital literacy has created major challenge for the apprenticeship model, requiring current market players to be innovative in their businesses through the acquisition of functional skills.

Founder of Africa NXT, Mr. Obi Asika, stated in his contribution that current apprenticeship scheme has lost a major link and requires startups still using the model to acquire additional skills in grabbing a space online.

He said that the scheme stresses the values of the Nigerian people, adding that the scheme should be reformed, recreated, formalized and introduced into the educational system.

The apprenticeship model, according to several speakers and presenters, has recorded more start up success rate than any known business start-up model in challenging environments as in Africa where access to capital and other means of production are in acute deficit.

However, with digital platforms, orange and gig economy now dominating the space, concerns are focused now on how to inject innovation into the apprenticeship scheme to make it competitive in the post pandemic landscape.