[By Idowu Faleye: +2348132100608]
As Nigeria commemorates another Independence Day, the country faces a persistent challenge threatening its future prosperity—youth unemployment. The reality is stark: millions of young Nigerians graduate from tertiary institutions yearly with no jobs awaiting them.
Meanwhile, the government continues to struggle with high overhead costs and inefficient public service delivery, worsened by outdated policies such as the recent push to extend the retirement age of civil servants. This move, which may seem like a small adjustment on the surface, has far-reaching consequences for the nation’s economy, workforce, and development trajectory.
The recent request by National Assembly staff to extend their retirement age reflects a deeper issue. It reveals a fear of life after retirement, and a reluctance to step into the unknown after years of public service. Unfortunately, this fear is contributing to a myriad of problems for Nigeria, including rampant corruption in an attempt to secure life after retirement, diminished job opportunities for the youth as a result of a lack of vacated positions, inefficiency in public service delivery as a result of physical and mental capacity diminish, and rising government costs as a result of compounding government’s pension and gratuity obligations.
The question is simple: why don’t government employees want to leave the service after years of enjoying salaries, allowances, bonuses, fringe benefits, and other spoils of office? The answer is complex, involving the precarious economic situation and inadequate preparation for life after service. However, raising the retirement age is not the solution—it is a policy summersault that threatens to worsen Nigeria’s economic and social woes.
Raising the retirement age beyond 60 years may seem like a practical solution to retain experienced workers, but in reality, it is a policy summersault with serious implications. The ripple effects of such a decision impact the very core of Nigeria’s workforce dynamics, creating a bottleneck that denies younger Nigerians the opportunity to contribute to the nation’s growth.
One of the most obvious outcomes of extending the retirement age is its impact on youth unemployment. Currently, Nigeria’s unemployment rate stands at an alarming 33.3%, with millions of young people unable to find jobs. By keeping older workers in the system longer, the government effectively shuts the door on younger, more energetic graduates who are eager to work and contribute. These young Nigerians are left with minimal opportunities to gain experience, earn a living, or even plan for their future. Extending the retirement age simply prolongs this tragic cycle of joblessness.
As workers age, their physical and mental capacity naturally diminishes. Studies show that older employees are more prone to chronic health issues such as hypertension and arthritis, which can limit their ability to perform efficiently. Forcing older workers to remain in service beyond their prime not only reduces productivity but also strains government resources. In the long term, this weakens public service delivery, as the energy and innovation required to solve modern problems dwindle.
Extending the retirement age compounds the government’s pension and gratuity obligations, leading to higher overhead costs. Already, the government spends a significant portion of its budget on salaries and benefits for public workers. In 2021, the Nigerian government allocated about ₦3.6 trillion for personnel costs, representing over 23% of its total budget. By extending the retirement age, this financial burden only grows, diverting funds away from critical areas like infrastructure, healthcare, and education. Reducing the retirement age instead could free up significant resources that can be redirected to national development projects.
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Rather than pushing retirement further, Nigeria needs a bold, forward-thinking solution—one that addresses youth unemployment and optimizes the nation’s workforce. A more sustainable approach would be to reduce the retirement age to 50 years and limit years of service to 25. This would bring about several positive changes that would benefit the economy and society as a whole.
Lowering the retirement age opens the door for young graduates to enter the public service, providing them with opportunities to gain experience, earn a living, and plan for their future. This influx of fresh talent would inject new energy into the workforce, driving innovation and efficiency. Younger employees are typically more adaptable and better equipped to navigate the modern, tech-driven economy. Allowing them space to contribute would significantly reduce Nigeria’s unemployment crisis while fostering a more vibrant public service.
Retiring at 50 still leaves many civil servants with the physical and mental capacity to embark on new ventures. This period could be a golden opportunity for them to leverage their gratuities and pensions as seed capital for entrepreneurial endeavours. With the right training and support, these retirees could start businesses that would not only sustain them but also create jobs for younger Nigerians. Experience gained in public service could be invaluable in managing these new ventures, whether in agriculture, retail, or manufacturing.
For instance, retirees could venture into agriculture—Nigeria’s most underexploited sector, despite its vast potential. Using their pensions to invest in agribusiness could help reduce Nigeria’s over-reliance on food imports. By starting small-scale farming or agricultural processing businesses, retirees can contribute to reducing the importation of goods like rice, sugar, or even processed foods, thereby saving Nigeria millions in foreign exchange.
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To facilitate a smoother transition into retirement, the government should implement training programs that prepare workers for post-service careers. These programs could be introduced two years before retirement, equipping employees with relevant skills aligned with their interests and societal needs. This would ensure that retirees remain productive members of society, using their talents and experience to create wealth and opportunities for others. More importantly, this approach would alleviate the pressure on government pension funds, as more retirees would become self-sufficient and contribute to the economy.
Another innovative solution lies in creating partnerships between retirees and young entrepreneurs. By pooling their resources, retirees and youth could form clusters that would manage small businesses, especially in manufacturing. Retirees bring years of administrative and managerial experience, while youths contribute energy, innovation, and the latest technological know-how. This combination could help Nigeria tap into local production and reduce reliance on imported goods.
Consider the potential impact of establishing cottage industries that focus on producing essential goods like toiletries, leather products, or agricultural products. With proper funding and support, these clusters could not only create jobs but also reduce Nigeria’s import bills. According to the National Bureau of Statistics, Nigeria imported over ₦16.95 trillion worth of goods in 2021 alone, much of which could have been produced locally. Imagine the economic transformation if retirees and youth worked together to fill this gap.
Practical Tips for Moving Forward
To address the issues discussed, here are several actionable recommendations for the government:
Reduce the Retirement Age to 50: This would allow younger graduates to enter the public sector, reducing youth unemployment and injecting new energy into the workforce.
Train Workers for Post-Retirement Careers: Introducing skill acquisition programs for public servants two years before their retirement would ensure that they have the tools necessary to remain productive post-service.
Create Youth-Retiree Partnerships: Encouraging collaborations between young entrepreneurs and retirees to establish small businesses would boost local production and reduce dependency on imports.
Shift Focus from Monthly Stipends to Skill Development: Rather than merely providing stipends to youth, the government should invest in training programs that equip them with the skills necessary for self-employment and societal contributions.
Cut Overhead Costs in Governance: The government should reduce unnecessary perks for political officeholders and channel those funds into development projects that benefit the broader population.
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By grouping retirees and young entrepreneurs into clusters, the success of these ventures becomes tied to the future and survival of each stakeholder, creating a collective sense of responsibility. This structure helps to curb the issues that typically plague government businesses in Nigeria, such as corruption, negligence, and lack of accountability. Unlike many retirees who use their pension to start businesses they are not adequately trained for—leading to failure within a few years—this model ensures that retirees remain active and productive after service years, thereby increasing their life expectancy. It also provides them with an opportunity to build a legacy for their children while significantly reducing unemployment and freeing up government resources for other crucial investments.
In sum, as Nigeria charts its course toward future prosperity, it must make tough decisions about its workforce policies. Raising the retirement age is not a sustainable solution—it exacerbates unemployment, increases government overhead costs, and stifles innovation. Instead, the government should embrace a forward-thinking approach that reduces the retirement age, empowers both youth and retirees and promotes local production. These changes will ensure that Nigeria’s workforce remains dynamic and productive while addressing the root causes of unemployment and inefficiency.
Read Also: The Devastating Impact of Rampant Corruption in Nigerian Society
By focusing on skills acquisition, youth-entrepreneurial partnerships, and a streamlined public sector, Nigeria can create a more inclusive, prosperous future for all its citizens. This Independence Day, the call for policy review is not just about economic reform; it’s about ensuring that the hopes and dreams of millions of Nigerians—both young and old—are realized.
References:
National Bureau of Statistics, Nigeria. (2021). Unemployment and Underemployment Report Q4 2020. Retrieved from www.nigerianstat.gov.ng
International Labour Organization (ILO). (2020). World Employment and Social Outlook – Trends 2020. Geneva: International Labour Office. Retrieved from www.ilo.org
World Bank Group. (2020). Nigeria Public Finance Review: Fiscal Adjustment for Better Growth and Service Delivery. Retrieved from www.worldbank.org
Economic Commission for Africa (ECA). (2021). Africa’s Youth Employment Crisis: New Approaches for Solutions. Addis Ababa: UNECA. Retrieved from www.uneca.org
African Development Bank Group (AfDB). (2019). Creating Decent Jobs: Strategies, Policies, and Instruments. Abidjan: African Development Bank. Retrieved from www.afdb.org
World Health Organization (WHO). (2018). Healthy Aging and Functional Ability: Key Policy Approaches. Geneva: WHO. Retrieved from www.who.int
Born in Ekiti State, Nigeria, Idowu Faleye is a Policy Analyst and IBM-certified Data Analyst with an academic background in Public Administration. He’s the Lead Analyst at EphraimHill Data Consult and the Publisher of EphraimHill DataBlog, which posts regular topics on issues of public interest. He can be reached via WhatsApp at +2348132100608 or email at ephraimhill01@gmail.com
© 2024 EphraimHill DC. All rights reserved.This article is the intellectual property of EphraimHill DataBlog. For permission requests, please contact EphraimHill DC at ephraimhill01@gmail.com.
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