Essay about Unemployment in South Africa

Abstract

This study seeks to understand both Nigeria and South Africa’s respective unemployment situations. This study discusses what factors can contribute to the consistent disparity between South Africa and Nigeria’s unemployment rates. In this research, various possible factors are considered, including an underdeveloped agricultural sector, a lack of quality education, and a lack of accessibility to jobs. This proposal also seeks to better understand why Nigeria’s unemployment rate seems to have been steadily climbing over the past five years. In a broader sense, this proposal aims to understand what causes unemployment to better understand possible solutions to unemployment and lessen the poverty that follows as a result of high unemployment rates.

Introduction

Nigeria and South Africa are two very similar countries, with both nations boasting the top-performing economies in Africa. However, for countries so economically similar, both South Africa and Nigeria have had drastically different unemployment rates for the past five years at least. While South Africa has had consistently high unemployment rates, Nigeria’s unemployment rates have been comparatively lower. Stranger still, Nigeria’s unemployment rate has been steadily increasing, and yet, even at the height of its ascension it has still maintained a consistently lower unemployment rate than South Africa, as shown by Figures 1 and 2:

This research proposal aims to investigate what factors lead to the unemployment rate disparity between Nigeria and South Africa. I begin to go about this task by first describing the works from which I derived my data in a literature review. I will then describe the model that my research leads me to believe is the most justifiable and hypothesize about how the said model can effect change within South Africa and Nigeria. I will then go on to explain why I selected South Africa and Nigeria for this case study, and I will describe the benefits and flaws inherent in this comparison. Finally, I will close with my final thoughts on this study, describing not only why this study is important, but how it could be continued and improved in the future.

Literature Review

There were many possible explanations for the differing employment rates between Nigeria and South Africa. Unemployment in and of itself is a difficult phenomenon to explain due to the various possible cultural, economic, and political factors that can lead to it. Within the various scholarly discussions about the subject, there seemed to be three main schools of thought that explained the disparity. The first school of thought, which from this point on will be referred to as the Agricultural school, believed that unemployment within the nation of South Africa was a direct result of their poorly developed agricultural sector and that the comparatively low unemployment rates in Nigeria can be attributed to their better developed agricultural sector. The second school of thought, which will be referred to as the Educational school, posited that South Africa’s unemployment rates were the result of a poorly developed education system and that Nigeria’s unemployment has slowly been increasing due to a similarly poor educational system. Finally, the last school of thought, which will be referred to as the Labor school, identifies an incompatible labor supply and demand as the culprit for South Africa’s unemployment situation and the development of a similar situation in Nigeria as the cause of its slowly increasing unemployment rates.

Agriculture

The agricultural school can be summarized as holding a poorly developed agricultural sector responsible for South Africa’s unemployment and a well-developed agricultural sector responsible for Nigeria’s lack of unemployment. This school of thought was supported by information from the CIA’s World Factbook. The database provided useful information about GDP composition by sector, enabling a more comprehensive analysis and comparison of the two country’s agricultural sectors.

The information provided by the CIA makes it clear that, in terms of the sophistication of their agricultural sectors, Nigeria is much more developed than South Africa.

Author O.E. Ayinde (2008) provided a lens through which to interpret this data in her article Empirical Analysis of Agricultural Growth and Unemployment in Nigeria stating that “Unemployment is a result of the inability to develop and utilize the nation’s manpower resources effectively, especially in the rural sector” (p.465). Ayinde argues throughout her article that increased growth in Nigeria’s agricultural sector could likely alleviate the country’s growing unemployment, attributing the country’s comparatively low unemployment rates to its already marginally more developed agricultural sector. According to Ayinde (2008), in countries with large rural populations, like Nigeria (and by extension South Africa) “agricultural growth rate has an inverse relationship with unemployment” (p.465). This article suggests possible validity for the agricultural school.

Education

Within the educational school of thought, scholars argued that historically unequal access to education brought on by apartheid, as well as poor quality of education, is responsible for South Africa’s high unemployment rates. Nigeria, in comparison, is plagued only by a poor quality of education allowing it to have lower (albeit steadily rising) unemployment rates than South Africa.

A newsletter by the South African Department of Communications (n.d.) provides a firm basis for the educational school, citing data that suggests that “the deliberate exclusion of black people from the educational system…under apartheid contributed to high rates of unemployment today” (Possible Root Causes, para. 2). The report also states that “[i]nadequate education and lack of productivity is costing jobs. Unemployment increases progressively with decreased educational levels, and the education system is not producing the skills for the labor market,” (Possible Root Causes, para.3) further supporting the claim that South Africa suffers from a simultaneous lack of quality education and lack of equal access to education.

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Nigeria, in comparison, understandably lacks South Africa’s racial history and, therefore only really struggles with providing a quality education. According to Poverty and Rate of Unemployment in Nigeria, an article written by Adebobola Olotu, Rafiu Salami, and Igbayemi Akeremale(2015), Nigeria has been struggling to provide their students with an education that makes them attractive to employers, stating that “[i]neffective educational quality, inadequate job skill and training are shortcomings militating against [the] productive sector of [the] Nigerian economy, [and the] private sector [is] not willing to recruit Nigerian graduates because of insufficient knowledge and experience”(p. 3). The Nigerian economic system is struggling to sufficiently prepare students to enter the workforce and this may explain why their unemployment rates are slowly increasing.

Labor

Within the labor school of thought, scholars argue that unemployment within both countries is being driven by a sudden oversupply of willing laborers within a market that has not yet developed an equally high demand for them. The article Poverty and Rate of Unemployment in Nigeria (ibid.) presents a simple explanation for the oversupply of workers in Nigeria, stating that an unprecedented amount of educated workers looking for work has been produced “as a result of the sharp increase in the tertiary institution turnout” (p. 2). Simply put there has been a sharp increase in higher education graduates within Nigeria, and the sudden increase in educated individuals was not mirrored by an increased need for labor, resulting in a high rate of unemployment. As to why so many new people were suddenly attending and graduating from “tertiary institutions” in Nigeria, research presented numerous explanations, the most compelling of which was a mass migration of aspiring workers from rural to urban areas.

In comparison, South Africa experienced a similar increase in laborers, however for very different reasons. While the situation in Nigeria was motivated mainly by a sudden increase in educated individuals as a likely result of rural-to-urban migration, the labor increase situation in South Africa can once again be explained by its history of discrimination. According to the South African Department of Communications (n.d.), South Africa was prevented from accessing the full potential of its workforce until 1995 due to the “deliberate exclusion of black people…from skilled occupations under apartheid” (Possible Root Causes, para. 2). Since South Africa has a majority black population, it makes sense that, with the change in laws, many of the black citizens who had formerly been denied work would be entering the job market that had now been opened to them. While this sudden influx of workers bears many similarities to the influx that occurred in Nigeria, its most notable difference is that this sudden increase in workers involved a majority of the country suddenly being allowed to enter a workforce that had previously been closed to them, and thus a more extreme level of unemployment is to be expected in such a situation.

Model and Hypothesis

According to my research, the most justifiable model would be the model presented in the labor school of thought. I hypothesize that the volume of new workers being introduced to the job market influences unemployment rates, more specifically, when new labor is introduced in too high a volume at any one time within a country, said country’s unemployment rate increases as a result. A country needs time for its job market to adapt to new workers and so a gradual introduction of new workers would better maintain low unemployment rates. This hypothesis also attributes South Africa’s high unemployment rates to the high volume of new workers that the end of apartheid suddenly introduced to the South African job market. Had this introduction been more gradual perhaps South Africa would have had lower unemployment rates today. This hypothesis also attributes Nigeria’s growing unemployment rates to the growing number of students being produced by Nigerian schools to transition into the workforce. Compared to South Africa’s sudden transition out of apartheid, the gradual pace at which Nigeria’s schools are producing more aspiring workers explains why Nigeria has a low unemployment rate compared to South Africa.

Research Design

This research focuses on comparing the unemployment rates of Nigeria and South Africa. These specific countries were chosen for their economic similarities, with both countries being among the top economies in Africa. Furthermore, both countries share major urban demographics. According to the Central Intelligence Agency’s World Factbook Database (2018), 50.3% of Nigeria’s population lives in urban areas (People and Society Nigeria) while 66.4% of South Africa’s population live in urban areas (People and Society South Africa). Finally, both countries share similar population demographics between ages 15 and 54, with 59.29% of South Africa’s population falling within said interval and 50.25% of Nigeria’s population falling within the interval (ibid.). This age structure is especially important because it is the interval between which individuals are most likely to be seeking employment, and thus this similarity allowed me to more accurately judge whether any differences between the two countries correlated to their low or high unemployment rates.

Of course, many complications arise when trying to compare two extremely large nations. For one thing, the population of Nigeria (203,452,505) is more than three times the size of the population of South Africa (55,380,210), making it slightly more difficult to accurately compare the two (ibid.). Furthermore, both countries are geographically dissimilar, with Nigeria being located much farther north than South Africa. This difference in location may create unseen geographic variables that are difficult to measure and could, thus, skew the results of my research. Finally, very little historical information is available on Nigeria’s past unemployment rates, limiting my research and leading me to narrow down the scope of my study to a period of 5 years before the present day.

The strategy I used to evaluate the validity of the various arguments I came across was a system of information synthesis, analysis/comparison, and reasoning. To begin I gathered as much information as possible about unemployment in South Africa and Nigeria. This included general information and demographics on both countries (most of which was gathered from the CIA World Factbook Database), and various scholarly articles and essays discussing unemployment rates within both countries. After learning as much as possible about the employment situations within both countries, I analyzed the data that I had gathered, looking for major similarities and differences between the two countries that might explain why they have consistently differed so greatly in their unemployment rates. Finally, I used reasoning to ascertain which school of thought best explained the employment phenomenon occurring within both countries, taking into consideration factors such as which schools had the largest volume of supporting data, and which schools gave the most complete explanations (with “complete explanation” in this case meaning depicted the most direct correlation between their school of thought and South Africa and Nigeria’s unemployment disparity). While this method of assessment is partially subjective (and therefore biased) it is virtually impossible to test any theory in real-time, and thus gaining a deep understanding of the situations within both countries and comparing them is the best that can be done at present.

Discussion

All in all, the labor school seems to have been the most justifiable school of thought. The labor school of thought provides a viable explanation for both South Africa’s comparatively high unemployment rate and Nigeria’s steadily rising unemployment rate. South Africa’s history of apartheid involved introducing an extremely large number of new workers to the labor force abruptly thus resulting in its historically high unemployment rates. Nigeria did not have such an abrupt change in its labor force and thus was able to maintain comparatively low unemployment rates, however, increased urbanization within Nigeria explains why Nigeria’s unemployment rates have been slowly increasing. The amount of aspiring workers is increasing much like it did in South Africa, but in a much less abrupt fashion.

This research is important simply because growing or high unemployment rates always lead to growing or high poverty rates. The very state of being unemployed necessitates that said unemployed person has no means through which to provide themselves and, as a result, often must rely on outside forces like government agencies to live. Poverty places people’s lives in danger since it often makes it difficult for them to procure the resources necessary to survive. In this way, unemployment can be a matter of life and death. Understanding what factors cause unemployment within a country can aid researchers in understanding how to alleviate both unemployment and poverty.

If I were to continue this research it would likely be helpful to make predictions about the two countries' unemployment rates based on each school of thought, that way it would be easier to pinpoint whether or not there is any real correlation between the listed factors. Perhaps widening the scope of the research to other economically and demographically similar countries in Africa could provide a more comprehensive understanding of which factors influence unemployment in either country.