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ABSTRACT

The study examined the impact of unemployment and inflation on the economy of Nigeria. Relevant literature was reviewed in chapter two to fill the existing gaps in the area of study. It was deduced that scanty studies have been done in this line of research. In chapter three, it was stated that the study employed the descriptive survey design in conjunction with the stratified sampling technique to select 100 staff in Ministry of Finance, Lagos. A well-structured questionnaire was used to collect data from the respondents. The data obtained were analyzed using the descriptive statistic technique and the chi-squared technique was adopted to test the two stated hypotheses. The study revealed: The social effects of unemployment and inflation are significant on the Nigerian economy. The economic effects of unemployment and inflation are significant on the Nigerian economy. The political effects of unemployment are significant on the Nigerian economy. The study hereby conclude that The study hereby conclude that there is social, economic, and political effect of unemployment and inflation on Nigeria economy within the  time frame. The study hereby suggested; The harmonization of monetary and fiscal policy, vocational education and low or the absence of interest on loans to young graduates, the diversification of the economy and the provision of key economic infrastructure; Emphasis should be made to curb the surging rate of unemployment by making dedicated efforts to put in place labour intensive method of production instead of concentrating on capital intensive methods which will eliminate jobs that can be done by individuals; There must be concrete efforts to ensure that our porous borders are well managed to forestall leakages which is very pivotal for the reduction of unemployment and inflation; thereby improving the level of local production; The need by the government and relevant agencies to formulate policies to encourage self-employment and reduce cost of doing business in the country so as to achieve a high, rapid and sustained economic growth; There is need to formulate policies to ensure relative price stability which may likely improve the welfare of Nigerians; More effort should be channel toward reducing unemployment than stabilizing prices.

CHAPTER ONE

INTRODUCTION

1.1         Background to the Study

Unemployment is a common phenomenon in the global economy. It is a major challenge bedeviling developing economies from attaining economic development (Raheem, 2009; Nwokwu, 2015). Developed economies are also bedeviled with the challenge of unemployment, although in little magnitude.  The state of unemployment intensifies the needs of those who are willing to get job but unable to find one (Sulaimon, 2015). Unemployment occurs as a result of the inadequacy of jobs failing to correspond with growing population. Those who are employed sometimes develop the fear of being unemployed as a result of job insecurity and employee retrenchment due to poor demand for labour especially in recessionary situation (Akiri, 2016). Unemployment can be linked to any productive factors which is idle and improperly utilized for maximum productivity. With respect to labour, enthusiastic to work (Anyanwu, 2010). Unemployment can be classified in two forms namely voluntary and involuntary. Voluntary unemployment connotes the situation when there are available jobs when an individual chooses not to work because he has means of support or aspiring for a better job with higher remuneration. On the other hand, involuntary unemployment exists when individuals who are able and willing to work at the ongoing wage rate cannot find decent jobs. Unemployment has been regarded as an economic monster and hinders social and economic progress in a country. Unemployment indicates wastage of human resources of a country. Unemployment results in reduced productivity thereby leading to lower income and standard of living (Raheem, 2009). One of the major concerns of successive governments in Nigeria is the rising rate of unemployment in the country. Reducing unemployment to the barest minimum has been the policy focus of the government over the years. Omotosho (2009) averred that the soaring trend of employment and output of South-east Asian countries, especially the Asian Tigers is attributable to their impressive economic performance. The absence of such necessary economic blueprint to boost employment and productivity in Nigeria is the chief cause of unemployment in Nigeria (Sulaimon, 2015). The problem of unemployment in Nigeria going unabated and there is a likelihood of it growing correspondingly with the high rate of unemployed persons per annum. 

Looking at the trend of unemployment in African economies, Nwokwu (2013) observed three causes of unemployment which are poor quality of education, the choice of technology which can be either be labour or capital intensive and inadequate attention to capital. The use of machines to replace work done by labour and technological advancement has contributed to the problem of unemployment. The trend of unemployment in Nigeria has adverse effect on the youths and the entire community. A notable feature of unemployment in Nigeria is that it was more severe in the early 1980s than any other period (Akiri, 2016). The major factor that contributes to the poor living standard in developing countries is inefficient utilization of labour relative to advanced countries. Adebayo and Ogunriola (2012) observed that unemployment trend in Nigeria affects job seekers within the ages of 20-24 and 25- 44 years more while there is less prevalence of unemployment on people between 15-19 years, 55-59 years and 65 years and above. This indicates that unemployment has severe impact on young Nigerian graduates. Unemployment does not only impede economic progress, but also social progress. Unemployment fuels political instability and constitute a multidimensional problem and its threat has been regarded as a key developmental challenge facing the country. Unemployment has been acknowledged as a major hindrance to sustainable development in virtually all developing countries. Unemployment reduces the total productivity of an economy and represents poor utilization of manpower resources. The task of reducing the unemployment has been one of the main policy targets of developing countries. The issue of real output and employment in developing nations is indispensable for poverty alleviation and equitable distribution of income and wealth (Omotor & Gbosi, 2006).