Tackling Unemployment with e-Commerce

TECH DIGEST – The rising rate of unemployment in Nigeria can be addressed through e-commerce, writes Emma Okonji

Nigeria is currently mired in the throes of a worsening unemployment tide. The situation is so bad that out of every three Nigerians one of them is unemployed, according to current statistics.

Precisely, Nigeria’s unemployment profile currently stands at about 33.3 per cent, according to the latest statistics released by the National Bureau of Statistics (NBS).

The report, which was released last month showed that Nigeria’s unemployment rate rose from 27.1 per cent in the second quarter of 2020 to 33.3 per cent in the fourth quarter of 2020, which translated to about 23.19 million unemployed Nigerians, This does not take into account millions of underemployed Nigerians.

According to NBS report, “During the reference period, the computed national unemployment rate rose from 27.1 per cent in Q2, 2020 to 33.3 per cent in Q4, 2020, while the underemployment rate decreased from 28.6 per cent to 22.8 per cent. A combination of both the unemployment and underemployment rate for the reference period gave a figure of 56.1 per cent.

“This means that 33.3 per cent of the labour force in Nigeria or 23,187,389 persons either did nothing or worked for less than 20 hours a week; making them unemployed by our definition in Nigeria. This is an additional 1,422,772 persons from the number in that category in Q2, 2020. Using the international definition of unemployment, the rate was computed to be 17.5 per cent.”

Many analysts and commentators have posited that government alone cannot solve the unemployment challenges, despite its status as the biggest employer of labour. Indeed, the overwhelming position is that 21st Century economies are built on the spirit of private enterprise, with government expected to support and provide the enabling environment for the private sector to thrive, and in so doing unleash the power of entrepreneurship in creating more employment opportunities for the teeming youth population.

e-Commerce

The foregoing calls to mind the yet-untapped potential of the e-Commerce sector in reversing Nigeria’s disastrous unemployment profile and specifically, the laudable efforts of e-Commerce companies like Konga, Jumia and others.

Konga is a Nigerian-owned player, which has defied a myriad of hurdles and challenges in operating environment.

Most likely, Konga is possibly the largest employer of quality human capital in Nigeria in the next five years and may be the highest single tax payer if given a chance to survive by government during this incubation period.

According to Dr. Hassan Kuja, an economist, “Having taken a critical look at the Nigerian e-Commerce sector in the course of my academic thesis, I remain convinced that if Nigeria had at least three other entities as dedicated to the empowerment of the Nigerian youth as Konga, we would be telling a different story in terms of our current unemployment nightmare for our brilliant youth population.”

Konga runs a fusion of online and offline retail which has delivered so much value to Nigerians, employment-wise. The management of the company, which came under new ownership in 2018, has hardly hidden its desire to saturate every nook and cranny of Nigeria with its presence, by citing at least one Konga store in each local government in the country.

Going by the current number of local governments in Nigeria, the e-Commerce company is looking at a whopping 774 physical stores – a very ambitious project by any stretch of the imagination. Already, Konga is on its way to achieving this feat, which would make it arguably the biggest employer of labour in Nigeria.

Even with the number of stores powered by technology it has at the moment across various states in Nigeria, Konga is creating direct and indirect employment opportunities for thousands of Nigerians. These stores are manned by Nigerians through and through,  with Konga also particularly embracing the policy of employing indigenous members of the community/states in each of its store locations.

Logistics

To its credit, Konga also runs its own internally-owned logistics company through which many have secured gainful employment, with a huge number of staff and other essential delivery personnel regularly being employed to manage Konga’s growing fleet of trucks, buses, cars and motorcycles. This is not to mention other existing subsidiaries within the Konga group including its CBN-licensed mobile money platform, KongaPay and online travel agency, Konga Travel which has created massive opportunities for many.

In July 2020, Konga relaunched YUBOSS, its reseller scheme under the new name – Konga Affiliate. Through this scheme, Konga extended an offer of creative employment to millions of smart unemployed and under-employed Nigerians, by giving them an opportunity to earn unlimited income by partnering with the company. The initiative further offers successful affiliates, some of whom reside in unreached and under-served parts of the country, a chance to rise through the ranks and become part owner of a Konga franchise store.

There is no doubt that very few organizations in Nigeria can provide such opportunities for correcting the worrisome unemployment statistics staring us in the face.

Till date, Konga has nurtured thousands of digital netizens in its never-stopping conveyor line, with many of them eventually taking their skills to other foreign countries – Germany, Canada, Russia, among many others, all of whom have come to rely on and feed off Konga’s supply line of digital talents.

Government support

Given the potential of Konga in creating jobs and boosting the Nigerian economy, Kuja is of the opinion that the federal and state governments should consider partnership with Konga.

“Despite being an economist, I take an avid interest in e-Commerce, which remains, in my opinion, a futuristic sector that has the capacity to bring Nigeria shoulder-to-shoulder with the rest of the advanced world. “However, a deep understanding of the immense economic power of e-Commerce, lacking as it is, on the part of political office holders in Nigeria, is one of the major leadership deficits we endure here. This is one of the reasons why leaders in Nigeria have consistently failed to leverage the immense employment-generating potential of an e-Commerce engine such as Konga,” Kuja said.

According to him, in the United States and other advanced economies, governments have taken advantage of the sheer power of e-Commerce in empowering its citizens.

“To bring this reality into stark relief, let’s compare some figures from a global e-Commerce standpoint. Amazon, headquartered in the United States remains the world’s biggest e-Commerce platform. Its founder, Jeff Bezos has occupied and still jostles for the position of the world’s richest man.

“He is presently in second position after Tesla’s Elon Musk. The stock of Amazon has more than quintupled over the last five years, catapulting Bezos from a mere multibillionaire to the world’s first centi-billionaire and, later, the first person worth more than $200 billion.

“Amazon enjoys tax breaks from the United States government.Asian giant, Alibaba had 117,600 employees as at March 2020 but it has also seen its staff strength rise significantly, especially during the lockdown. Even in the face of a recent fallout between its founder, Jack Ma and the Chinese government, Alibaba still enjoys the confidence of the government and the Chinese people,” Kuja said.

 

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