The Impact of Economic Growth on Employment in Nigeria.docVIP

The Impact of Economic Growth on Employment in Nigeria 　　[a] Ph.D.， Al-Hikmah University， Ilorin， Nigeria. 　　*Corresponding author. 　　Received 1 January 2013； accepted 14 February 2013 　　Abstract 　　Nigeria has enjoyed a long period of sustained economic growth since 2001 and yet， there is rampant unemployment in the country. There are various studies that have supported that growth is a pathway to employment. Thus， this paper investigated the impact the economic growth in Nigeria had on employment generation. The Johansen vector- Error correction model was used in the investigation. The findings revealed that， although economic growth had positive relationship with employment， the relationship is not significant. Foreign private investment has negative impact while Public expenditure has positive and significant impact on employment. It is concluded that the growth in Nigeria does not support employment. The paper recommended that， growth in the economy can support employment if the government gear expenditure towards areas like labour intensive Industry that can create more employment. 　　Key words： Public expenditure； Economic growth； Decent work 　　INTRODUCTION 　　Since 2001， Nigeria has enjoyed a long period of sustained expansion of the non-oil economy， with growth occurring across all sectors of the economy and accelerating at about 7%. This growth rate increased to about 8-9% in 2003 despite the financial crisis. This has more than doubled the growth rate in the country prior to 1999. Even in the wake of the global financial crisis in 2009， Nigeria’s growth performance fell only to about 4.5 percent. This， according to Ajakaiye and Fakiyesi （2009） has been attributed to the rapid growth rate in the non-oil export. The development of the non-oil economy was in contrast to that of the oil economy， whose contribution has been declining owing to unrest in the Niger Delta. However， an investigation by the World Bank （2009） has revealed that the pattern of