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Konga, e-commerce and 23 million unemployed Nigerians

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, writes Dr. Hassan Kuja, an economist

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Unemployment

Nigeria is currently mired in the throes of a worsening unemployment tide. As you read this, the situation is so bad that out of every three Nigerians you encounter, one of them is unemployed. Numbers wise, Nigeria’s unemployment profile currently stands at about 33.3%.

The data above is backed up the latest statistics released by the National Bureau of Statistics (NBS). The report released on Monday, March 15, 2021 Monday, March 15, makes for grim reading. It 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.

Nigeria’s unemployment rate

In layman terms, the foregoing translates to about 23.19 million unemployed people and this does not take into account millions of underemployed Nigerians.

Part of the NBS report reads as follows: “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.”

But this is not the full picture of the worrisome unemployment trend in Nigeria.

Nigeria now boasts the unenviable status of being the country with the second highest unemployment rate in the world, second only to fellow African country, Namibia, which has the world’s highest unemployment statistic with 33.4 per cent. In achieving this unwanted feat, Nigeria recently surpassed South Africa on a list of 82 countries whose unemployment rates are tracked by Bloomberg.

Meanwhile, the situation seems to be headed for an even more worrisome trajectory, with the nation’s fast growing population expected to see Nigeria become the third most populous country in the world by 2050, with over 300 million people. This is according to projections by the United Nations. Also, economists and other experts expect Nigeria’s unemployment profile to soon overtake that of Namibia and become the world’s highest.

The prediction is premised on the fact that more people are expected to join the labour market as population growth continues to outpace output expansion in Nigeria and as more graduates join the list of those eligible to work.

In the middle of this doom and gloom, many analysts and other commentators have posited that government alone cannot solve the unemployment conundrum, 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.

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The foregoing calls to mind the yet-untapped potentialities of the e-Commerce sector in reversing Nigeria’s disastrous unemployment profile and specifically, the laudable efforts of a company like Konga, a worldclass Nigerian-owned player which has defied a myriad of hurdles and challenges that come with operating in a difficult terrain like Nigeria.

ecommerce

ecommerce

I visualize a company like konga to be possibly the largest employer of quality human capital in Nigeria with the next five years and may be the highest single tax payer if given a chance to survive by government during this incubation period. Things have changed globally and our government and policy makers must pay attention and support companies like konga that shall alter the destiny of Nigerians in the very near future. It is clear the current owners have shown in a short period that they are not infants and have the required passion and capacity in the market place. Let me use Konga to explain the new economy:

In Konga, Nigeria has a gem that has provided a lifeline for many families and still continues to create a host of employment opportunities, despite building up its own infrastructure and with little or no institutional support.

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, we are 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 which currently stands at less than 50, 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.

To its credit, the company 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.

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In July 2020, the media was awash with news that Konga had 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.

Also, in Konga, Nigeria boasts a world-class platform that has continued to incubate and nurture the country’s growing army of tech developers, creative artists and other digital natives. With an in-house tech structure that can rival that of any blue-chip company in the world, Konga provides a fitting ground where many of Nigeria’s talented but restive youths find expression in exhibiting their digital skills and influencing the growth of the fintech and other allied sectors with their apps and other inventions. 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.

Why has the Federal Government of Nigeria, or the Chief Executives of various state governments, not for once considered partnering with Konga even for the selfish interest of empowering citizens of their own states, you may ask?

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.

But it is time to wake up and smell the coffee!

As highlighted earlier, government alone cannot solve Nigeria’s unemployment challenge. This is where tested and trusted, tech-driven, ethical platforms such as Konga comes in or other Nigerian-focused companies, especially those that can do more with a little institutional support.

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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. This is in spite of the fact that Bezos lost a significant portion of his net worth after his divorce in 2019, which left his ex-wife MacKenzie Scott with around 25% of their Amazon holdings. Amazon enjoys tax breaks from the United States government.

During the lockdown occasioned by the COVID-19 pandemic, Amazon reportedly employed over 100,000 Americans as it positioned itself as an ‘essential’ service during the pandemic, serving the needs of needy Americans who required essential supplies such as food, groceries, meds and other gadgets delivered to them in the safety of their homes.

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.

In the case of Konga, my enquiries from the company’s executive management revealed that the lockdown posed a tough period for its business with a well-publicised series of restrictions from the government. Through it all, the management insisted none of its staff would be sacked and even embarked on a nationwide campaign to feed thousands of families using its staff for two weeks as its own form of palliatives.

Nigeria’s unemployment outlook is dire but a lot can be done, if only we can leverage the power of e-Commerce and an established, world-class structure such as Konga.

Konga retail store

Konga retail store in Ibadan

As Dr. B.B Usman stated: ‘‘This is why regional e-Commerce economic platform blocs like Alibaba, Konga, and others are emerging to demonstrate that the analogue economic model is dead, especially in the face of digital transformation. Digital economy is here and Africa must empower her e-Commerce entrepreneurs; not only with litmus packages, but by granting them 10-year tax holiday to fast track the creation of youth employment; while boosting regional wealth.’’

Now is the time to act and reverse the future of millions of hopeless Nigerian youths!

*Dr. Hassan Kuja, an economist, writes from Taraba

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  1. Pingback: Konga, E-commerce And 23 Million Unemployed Nigerians | Techvalley

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