The Influence of the Deregulated Tele-Communication Sector on Urban Employment Generation in Nigeria

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Research Journal of Social Sciences, 5: 1-6, 2010 © 2010, INSInet Publication

The Influence of the Deregulated Tele-communication Sector on Urban Employment Generation in Nigeria. Mrs. M.M. Fasoranti (Ph.D) Department of Economics, Adekunle Ajasin University, Akunba-akoko, Ondo State, Nigeria Abstract: The study examined employment generation through the deregulated telecommunication sector. The study which was conducted in Lagos metropolis among other things considered the socio-economic characteristic of GSM operators, the profitability and efficiency of GSM operations and the influence of some selected macro economic variables on income generated from the business. Data was sourced from both secondary and primary sources. Information was elicited from 80 respondents randomly selected from Mushin and Oshodi – Isolo within Lagos. The data collected was analysed with the aid of descriptive statistics, Gross margin and Net return analysis and multiple regression analysis. Findings show that majority of operators were educated youth with a mean age of about 29 years. Moreover, about 71.3% of total respondents were jobless before the inception of the GSM business. This shows that deregulation has actually reduced youth unemployment in the study area. Study also showed that GSM operation was profitable both in the short and long runs in the study area with N73,452, N36,627 and N86,105 as the mean gross margin, net returns and income respectively. However, the return to scale analysis shows that operation is still in stage I of the production surface. Nevertheless the factor inputs except education were efficiently allocated. The regression analysis shows that year of experience, cost of operation, amount of loans obtained and manday are significant factors in the G SM business. The study recommends an expansion in the scale of operation by the operators and greater access to credit and greater encouragement to uneducated unemployed youth by the government. The government should also persuade service providers to improve in their services and to also reduce service costs for operators. Key words: Deregulation, Telecommunication, net-retains, jobless, employment-generation. INTRODUCTION In recent times, the opportunity to earn a living has turned out to be quite elusive to a growing number of people in the Less Developed Countries (LDC). Unfortunately this seems to be mostly prominent in urban areas in Nigeria. Several years back, unemployment was rarely anything to be reckoned with in traditional Nigeria where tending of crops, herding of goats, fishing, among others were major occupation/obligations. According a report by ILO [4 ], the problems then were wars, cattle raids, famine, diseases and poverty. However, the tide turned the negative direction as far back as the early 1980s when many countries of the world were hit by economic recession. Since then, unemployment has assumed alarming and disturbing diamensions in Nigeria with millions of able bodied persons who are willing to accept jobs at the prevailing rates yet unable to find one [6 ]. The most disturbing part of the nature of unemployment in Nigeria is that it is very high among young school leavers and graduates from Universities, Polytechnics and Colleges of Education. This amounts to colossal wastage of economically active proportion of the Nation’s labour force. The negative effects of unemployment on the Nigerian cannot be over emphasized. It results in nonutilisation of resources leading to low productivity. It is also a major cause of rural-urban drift which has led to congestion problems in the urban centres with its attendant problems such as urban unemployment, destitution and high rate of criminal activities like armed robbery, ritual murders, increased rate of child abandoning and advanced fee fraud. Moreover, unemployment generates unbalanced mental state, which often results into frustration, suicides, alcoholism, drug abuse, thuggery and the likes....
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