Governance and Youth Unemployment in Nigeria

Abstract

Numerous studies have observed that governance matters in economic growth and subsequently employment generation. Despite the overwhelming evidences on the importance of this variable, there is surprisingly little research on how to promote it effectively in many developing countries. The problems facing the youth in the labour market has become more intense as a result, youths turn to less productive and less remunerative work at the informal sector. This paper therefore investigates the link between Governance, Youth Employment, Gross Capital Formation and Economic Growth. It utilizes the Granger non-Causality technique to explore the connection between these factors in sets. The discoveries uncover that there is bi-directional causal connection among governance and economic growth and furthermore between Economic growth and youth employment in Nigeria. The causality between Economic growth and capital formation is uni-directional from gross capital formation to Economic growth. It is discovered that there is no causal connection among employment and governance; and among employment and gross capital. It is recommended that the government should put on policies to increase growth so as to increase youth employment. Since capital formation causes growth and growth in turn causes youth employment; this implies that more investment in the country will indirectly cause youth employment. Government policies aimed at boosting both public and private investments in the country should be formulated; consequently the challenges of youth unemployment would be addressed.