CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

        One of the greatest challenges that Nigeria is confronted with and which on the average has continued to witness a rising trend over the years is unemployment (Torruam and Abur, 2014; Njoku and Ihugba, 2011). Its scourge is known to be responsible for a high level of poverty, inequality, increasing rate of criminality, and general low level of living in the country.

        Apart from representing a colossal waste of country’s manpower resources, Akinboyo (1987); Raheem (1993) cited in Obadan and Odusola (2001) noted that unemployment generates welfare loss in terms of lower output. This automatically will culminate into low growth in the economy over time if it persists. The realization of this fact made Iyoha (1978) cited in Kareem (2015) reiterated the significance of employment generation in driving the growth rate of gross domestic product (GDP) in Nigeria.

From the viewpoints of ecological-economics, energy (one form of which is electricity) is a necessary input in economic production process as much as do the classical determinants of growth (that is, conventional inputs like labour and capital) recognized by the proponents of the neoclassical theories. Based on the argument of Beaudreau (1995), production is not feasible without energy consumption.

Studies at one point or the other have alluded to the view that provision of access to quality electric power and its consumption is very crucial for socio-economic development of any nation (George and Oseni, 2012; Alaali et al., 2015). According to Onakoya et al. (2013), energy is the pillar of wealth creation in Nigeria, evident by being the nucleus of operations and engine of growth for all sectors of the economy. Aligning with this stance, Lee and Chang (2008) and Stern (2011) conceded with the fact that economic activities either at home or large scale industries regard energy as a mandatory input in the production process and therefore, it is regarded as a limiting factor to economic growth (Ghali and El-Sakka, 2004).

Onakoya et al. (2013) noted that the output of energy sector (for instance; electricity, petroleum products among others.) usually consolidate the activities of the other sectors which provide essential services to direct the production activities in agriculture, manufacturing and mining This suggests that the supply and consumption of electricity is even critical for improving education and health outcomes (the essential components of quality human capital) required for positive contributions to socio-economic advancement of any nation.

1.2   STATEMENT OF THE PROBLEMS

        Non- diversification of Nigeria economy and relying entirely on oil whose price fluctuates according to the world market might be frustrating whereas there are other things like; Agriculture, ICT, Hospitality and Entertainment that is neglected or not even taken seriously by the government could have been a promising avenue for Nigeria for their economic growth and development. Finally, several research has been carried out on the effects of human capital investment on unemployment volatility in Nigeria but not even a single research has been carried out on the impact of unemployment on human capital outflow in Nigeria economy.

1.3   AIMS AND OBJECTIVES

        The main aim of the study is to determine the impact of unemployment on human capital outflow in Nigeria economy. Other specific objectives of the study include;

1. to determine the extent to which unemployment affects capital outflow in Nigeria economy.
2. to determine the causative factors of unemployment and its effect on human capital outflow in Nigeria economy.
3. to determine the influence of unemployment on human capital outflow in Nigeria economy.
4. to proffer possible solutions to the problems.

1.4   RESEARCH QUESTIONS

1. What is the extent to which unemployment affects capital outflow in Nigeria economy?
2. What are the causative factors of unemployment and its effect on human capital outflow in Nigeria economy?
3. What is the influence of unemployment on human capital outflow in Nigeria economy?
4. What are the possible solutions to the problems?

1.5   STATEMENT OF RESEARCH HYPOTHESIS

HO:   Unemployment has no significant effect on human capital outflow in Nigeria economy.

HI:    Unemployment has a significant effect on human capital outflow in Nigeria economy.

1.6   SIGNIFICANCE OF THE STUDY

        The study on the impact of unemployment on human capital outflow will be of immense benefit to the Nigeria economy in the sense that it will enable diversification of the economy; this might help Nigeria to cease from relying entirely on oil whose price fluctuates according to the world market. Agriculture, ICT, Hospitality and Entertainment could be a promising avenue for Nigeria to diversify her economy. If revolution in mobile communications can provide this great employment as we see currently in Nigeria, other sectors can do the same with similar commitments. It will also help Nigeria to see the needs to adopt a skill-oriented education principle to train skilled and technically strong manpower, to build and maintain its critical infrastructure to drive the economy. Finally, the study will contribute to the body of existing literature and knowledge to this field of study and basis for further research.

1.7   SCOPE OF THE STUDY

        The study on the impact of unemployment on human capital outflow in Nigeria economy will cover from 2000 to 2018.

1.8   LIMITATION OF THE STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9   DEFINITION OF TERMS

Impact    A marked effect or influence.

Unemployment       Is a term referring to individuals who are employable and seeking a job but are unable to find a job. 

Human Capital       is the stock of habits, knowledge, social and personality attributes (including creativity) embodied in the ability to perform labour so as to produce economic value.

Outflow   A large amount of money, liquid, or people that moves or is transferred out of a place.

Economic        An economy is an area of the production, distribution and trade, as well as consumption of goods and services by different agents.