BUSINESSDAY
The National Bureau of Statistics (NBS) released on Thursday the Nigeria Labour Force Survey (NLFS), which puts the country’s unemployment rate at 4.1 percent in the first quarter of 2023 and 5.3 percent in Q4 2022.
The new figures show a significant drop from the 33.3 percent for Q4 2020 released in March 2021, and suggest that Nigeria is now comparable to the United States with an unemployment rate of 3.4 percent and the United Kingdom (4.2 percent) despite a high poverty rate.
The NBS said last year that 63 percent or 133 million Nigerians were living in multidimensional poverty. Inflation pushed an estimated four million more Nigerians into poverty in the first five months of this year, the World Bank said in June.
During the launch of the NBS report in Abuja, Adeyemi Adeniran, statistician general of the federation, said it was an outcome of a recalibration in methodology using standards set by the International Labour Organisation (ILO) and not necessarily that the government had performed better.
The LFS, a quarterly survey designed with the objective to produce official national statistics on the labour force, employment and unemployment for monitoring and planning purposes, however, was delayed for almost two years.
Amongst other findings, the survey conducted by the NBS in collaboration with the World Bank classified employed individuals as those who are working for pay or profit and who worked for at least one hour in the last seven days.
The new unemployment data have been faulted by many Nigerians and analysts. Those who spoke to BusinessDay say it does not reflect current realities, and could send wrong signals to policymakers.
“If we are happy with one hour, then let it be clear that’s what policymakers are promising Nigerians in terms of employment. But you can’t be promising full-time employment or living wage employment and be tracking something else,” a top financial analyst said on condition of anonymity. “Your data methodology should track whatever your policy direction is.”
“Data is primarily used to give policymakers an idea of the problem so they can proffer solutions and monitor the impact of those solutions. If you say the problem is 4 percent, they will proffer solutions for 4 percent and monitor progress towards that 4 percent,” he added.
He wondered why a country with a 4 percent unemployment rate has rising crime and poverty rates.
Uche Uwaleke, a professor of Finance and Capital Market at the Nasarawa State University, does not believe the new unemployment numbers reflect current realities.
He said: “I think the unemployment number of 4.1 percent for quarter one in 2023 recently announced by the NBS may not reflect the true situation on ground owing to a number of reasons including the low sample size of under 40,000 persons used in the survey as well as the adoption of the International Labour Organisation guidelines for employment computation which considers employment from the perspective of persons of working age who are engaged in some type of jobs for at least one hour in a week for pay or profit.
“Compared to the old methodology adopted by the NBS, this new methodology, which includes apprentices, is tantamount to significantly lowering the bar and could lead to wrong policy decisions by the government.
“Much as the ILO guidelines provide a basis for global comparison, it is important that Nigeria adopts country-specific guidelines which closely reflect unique employment conditions prevalent in the country.”
Adeniran, the statistician general, insisted, however, that the new figures were not based on any government performance, but strictly on the change in methodology.
“NBS has not said that the unemployment rate in Nigeria has ‘reduced from the 33.3 percent to whatever the figure it is now, therefore the government should go to sleep’,” Adeniran said.
According to him, the NLFS is a survey for measuring whether people are engaged or not, the type of that engagement, and the nature of it, be it for pay, profit, own consumption or for free.
The survey finds that about three quarters of Nigerians in the working age population, 73.6 percent in Q4 2022 and 76.7 percent in Q1 2023, were engaged in some form of work for pay or profit during the quarters under review.
This workforce is composed of individuals engaged in various types of work, including formal and informal employment. A further 4.96 percent were engaged in subsistence agriculture in Q4 2022, while 3.56 percent of the working age population were engaged in subsistence agriculture in Q1 2023.
The results also indicate a scarcity of wage-employment, as the share of those employed in wage-employment was 13.4 percent in Q4 2022 and 11.8 percent in Q1 2023.
This, he said, means that a lot more Nigerians operate their own businesses or engage in agriculture, and that this figure was 73.1 percent in Q4 2022 and 75.4 percent in Q1 2023. The high share of self-employed persons amongst the employed shows that most Nigerians struggle to find wage employment, which is most desirable by Nigerians, he added.
The share of the working age population that are not working was 21.4 percent in Q4 2023 and 19.8 percent in Q1 2023.
According to him, not working is a combination of those within the working age population who are unemployed and not in the labour force, such as students, housewives and those not available and searching for work, hence the not working rate should not be taken as the unemployment rate.
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