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At one hour a week, only 4.1% of Nigerians unemployed, says NBS

By Joseph Chibueze (Abuja) and Waliat Musa (Lagos) 
25 August 2023   |   3:03 am
• Methodology defies reality • Experts describe drop in rate an undercount • 92% Nigerians informally employed – NBS • Group calls for accessibility, employment opportunities for PWDs Nigeria’s unemployment rate has recorded a dramatic drop from 33.1 per cent reported in March 2021 to 4.1 per cent for the first quarter of 2023, the National Bureau…


• Methodology defies reality • Experts describe drop in rate an undercount
• 92% Nigerians informally employed – NBS
• Group calls for accessibility, employment opportunities for PWDs

Nigeria’s unemployment rate has recorded a dramatic drop from 33.1 per cent reported in March 2021 to 4.1 per cent for the first quarter of 2023, the National Bureau of Statistics (NBS) disclosed yesterday, when it released its employment data for the first quarter of 2023, indicating a substantial improvement in the job market.

It further stated that in Q1,2023, 92.6 per cent of employed persons in Nigeria were in informal employment, which includes agriculture, while 89.4 per cent in informal employment that excludes agriculture.

The bureau said the revised methodology defines employed persons as individuals who are working for pay or profit and who worked for at least one hour in the last seven days against 40 hours.
“The old methodology placed a range on the working-age population- 15 – 64 years, while considering working hours between 20-39 hours as underemployment, 1-19 hrs as unemployment,” it added.

The Bureau also announced that the unemployment rate as of the fourth quarter 2022 was 5.3 per cent. These were contained in the fourth quarter 2022 and first quarter 2023 Nigeria Labour Force Survey (NLFS) report launched on Thursday in Abuja.

The NBS had in March 2021 reported that Nigeria’s unemployment rate rose to 33.3 per cent, translating to some 23.2 million people, the highest in at least 13 years and the second-highest rate in the world. The figure jumped from 27.1 per cent recorded in the second quarter of 2020 amid Nigeria’s lingering economic crisis worsened by the Coronavirus pandemic.

Analysts said the unemployment statistics with the updated methodology do not reflect the true number of jobless people in Africa’s most populous country, where many have lost their jobs as a result of surging inflation and where the government has struggled to create enough jobs.

The true unemployment rate in Nigeria might be more than the 33 per cent recorded in 2020 when the NBS last released the labour data, said Akintunde Ogunsola, an Abuja-based financial analyst. He said many businesses in the micro, small and medium enterprise sector — a significant part of the economy — have been forced either to lay off some workers or shut down.

Recall that the unemployment rate in the country had more than quadrupled since 2016 when the economy slipped into a recession during the last administration of former President Muhammadu Buhari.

In April 2021, the then Minister of Labour, Dr. Chris Ngige, claimed that the World Bank questioned the methodology employed by NBS to generate its employment statistics, adding that he had on several occasions queried the employment statistics released by the agency.

“We had a virtual meeting of the national economic advisory council with the World Bank to look at Nigeria’s modalities for employment statistics data collection. There has been a little confusion as to the accuracy of data generated by the NBS. So, we want to align everything. The World Bank says the NBS methodology doesn’t conform to the global standard, especially the International Labour Organisation (ILO) format of arriving at such an employment index,” Ngige said at the time.

But the NBS dismissed Ngige’s claim, adding that the World Bank never questioned its methodology. However, yesterday, the NBS said it has enhanced its methodology of collecting labour market data through the Nigeria Labour Force Survey (NLFS) in line with ILO guidelines.

“The data collection for the revised NLFS is based on a sample of 35,520 households nationwide. It is conducted continuously throughout the year, with national-level results produced quarterly and state-level results at the end of a full year,” the bureau said.

The new approach provides for ongoing data collection throughout the year, delivering national-level results on a quarterly basis, and state-level results annually.

[FILE PHOTO] Demand for job creation

Some key highlights of the new data show the employment rate on the rise. The data shows an uptick in the percentage of working-age Nigerians (defined as persons aged 15 years and above) who were employed: 73.6 per cent in Q4,2022 and 76.7 per cent in Q1,2023.

This indicates that a majority of Nigerians were engaged in some form of employment for at least one hour per week, earning pay or profit.
The rate of underemployment, defined as those working less than 40 hours a week but willing to work more, stood at 13.7 per cent in Q4,2022 and declined to 12.2 per cent in Q1,2023. The percentage of those in wage employment was 13.4 per cent in Q4,2022, dropping slightly to 11.8 per cent in Q1,2023.

About one-third of employed persons (36.4 per cent in Q4,2022 and 33.2 per cent in Q1,2023) worked fewer than 40 hours per week. This trend was more prevalent among women, individuals with lower educational qualifications, youths, and those residing in rural areas.

Some other data gleaned from the report showed entrepreneurial activities and household support. The majority of employed Nigerians operated their own businesses or engaged in farming, with 73.1 per cent doing so in Q4,2022 and 75.4 per cent in Q1,2023. A further 10.7 per cent in Q4,2022 and 10.6 per cent in Q1,2023 were involved in unpaid household businesses.

The report also highlighted that 2.6 per cent of the employed population were engaged as apprentices or interns in Q4,2022, and this figure declined to 2.2 per cent in Q1,2023.

The NBS report clarified several terms: Employed at work –  Individuals who worked for pay or profit for at least one hour in the last seven days; Employed temporarily – Those who typically work but were absent due to reasons like vacation or sick leave; Active search – Taking specific actions to look for paid work or start a business in the past month; Available to work – Being ready to start work either last week or in the next two weeks.

But while the NBS’ Q1,2023 unemployment report paints an optimistic picture of Nigeria’s job market, there are important caveats that warrant attention. First is the new methodology—although in line with international standards—may not accurately reflect the lived experiences of many Nigerians.

The revised NLFS categorizes people engaged in menial jobs as “employed,” even if they are earning well below the minimum wage and operating under poor working conditions. This raises questions about the quality and sustainability of such employment, and whether this truly represents an improving job market or merely a shift in classification.

Additionally, the NBS’s report lacks a side-by-side comparison with data gathered using the previous methodology. This has traditionally been standard practice when there’s a change in methodology to offer a more transparent and comprehensive view. The absence of this comparative data may leave analysts, policymakers, and the general public wondering if the changes were implemented to present a rosier economic outlook deliberately.

The new methodology, although more robust and internationally compliant, may not wholly capture the complexities and challenges of the Nigerian employment landscape. This makes it crucial for stakeholders, ranging from policymakers to investors, to consider these nuances when interpreting the data and planning their next steps.

However, critics of the new methodology have cited a common trend in Nigeria where many jobless people do any kind of work to get a little money to sustain themselves, even if that is done once a week. They said classifying such people as employed because such work lasted for more than one hour does not reflect their true employment status.

The methodology should be revised to “properly reflect our own reality,” said Dr. Muda Yusuf, a former director general of the Lagos Chamber of Commerce and Industry (LCCI), who currently leads the Centre for the Promotion of Private Enterprise (CPPE).

“What can a one-hour job do? There are so many people who are doing jobs that cannot even feed them. So, if such people work for just one hour, how much would they get?” Yusuf queried.

Statistician-General of the Federation, Prince Adeyemi Adeniran, while explaining the sharp drop said it is not as a result of any action taken by the government to reduce unemployment, but because of the new methodology in calculating unemployment rate adopted by the Bureau.

Adeniran said: “Following guidelines adopted during the 19th International Conference of Labour Statisticians (ICLS) in Geneva in 2013, the new methodology considered employed persons as those who engaged in at least one hour of work during the last seven days the survey was conducted.

“Also, subsistence agriculture and temporary absence from employment work were not properly represented in the old methodology. The new methodology defines the working-age population as those within the age bracket of 15 years, and above without any limit. These improvements, among others, captured in the revised computations will make Nigeria’s Labour Force data comparable with other countries.”

He said the aim of this re-evaluation was two-pronged. On one hand was to ensure that the methodology is in line with international best practices and locally relevant, and on the other hand, to ensure that the production process was robust enough to produce estimates on a sustainable basis (avoiding periodic gaps), and also, produce more labour market indicators and analysis that will inform government about the employment and job situation in Nigeria.

In his goodwill message at the launch, Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, commended the NBS for its efforts in providing accurate data that can help the government in its planning. He said data is vital to budget and planning.

According to him, “the President believes in the use of data for planning. He will support anything that will lead to the production of accurate data. This new report will go a long way to help us in creating jobs for our youths.”

The Minister, however, said the government will from the 2024 budget season use the report for planning.

Earlier, the World Bank Country Director, Shubham Chaudhuri, noted the importance of having robust, regular national data such as the labour force survey report. He stated that reliable data gives the government knowledge about the welfare of the nation as well as ensures the right intervention and programs needed to address challenges.

Meanwhile, the Diversity, Inclusion, and Social Justice Group of the School of Politics, Policy, and Government has advocated a more inclusive society that values the rights and contributions of Persons with Disabilities (PWDs), and has therefore urged all public organizations, government bodies, and employers of labour to take proactive measures to ensure full compliance with the provisions of the Disability Act 2018.

As champions of diversity and inclusivity, the group is calling on all public buildings, facilities, and transportation systems to be made accessible to persons with disabilities, in accordance with the mandates of the Disability Act 2018.

“This act sets forth the fundamental principle that every individual, regardless of ability, should have equal access to public spaces and services. It is our firm belief that creating inclusive environments is not only a legal obligation but a moral imperative that reflects the values of a just society.

“In addition to advocating for physical accessibility, we also emphasise the importance of equitable employment opportunities for PWDs. We urge all employers of labor to provide reasonable accommodations for employees with disabilities, thereby fostering an environment where every individual can thrive and contribute.

“Furthermore, we call on employers to uphold the five per cent employment quota for PWDs, a critical step towards dismantling barriers and ensuring a diverse and inclusive workforce.

“It is crucial to note that the five-year moratorium on existing buildings, as specified in the Disability Act 2018, is set to conclude in January 2024. This deadline marks a pivotal moment for building and facility owners to ensure that their premises are accessible to PWDs. Beyond this date, non-compliance will result in fines for those found to be inaccessible, underlining the imperative for immediate action.

“The Diversity, Inclusion, and Social Justice Group recognizes that the journey towards inclusivity requires the collective effort of every stakeholder in our society. We are committed to working alongside public organizations, government bodies, employers, and advocacy groups to ensure the successful implementation of the Disability Act 2018 and the realization of its transformative potential,” it stated.