The National Bureau of Statistics (NBS) has clarified how it arrived at the unemployment rate of 4.1% in Nigeria.
The NBS recently released the Nigeria Labour Force Survey (NLFS) for Q4 2022 and Q1 2023, which indicates that the unemployment rate in the country was 5.3% in Q4 2022 and 4.1% in Q1 2023.
According to the survey, about three-quarters of working-age Nigerians were employed – 73.6% in Q4 2022 and 76.7% in Q1 2023, and the share of wage employment was 13.4% in Q4 2022 and 11.8% in Q1 2023.
The survey also revealed that about one-third (36.4% in Q4 2022 and 33.2% in Q1 2023) of employed persons worked less than 40 hours per week in both quarters and that the underemployment rate was 13.7% in Q4 2022 and 12.2% in Q1 2023 with the rate of informal employment including agriculture among the employed Nigerians standing at 93.5% in Q4 2022 and 92.6% in Q1 2023.
Clarifying how the bureau arrived at these figures, the Statistician-General of the Federation and Chief Executive Officer of NBS, Prince Adeyemi Adeniran stated that the new NLFS unveils a set of labour force indicators designed to provide unparalleled insights into the dynamics of the workforce in Nigeria.
Adeniran stressed that the NLFS was conducted by the NBS in collaboration with the World Bank (WB) and the International Labour Organisation (ILO) in response to the labour market dynamics.
The report covered the fourth quarter of 2022 and the first quarter of 2023, “presenting an in-depth analysis of key labour market indicators including unemployment, underemployment, informal employment and hours worked”.
The CEO stated: “The NBS embarked on a revision of the methodology through the adoption of the 19th International Conference of Labour Statisticians (ICLS) ‘‘Resolution concerning statistics of work, employment, unemployment, and labour underutilisation’’, and the latest International Labour Organisation (ILO) model questionnaire which includes unemployment among persons engaged in ‘‘Own Consumption work’’.
“The revised methodology aligns with Nigeria’s neighbours in Africa such as Ghana, Niger, Chad, Cameroon, Benin Republic, Gambia etc, in line with international best practices”.
Continuing, he wrote: “The enhanced methodology which was informed by the need to produce comparable labour statistics focuses on the review of definitions and concepts, data collection, coverage etc.
“The revised methodology defines employed persons as those working for pay or profit and who worked for at least one (1) hour in the last 7 days, and considers underemployed persons as those working less than 40 hours per week and declaring themselves willing and available to work more.
“Unemployed persons are those not in employment but actively searching and are available for work (i.e did nothing for pay or profit). In addition, working-age population covers ages 15 and above, and a distinction is made between commercial and subsistence agriculture in the revised methodology.
“The old methodology defines the working-age population as those within the age bracket of 15-64 years, considering those working between 20 and 39 hours as underemployed, and those working between 1 and 19 hours as unemployed (including those who did nothing).
“Also, subsistence agriculture and temporary absentees from employment work were not properly represented in the old methodology. These improvements, among others, captured in the revised computations will make Nigeria’s Labour Force data comparable with other countries”.
TNG reports the key highlights of the report are:
- About three-quarters of working-age Nigerians were employed – 73.6% in Q4 2022 and 76.7% in Q1 2023, indicating that most people were engaged in some type of job for at least one hour in a week, for pay or profit.
- The unemployment rate was 5.3% in Q4 2022 and 4.1% in Q1 2023 – This aligns with the rates in other developing countries where work, even if only for a few hours and in low-productivity jobs, is essential to make ends meet, particularly in the absence of any social protection for the unemployed.
- The share of wage employment was 13.4% in Q4 2022 and 11.8% in Q1 2023, while more Nigerians operate their own businesses or engaged in farming activities, recorded at 73.1% in Q4, 2022 and 75.4% in Q1, 2023.
- About one-third (36.4% in Q4 2022 and 33.2% in Q1 2023) of employed persons worked less than 40 hours per week in both quarters. This was most common among women, individuals with lower levels of education, young people, and those living in rural areas.
- Underemployment rate which is the share of employed people working less than 40 hours per week and declaring themselves willing and available to work more was 13.7% in Q4 2022 and 12.2% in Q1 2023.
- The rate of informal employment including agriculture among the employed Nigerians was 93.5% in Q4 2022 and 92.6% in Q1 2023.
“The report not only offers a snapshot of the current employment landscape but also provides a foundation for evidence-based policymaking. Its insights into labour market statistics empower stakeholders to make informed decisions that can shape the country’s labour market and economy,” Adeniran stated.
Speaking on Thursday during the inauguration of the NLFS in Abuja, World Bank’s Country Director, Shubham Chaudhuri pledged the continued support of the bank to ensure a robust, regular national LFS data for the country.
Chaudhuri said reliable data provided the government with knowledge about the nation’s welfare and ensured the right intervention and programs needed to address it’s challenges.
The Minister of Budget and Economic Planning, Abubakar Bagudu, said data was key to national planning and development.
According to Bagudu, President Bola Tinubu believes in reliable data for planning and will support anything that will lead to the production of appropriate data.
“To create jobs for youths, we need this kind of data, a lot needs to be done to address the high rate of unemployment in the country. The President is desirous of reducing unemployment.
“Nigeria is one of the countries with absorptive capacity, so what we need is to provide better environment and more incentives,” he said.
While commending the efforts of NBS and its partners in revising the methodology, Bagudu said the ministry would from 2024 use of the revised data more practically.
Meanwhile, the Acting CBN Governor, Mohammed Tumala said labour statistics was one of the most important inputs to economic policy and business decisions.
Tumula said labour was the most important of the factors of production and determined both the quantity and quality of utility of other factors.
While commending efforts of the NBS, he stressed the need for synergy with communication experts to ensure proper linkage and dissemination of data to the public.
Similarly, Prof. Mike Obadan, Non Executive Director and member MPC, CBN also reiterated the need for NBS to ensure robust strategy for communicating its survey findings to the public in simple language.