Statistics on unemployment: Stakeholders call for clear action
Nigerians, particularly the army of unemployed persons, who are in their millions, were taken aback on Thursday, August 31, 2023, when the National Bureau of Statistics, NBS, released a report that the country’s unemployment rate had dropped from 33.3 to 4.1 percent.
This latest report jolted many Nigerians, who see the unemployment rate as on the rise. Many shouted blue murder and have remained in utter bewilderment ever since the report was released.
The NBS had announced that in its revised analytical tools for calculating the number of unemployed Nigerians, it arrived at a 4.1 percent unemployment figure, an unprecedented improvement from the 33.3 percent figure that was reported in March 2021, when it last released the country’s employment index.
To arrive at the new figure, the NBS said it adopted the International Labour Organization’s (ILO) standard, which recognized all forms of work, paid or unpaid, to integrate labor statistics with other yardsticks, such as the Gross Domestic Product (GDP. This implies that anybody who is engaged for between one hour and 19 hours a week is fully employed.
The old methodology, according to the NBS, defines the working-age population as those within the age bracket of 15 to 64 years and considers working between 20 and 39 hours as underemployed. The Bureau also argued that classifying those working between one hour and 19 hours as unemployed was wrong.
It further highlighted that while the unemployment rate is 4.1 percent, the underemployment rate is 12.2 percent, even as it puts youth underemployment at 6.9 percent and youth unemployment at 18.1 percent.
However, the report was received with mixed reactions. Many dismissed it as a sham and unconnected with the reality on the ground. Many saw it as an insult to the sensibilities of Nigerians.
Those pushing this narrative are of the opinion that the issue of unemployment in Nigeria has gone beyond the bandying of figures. They believe that to properly measure the unemployment rate, the government should start by measuring the number of graduates that are employed every year, as well as the number of establishments that are created every year.
In other words, they believe that what should be of paramount importance to the government should be how to create employment for the army of unemployed youths that increases at a geometric rate on a monthly basis, instead of concocting one figure that does not have any bearing on the reality of the situation. They wondered why the NBS would choose the one-hour working methodology against the 20-hour and 40-hour working standards.
Yet, there are those who wondered how anybody could say that unemployment had dropped in Nigeria when the few companies that employ Nigerians have all folded up and either closed shops or relocated to other African countries, thereby throwing more people into the unemployment market. This is in addition to the millions that are being churned out every year by the nation’s tertiary institutions as well as artisans, who are all scouting for the non-existent jobs.
Again, there are others who simply alleged the Statistician General of the Federation and NBS boss Samiu Adeyemi Adeniran were only trying to be in the good books of the Federal Government in order to get a second term in office.
There are also those who are of the firm belief that the figure is a true reflection of the situation, going by the ILO standard.
Nigerians from across every divide, ranging from the organized labor unions to professional bodies, civil society organizations, and experts, among others, have been commenting on the NBS latest figure, with some outright rejecting the report as misleading and unreflective of the prevailing unemployment crisis in the country.
A senior official of the Nigeria Labour Congress, NLC, who preferred anonymity, alleged that what the NBS did was just to rebase the employment template in order to get a lower figure for the unemployment rate in the country.
He lamented that such a move was not helpful because it was capable of undermining the credibility of the NBS in its future work.
He said, “The fact is that any statistical data that is not truly representative of the facts on ground loses its validity. We know that the unemployment figure in Nigeria cannot be falling when the reality is that we have factories that are closing and leaving the country because of the difficult operating environment.
“You then ask yourself: Where are the new jobs that have absorbed the hundreds of thousands of graduates that are entering the labor market annually? The truth is that rebasing the employment template in order to get a lower figure for unemployment is not helpful because it may undermine the credibility of the NBS’ work in the future.
“We sincerely suggest that figures or statistics dished out to Nigerians can only achieve its purpose when they align with the objective realities on the ground, no matter how bitter it may be. The idea that anybody who earns N1000 a week is in employment smacks of attempts at gerrymandering the unemployment rate to cover the inability of the state to perform its responsibilities to the economy and Nigerians.
“In all, we may not accept that figure until we conduct due diligence on the process that led to the outcome.”
For the Assistant General Secretary of the Nigeria Labour Congress, NLC, Chris Onyeka, the data did not demonstrate what is real and available on the ground because the unemployment figure as released by the NBS could not be taken as a credible working document.
He said: “If the NBS claims it adopted the ILO’s methodology, who are the stakeholders involved in using that template? What were the sources of their data? It is just like rebasing the economy to say you are doing better, whereas you are not.
“The reality is that more Nigerians are out of work now than before. The data has to be reviewed. We have messed up governance in Nigeria, including the judiciary and the legislature; now it is an NBS institution.”
President, Association of National Accountants of Nigeria (ANAN), Dr James Ekerare Neminebor, also rejected the report and described it as misleading.
He stated that the government was just trying to put things in place, including job creation and that committees had just been formed and were yet to kick off.
He wondered how somebody could come up with an unemployment figure at the material time, when the government was still trying to set things in motion, describing the NBS report as unacceptable and misleading.
Also, the Chief Executive Officer, Centre for the Promotion of Private Enterprises, CPPE, Dr. Muda Yusuf noted that the marginal 20 basis point improvement from the 2.31 per cent recorded in the first quarter showed adverse effects of the ongoing reforms.
According to him, though the growth is higher on quarter-on-quarter consideration, it was slow when compared to the comparative quarter of 2022, which was 3.54 per cent.
He argued that the economy slowed down amidst shocks from the current economic reforms, which impacted energy prices and the Naira exchange rate.
“The adverse impacts of the reforms were disproportionately higher than expected.
“However, a rebound of the economy is expected in the medium to the long term, as the current distortions in the economy are corrected.
“Meanwhile, there is an immediate positive outcome, which is the marked improvement in the fiscal space of governments at all levels,” he stated.
He noted that implementing the reforms were arduous tasks and that the tradeoffs were profound, while the social impacts had been devastating.
He said: “Given the inevitability of the reforms, the implementation calls for a delicate balancing act, and strategic sequencing to ensure an inclusive economic transition.
“Dealing with the issues of insecurity, spending priorities, corruption, productivity and competitiveness, regulatory environment and macroeconomic stability are paramount to rebuilding the momentum of economic growth and development.”
In its own submission, the Centre for Social Justice, CSJ, said the new methodology which the NBS employed to determine the level of unemployment and underemployment in Nigeria was antithetical to the country’s reality.
It further argued that the figures contained in the NBS report were misleading, and could not be relied on for planning purposes.
The organisation rejected the NBS’s report and hinged its argument on the fact that unemployment has been on a steady increase since the last report in 2020, which reported a 33.3 percent unemployment rate in Nigeria.
The CSJ’s Lead Director, Eze Onyekpere, said: “Since 2020, Nigeria’s economic challenges have increased with galloping inflation and factory closures.
“The whole basis of a job report is to help the government to determine whether its plans, policies and laws geared towards reducing unemployment achieve the desired milestones. What is the point of a job report that tells the government that more Nigerians are employed when it is a clear and notorious fact that unemployment is increasing?”
He described as laughable and unrealistic the move by the NBS to now count people who are working for at least one hour a week or those that are self-employed in low-productivity activities as employed.
“This is not an accurate reflection of the reality of the Nigerian labour market. It is simply to satisfy a fad. It is a waste of taxpayers’ money to produce a report that adds no value to the Nigerian people and their economy.”
To buttress his argument that the latest finding was in complete contrast with the prevailing economic challenges facing Nigerians, particularly in the most recent times, he said: “Before this report, Nigeria’s last unemployment data was released in the fourth quarter of 2020, leaving a substantial gap in our understanding of the employment situation.
“The CSJ previously emphasized the urgency for the NBS to provide up-to-date employment data for the years 2021 and 2022. The CSJ recognizes that a robust job report serves as a crucial tool for governmental planning and policy evaluation.
“However, the reported unemployment rate of 4.1 per cent raises severe concerns about the relevance and accuracy of the methodology and the significance of the findings to the living experiences of Nigerians.”
He further noted that the reported rate was incongruent with the economic challenges faced by a significant percentage of the population, even as he urged the NBS to reconsider its methodology and ensure that it accurately captures the full spectrum of the employment challenges faced by Nigerians.
“It is essential that the job reports reflect the realities and provide an honest assessment of the economic landscape. Only through accurate data can the government develop effective strategies that deliver on its promises and address the pressing issues facing our nation,” he submitted.
However, a coalition of Civil Society Organisations, CSOs, led by Chief Ogakwu Dominic, has urged Nigerians to accept the report because it would help the government to plan and budget effectively.
“For us as civil society practitioners, statistics are not just numbers; they present the optics with which we score and adjudge the performance of those who have been saddled with the responsibility to look after government business, and by extension, the welfare of the Nigerian citizens.
“One thing that is certain is that numbers don’t lie, and if we must get out of the current myriads of challenges confronting our republic, and deliver on the dividends of democracy to the least Nigerian, we must see the Nigeria Labour Force Survey, NLFS, report as not just another routine exercise by an agency of the government, but as a strategic document for sustainable planning and budgeting with a view to achieving the promises as contained in the manifesto of the ‘Renewed Hope’ agenda of President Bola Tinubu-led administration and beyond.
“Certainly, statistics play a crucial role in the planning process by providing valuable insights and information for decision-making, and it is our my utmost belief that the NLFS report will not fall short of the expectations of millions of Nigerians, who are eagerly waiting to get whispers of a renewed hope through the content of the document?” the CSOs stated.
A professor of statistics at the University of Ibadan, UI, and Coordinator of the UI Laboratory for Interdisciplinary Statistics (UI-LISA), Olusanya Olubusoye, argued that the focus should be on how many jobs that were created and how many industries that developed during the period under review.
“I don’t have doubts about the figure generated by the NBS because they followed standard practice in terms of methodology, design, and execution.
“But, where I differ is those who developed the basis identifying somebody employed or not employed. Is this the same measure that is used in developed countries? Most of these international bodies design methodologies for developing countries.
“The United States of America or the United Kingdom hardly emphasise on the unemployment rate. Rather, they talk about the number of jobs that are created. So, if they are assessing any administration, they look at how many jobs that have been created.
“The focus should be on how many jobs that have been created, and not actually about how many people that are not working. Jobs should be created in a higher proportion compared to the number of graduates or number of youths or people in the population. That was how they watered down the poverty rate too.
“So, we also need to know the number of jobs that are lost. The interest should not be about the unemployment rate because the definition itself is not helping us as a developing country. It doesn’t reflect the reality on ground.
“It doesn’t reflect the reality of our people. What we need is for the government to tell us how many jobs that were created, how many industries that came up, and how many youths that graduated and secured employment in the first quarter, and not to be using this highly aggregated and deficient definition which deviates from the reality of our environment,” he stated.
As the argument for and against the NBS unemployment figure continues, its imperativeness and credibility can only make a difference when industries begin to spring up and more unemployed graduates and artisans get employed.