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The controversy on crashed unemployment rate (I)

The other day, I was invited alongside some other economists, to a parley with the Statistician General (SG), to help critique their new methodology for…

The other day, I was invited alongside some other economists, to a parley with the Statistician General (SG), to help critique their new methodology for labour-related statistics for Nigeria. The SG noted that this new framework was informed by the best practices of the International Labour Organisation (ILO).

He informed the audience that in the past, they had considered anyone who worked less than 40 hours a week and was willing to take on more work as unemployed. This led to several tens of millions being reported as unemployed in Nigeria, even as sheer hours of work became less relevant and the emphasis shifted to productivity, aided by technology.

Later, they reduced that number according to international best practices, to 20 hours a week, with similar results. Nigeria’s unemployment figures were always alarmingly high. And of course, that fits into the narrative that most Nigerians would desire. Whereas many Nigerians are suffering but it looks like we love to over-exaggerate our predicament at every turn – and this itself is a major problem because except a people feel positive about their country, they may not evolve to a better place.

The ‘doom and gloom’ scenario to which we have become addicted needs to be ditched at some point. Nigerians must have to be convinced away from the idea that the country will only get worse. That is not a winning attitude. 

It must be said that our expectations in this country especially – more than even any other black African nation I know and/or have been to – diverges a lot from the expectations of say the Western societies whom we try to benchmark with our economy. Nigerians are generally very aspirational. But unfortunately, our actions are usually about self-aggrandisation and not the collective. This is what plays out in our politics and why some politicians see nothing wrong in appropriating what belongs to the commonwealth. But down the rank and file, it is basically a case of me, me, me!  

Many Nigerians have migrated abroad, only to find that beyond the façade, many citizens of those countries are passing through sheer hell as well, only saved by the products of centuries of collective thinking and provisions! But here, we talk about our glorious past. We have so many princes of different royal ancestries, many of whom carry on like they should be served.

Our religiousness emphasizes how we should get favours from God and how we should be the richest in our society. Some sects emphasise getting so much money and riches for little work, or for nothing. All these nuances need to be figured out in our quest for collective socioeconomic development – whenever it starts in earnest. I’m afraid that successive governments often focus on the hard numbers but often totally ignore the softer side of things – without which they labour in vain until the tide turns against them.

I am advising the current administration not to make the same mistake. There has to be immediate plans to engage the public on some of the issues I mentioned above, as most Nigerians may miss that point when the country actually begins to make progress – with the suffusing pall of negativity that chokes the land and those who dwell therein. 

I read quite a few commentaries that are dismissive of the new methodology which dropped Nigeria’s unemployment rate to 4.1 per cent.  But I think we should understand that there are merits and demerits. And the methodology forces us all to think about critical issues in the labour space today. 

Firstly, the ILO is the United Nations body supervening labour issues worldwide, so at some point, we must adhere to their improving standards. The NBS further says many countries have internalised these new guidelines. However, the NBS is basing its survey on 35,520 households. It is unclear whether the NBS has been using the same database for a while or if it shifts its surveys spatially and geographically to get new perspectives.

Also, the NBS has to explain to the public why it chose to survey only 35,520 households. Is that number representative enough for 200 million+ people – depending on whom you believe? I have personally not been surveyed by the NBS and honestly don’t know anyone who has. Again, this throws up the usual cynicism, among ordinary Nigerians – just as happened when we heard that the Buhari government (working with the World Bank) came up with a list of 60 million Nigerians who live in poverty. Don’t blame us if we disbelieve, work on your methodology. 

Now, the NBS says that three-quarters, or 73.6 per cent – 76.7 per cent of working-age Nigerians were employed because they did more than one hour of paid work (or for-profit) in a week. People are asking if one hour of work in Nigeria is good enough even if someone chooses not to do more work. The amount earned by people who work for one hour a week will differ considerably, with techies earning a lot but casual workers being unable to survive on their earnings.  

A high-flying executive in many industries does not need more than one hour of work in a week, but an artisan who says one hour of work in a week is enough surely needs help.  The NBS report also says that 36.4 per cent and 33.2 per cent of working-age Nigerians worked for less than 40 hours in the period under survey (Q4 2022 and Q1 2023) but did not seek more work.

“Underemployment rate (which is a share of employed people working less than 40 hours per week and declaring themselves willing and available to work more) was 13.7 per cent in Q4 2022 and 12.2 per cent in Q1 2023”, the NBS declared.

The bureau further stated that wage employment accounted for only 13.4 per cent and 11.8 per cent in Q4 2022 and Q1 2023 respectively while a whopping 73.1 per cent in Q4 2022 and 75.4 per cent in Q1 2023 were operating their own businesses or into farming!

The balance of 10.7 per cent in Q4 2022 and 10.6 per cent in Q1 2023 were either “engaged helping in a household business” or serving as apprentices/interns (2.6 per cent in Q4 2022 and 2.2 per cent in Q1 2023).

This means that of all the people ‘working’ in Nigeria, roughly 85 per cent were engaged ‘on their own’, hustling, serving as apprentices, doing ‘buying and selling’, or generally in the informal sector. This is shameful, sad, and scary.  This leaves a balance of 5.3 per cent in Q4 2022 and 4.1 per cent in Q1 2023 that could be considered as truly unemployed, according to the NBS. But obviously, Nigeria is in deep trouble. 

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