BY EMEKA EJERE
Economic experts are blowing hot, raising several issues in expression of dissatisfaction with explanations given for the new unemployment figures released by the National Bureau of Statistics (NBS).
The analysts are in agreement that the new figures are not only unreflective of the current realities in the country, but they are also capable of misleading the new government of President Bola Tinubu, in the choice of policy steps for the badly needed recovery of the ailing economy.
The NBS had on Thursday revealed that unemployment dropped to 4.1 per cent in the first quarter of 2023, a huge drop from the 33;3 per cent it reported in Q4, 2020, contradicting the statistics body’s position as of November 2022 that 133 million Nigerians were multi-dimensionally poor.
The experts had, while awaiting the release of labour market data by the NBS in May predicted that the unemployment figures would worsen, following the protracted poor performance of the economy in the past few years. They had argued that with many jobs that had been lost due to the COVID-19 pandemic, coupled with the many young graduates that joined the labour market, insecurity and other socio-economic challenges, Nigerians should be expecting rates worse than the last result.
The NBS released its last Labour Force Statistics in the fourth quarter (Q4) of 2020 when unemployment and underemployment reports stood at 33.3 per cent and 22.8 per cent respectively.
However, to improve the statistical system, the NBS had disclosed that it was coming up with a redesign of the Nigerian labour force survey, termed ‘Labour Force Statistics Framework’ to replace the old ‘Labour Force Statistics: Unemployment and Underemployment Report’.
It said the new approach places Nigeria at the frontier of global labour market statistics, where it builds on efforts to bring the questionnaire and other aspects of the methodology in line with International Labour Organisation (ILO) standards. The NBS said it collaborated with the World Bank on supporting the efforts through the Fiscal Governance and Institutions Project (FGIP).
The methodology, the NBS said included the adoption of the 19th International Conference of Labour Statisticians (ICLS) standard ‘
Resolution concerning statistics of work, employment and labour underutilisation’, provides measures for underutilisation, beyond unemployment and recognises and provides a framework for measurement of all work, paid and unpaid.
It said the use of a one-hour criterion for employment would ensure unemployment is regarded as a total lack of employment, while calling for more attention towards the assessment of the quality of employment.
Meanwhile, in a recent report by KPMG, the Nigerian unemployment rate had increased to 37.7per cent in 2022, and would further rise to 40.6per cent, due to the continuing inflow of job seekers into the job market.
The report said unemployment would continue to be a challenge due to the slower-than-required economic growth, and the inability of the economy to absorb about four to five million new entrants into the Nigerian job market every year.
Conflict with reality
Analysts have faulted the new methodology, arguing that it does not allow for a better understanding of the actual level of unemployment in the country, which remains a major socio-economic challenge. This, according to them could mislead the governments, policymakers and other users of the NBS data.
Executive Vice Chairman at Highcap Securities Limited, David Adonri, said: “For NBS to employ a new method that produced the recent result beats every imagination. Is this new statistical approach globally acceptable? With the desolation of farmlands due to the reign of terror by bandits, Boko-haram and ISWAP, agriculture, which absorbs majority of Nigerian labor force is beleaguered.
“Lingering impact of past government’s economic disruption and recent fallout of macroeconomic reforms have caused massive loss of jobs. With these developments, can a 4.1% unemployment rate be justifiable? I consider the resort to sub-regional “substandard” approach to statistics as politically motivated.
“The figure released by NBS is contradictory to reality on ground and cannot stand the test of statistical confidence, consistency and global acceptability’’.
Similarly, financial Economist and Professor of Capital Market, Uche Uwaleke, said: “I think the unemployment number of 4.1% for first quarter 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.”
Uwaleke observed that compared to the old methodology adopted by the NBS, the 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 provides a basis for global comparison, it is important that Nigeria adopts country-specific guidelines, which closely reflect unique employment conditions prevalent in the country,” Uwaleke cautioned.
The National Secretary-General of the Nigerian Labour Congress (NLC), Chris Onyeka, said the report does not reflect the reality in the labour market.
“The statistic is not reliable. It is as simple as that. It is not in sync with what is on the ground. We all know that the rate of unemployment in Nigeria is increasing,” Onyeka said.
The Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane, queried the new parameter used by the statistical body in arriving at the new rate of employment, explaining that it would be difficult to justify the data considering the situation on the ground.
He said, “I have had conversation around this with the former NBS CEO. How do you explain and justify this? Taking someone, who has worked for one hour in a week as employed will be very difficult considering what is on the ground here.”
Also, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stated it was difficult to accept the recently released unemployment report. He argued that the methodology used to generate the statistics needs to be reviewed to reflect what is real.
“Four per cent unemployment rate in this part of the world is as good as full employment. Empirical evidence abounds of many young people, especially the educated ones, who practically have nothing to do”, Yusuf stated.
“It is true that there are several others, who are engaged in different activities to make a living. There are also millions engaged in the informal sector. But one-hour engagement would not pass for being an employed person.”
The Centre for Social Justice (CSJ) in a report expressed concerns about the NBS’s plan to change its methodology to measure unemployment in the country.
The report signed by the Lead Director of CSJ, Eze Onyekpere, stated in part: “The whole basis of a job report is to help the government to determine whether its plans, policies and laws geared at reducing unemployment are achieving 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?”
However, speaking at the launch of the new Nigeria Labour Force Survey (NLFS), using the revised methodology, the Statistician-General of the Federation (SGF)/Chief Executive, National Bureau of Statistics (NBS), Semiu Adeniran, had stressed that the new numbers do not necessarily change the dire unemployment challenge in the country and urged the government not to go to sleep over the announcement.
He added that the new unemployment data was only arrived at as a result of the change in the measuring template and not what the government had done.
