NBS new definition puts Nigeria’s jobless rate at 6%

The Nigerian Bureau of Statistics (NBS) will today make a major announcement that will significantly shift the country’s rate of unemployment to six percent from 23.9 percent in 2014.

This shift is coming as a result of a redefinition of the benchmark of employment and unemployment figures, following  the most current NBS survey that has just been turned in.

Press exclusively gathered that the report which will be officially made public today, shows that underemployment rate in the country remains a critical challenge, which according to the new figures, moved up to 18 percent in the last quarter of 2014.

Youth unemployment is also seen high at 30 percent, the report  shows.

The NBS team adopted 20 hours a week benchmark, as against the 40 hours that had been used historically, and looked at the trend between 2010 and 2014. The internationally accepted definition by the International Labour Organisation (ILO) uses just one hour a week.

Before now, the NBS defined unemployed as the proportion of the labour force that did no work at all, or worked less than 40 hours a week during the reference period, which is usually the week last 7 days preceding the survey.

This however presents a major challenge, as those who work for less than 40 hours, 35 hours a week for instance, will be classified as unemployed, the NBS argues.

With the new methodology, the NBS new definition of unemployment is the population between the ages of 18 and 64 that are willing and able to work but cannot find work at least 20 hours in a week.

But underemployment looks at those working between 20 and 39 hours, but not applying themselves appropriately in terms of the number of hours they put in, or the fact that their jobs are lower than their skills or educational qualifications.

Yemi Kale,  Statistician-General of the Federation, will announce the figures at a press briefing today and is expected to explain the trend which shows unemployment rate at about 4 percent in 2010 opposed to 23.7 percent when the 40 hours outlook was being used. The figure, he would say, increased to 6.1 percent in 2011 compared to the increase to 23.9 percent. 

The figure increased again to 10.6 percent in 2012, but reduced slightly to 10.2 percent in 2013. In 2014, it went down to 7.8 percent in the first quarter, and then settled at 6.4 percent fourth quarter.

“So the latest unemployment number is 6.4 percent,” explained our source, who preferred not to be named.

But at the same time, underemployment was going up. Underemployment went from 16.3 percent in 2010 to 17.6 percent in 2011. It went down slightly to 16.8 percent in 2012, then further down to 14.5 percent in 2013 but moved to as high as 18 percent by fourth quarter of 2014.

This shows that “people were just moving from doing nothing to underemployment, just  to survive,” said the source, “and not that government was really creating more opportunities, otherwise, it would show both unemployment and underemployment going down same time.”

Chaired by  Sarah Anyanwu, a professor in the University of Abuja, the review team was commissioned by the NBS in September 2014 to assess the current definition of unemployment in the context of Nigeria, and recommend a new appropriate definition for computing unemployment rate and other labour related indicators in Nigeria, in line with internationally agreed standards, while also satisfying local conditions.

Experts spoken to yesterday, affirmed that though unemployment rate has dropped, the problem with  Nigeria is not really unemployment but underemployment, which is even more worrisome.

How many people in Nigeria sit down and just do not do any work to survive? They are very few, it is just that what they are doing is not good enough for them,» John Agomuo, an Abuja financial analyst submitted.

Nigerians, as we know them are not lazy people who can just sit down at home and not do anything. You will die of hunger, more especially these days that family networks are no longer working.

Again, people have that misconception that unemployment will take the whole population of about 170 million people into consideration, that is wrong,» he continued. «The entire population is divided into eight groups- there are those who are of the ages of 0-18, and those above the age of 65 years that can never be unemployed, because they are not in the economically active population.

He also explained that there is also a difference between not working and being unemployed, which is used wrongly and interchangeably.

So, to be unemployed, you have to be considered within the active population and you have to be willing and able to work and that, for Nigeria will come down to about 90 million people.

Agomuo further attributed part of the reasons why unemployment is higher in Nigeria, as graduates wanting the kind of jobs that take them to the office, no matter how much they earn. «But most of the informal jobs like the hair dressers, taxi drivers, mechanics etc even earn more money than the office workers and will be considered not unemployed, as long as they meet the definition, without considering how much they earn or whether what they do matches their skills.

Onyinye Nwachukwu

(Businessday)