Business & Economy

Nigeria’s Unemployment Rate Drops To 4.1% After NBS Policy Change (All You Need To Know)

Published

1 year ago

Aug 24, 2023.

Eko Hot Blog reports that Nigeria’s unemployment dropped to 4.1% in the first quarter of 2023.

This data was contained in the Nigeria Labour Force Survey Q4 2022 & Q1 2023 released by the National Bureau of Statistics on Thursday.

The data also revealed that Nigeria’s unemployment rate was 5.3% in Q4 2022.

In contrast, the last released labour force statistics for the fourth quarter of 2020 in March 2021 show the unemployment rate was at 33.3 percent, the highest on record.

The significant drop came after NBS announced a change in its methodology in April 2023.

THE METHODOLOGY CHANGE

The previous methodology, which was based on the 13th International Conference of Labour Statisticians (ICLS) standards, covers people aged 15-64 years working for 40 hours or more for pay or profit while the new one, which is based on the 19th ICLS standards, covers people aged 15 and above working for pay or profit, regardless of their working hours.

For the unemployed, the old version defines them as people aged 15-64 who did not work or worked less than 20 hours, while the new one covers people aged 15 and above who are not employed, seeking employment and available for work.

However, the new methodology does not count people engaged in some type of jobs for at least one hour in a week, for pay or profit, as unemployed.

NBS

The NBS maintains that the new model is in line with methodology of other countries in the region.

“The average modelled ILO unemployment rate estimate for the Western and Central Africa region for 2022 was 4.7%,” the bureau said.

Unemployment was higher among women than among men in Q4 2022. Unemployment was also higher among those with higher educational attainment, being highest for those with post-secondary education.

“This is a common trend observed in other countries. Those with higher levels of education are more likely to seek formal, wage-employment jobs, which could require longer periods of search. They are also likely to be from higher-income households, which can support them while they conduct search activities,” the NBS explained.

It added that unemployment was highest for young Nigerians compared to other age groups and higher in urban compared to rural areas.

EXPERTS’ OPINIONS

However, experts note that the drop was not a result of government intervention or indication that new jobs were created.

“The updated version could artificially bring down the unemployment rate because they are increasing the coverage for employed by relaxing the cut-offs for hours worked which looks very impracticable and unrepresentative of the desired measure,” Temitope Omosuyi, investment strategy manager at Afrinvest Limited, told BusinessDay.

He said the employed will increase but the structure of the labour force participation rate is still the same, thus unemployment will drop.

“The hours worked must be clearly stated for both unemployed and employed to ensure an exhausted survey or analysis,” Omosuyi added.

Damilola Adewale, a Lagos-based economic analyst, said even though there might be a marginal drop in the country’s unemployment rate, it is not as a result of the Federal Government interventions.

“When the employment rate drops, the government may now be thinking that their programmes and interventions are working, not knowing the NBS is now reaching more active people in the labour market,” he said.

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