The new methodology of computing unemployment masks reality

Controversy has continued to dog the latest unemployment data, which was released recently by the National Bureau of Statistics (NBS). The figures indicate that Nigeria’s unemployment stood at 4.1 per cent in the first quarter of the year (Q1 2023), compared to 5.3 per cent in the preceding quarter. This is a dramatic drop from 33.1 per cent reported in March 2021. The Statistician-General of the Federation (SGF)/Chief Executive of NBS, Semiu Adeniran who gave the figures disclosed that the data result from the change in the measuring template and not what the government has done. According to him, the new approach in computing the unemployment figures is consistent with the International Labour Organisation (ILO) standard methodology applied in several jurisdictions.

We commend the NBS for its diligence in providing regular data with which the managers of the economy can plan. The current job survey which indicates that 93 per cent of Nigerians are employed in the informal sector is scary. Based on the methodology, the new definition of the labour force consists of anyone from the age of 15 years and above, who is willing, available, and able to work and contrasts with the old definition which recognised those aged between 15 and 64 who were willing, available, and able to work during the reference period of seven days.

The main concern surrounding the new methodology is the definition which identifies an unemployed person as anyone within the labour force who within the reference period (previous seven days) did not work for a minimum of one hour. This is a significant change from the old definition in which to qualify as being employed, a person needed to have worked for a minimum of 20 hours within the reference period of seven days. Part of the arguments against the new approach in computing is that it does not allow for a better understanding of the actual level of unemployment in the country. This can easily be exploited by politicians who are always looking for convenient ways to excuse their irresponsible behaviour.

Admittedly, Adeniran has stated that the new numbers do not necessarily change the dire unemployment challenge in the country while stating that adopting the new methodology was to go with the current global trend. He has also urged the federal government and authorities in the 36 states not to go to sleep over the statistics. According to Adeniran, the new unemployment figures are not based on any performance of any sort. But many still wonder why the agency would resort to such a methodology at a time like this, when it is bound to create more puzzles than clarity to economic planners.

What makes the new unemployment rate more controversial stems from the disclosure by a former Statistician-General of Federation/ Chief Executive of NBS, Yemi Kale, that he resisted the urge to further change the country’s unemployment data-gathering methodology as head of the statistical body. According to Kale, during his time at the NBS, the committee in charge of reviewing the minimum number of work hours to count as employed, felt one hour did not make sense because the income generated within that time frame was not necessarily liveable.

Based on Kale’s disclosure, there is a greater push for people to impute motives that the NBS’ resort to the controversial methodology could be a function of external pressures. Should that be the case, it is counterproductive and has the capacity to create credibility issues around the agency and its data. Above all, the new methodology could mislead governments and policymakers at all levels because figures churned out do not align with actual reality. We hope the NBS will be mindful of these concerns in future.

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