Nigeria’s National Bureau of Statistics reported a drastic drop in unemployment from 33% to 4.3% due to a methodological change in defining employment. The new methods broaden the classification of both employed and unemployed individuals and face skepticism from labor groups questioning their validity. Meanwhile, the World Bank supports the changes as a step towards better representation, alongside reforms in inflation and GDP calculations aimed at reflecting the evolving economy.
Nigeria’s recent revision of economic indicators has stirred significant debate. Previously reported at a staggering 33%, the unemployment rate has dramatically decreased to 4.3% according to the National Bureau of Statistics (NBS). However, this shift is attributed to a methodological change rather than an actual employment surge. The NBS, under Aderemi Adeniran’s leadership, now counts anyone aged 15 and above working for pay as employed, vastly broadening the criteria compared to the earlier definitions.
This new classification method defines unemployment differently by encompassing a wider age range and allowing for various work scenarios. The previous model only regarded those aged 15 to 64 working less than 20 hours a week as unemployed, which has now expanded to include anyone without work yet actively available. Additionally, the definition of underemployment has also shifted to encapsulate workers engaged between one and 39 hours per week. These reforms are part of a larger effort by the NBS to modernize economic data collection practices.
Historically, the old method indicated that over a third of Nigeria’s population was unemployed, with 52% categorized as underemployed. By contrast, the reform has lowered unemployment figures, claiming they now fall within lower single digits. A notable aspect of the labor market survey reveals that self-employment constitutes 93% of the labor force, suggesting modest formal job opportunities.
Despite these changes, the new calculations face skepticism from labor unions and various stakeholders, who argue that the statistics underestimate the economic challenges. Influential organizations like the Nigeria Labour Congress have labeled the adjustments as misrepresentative of the realities on the ground. Nevertheless, the NBS contends that similar methodologies have been implemented in 26 other African nations, aiming for accurate reflections of labor situations.
Economist perspectives align with the NBS’s revisions, with the World Bank characterizing the updated statistics as a progressive move. They acknowledge that underemployment is of greater concern compared to outright unemployment, observing that individuals often accept subpar jobs to survive economic adversities. The varied unemployment rates across educational levels also highlight the nuanced job market.
Plans for recalibrating inflation rates and Gross Domestic Product (GDP) calculations are underway, coinciding with the revised employment figures. Changes will include expanding the composition of the inflation measurement and modernizing GDP calculations to incorporate a wider spectrum of economic activities. The NBS aims to reflect the evolving landscape of Nigeria’s economy more accurately, especially in the growing technology and informal sectors.
Aderemi Adeniran articulates that continual updates of statistical measures are crucial as economies evolve. The incorporation of new industries and shifting consumption patterns necessitates these recalibrations to maintain relevancy. By refining these metrics, Nigeria aims to provide a clearer portrait of its economic conditions, despite concerns about potential inflation in reported figures post-revision.
President Bola Tinubu anticipates an inflation reduction from a 34.8% high to 15% by 2025, based on changes to the consumer price index and broader economic activities. This transformation seeks to present a more favorable representation of Nigeria’s economic conditions, aligning statistical realities with lived experiences.
The revision of Nigeria’s economic indicators has led to both a dramatic decrease in reported unemployment rates and increased scrutiny regarding the accuracy and representation of these figures. Despite backlash from unions and concerns over the implications of the new methods, the NBS argues for legitimacy in aligning with global standards. Ongoing reforms, including adjustments to inflation and GDP calculations, signal a broader modernization effort aimed at accurately reflecting Nigeria’s economic landscape.
Original Source: african.business
