Understanding Nigeria's unemployment situation|TheCitizen
The issue of unemployment is a highly sensitive issue in Nigeria and what the various arms of governments are doing or not doing to address the problem are always in the news. Ask an average Nigerian what he thinks is the rate of unemployment in Nigeria and you can be sure to get an answer that puts the ratio quite high. You then get the official figure of unemployment and it is far below the average man's expectation. In view of the generally perceived high level of unemployment in the country, even the educated class often doubts the accuracy of the official figure.
Therefore, accurate statistical data underscores its importance for national planning and effective policy making in any economy. Labour statistics are the critical data that government needs to address the problem of unemployment, which is a key social problem that human societies around the world have continued to struggle with. The policies and measures that government will adopt and how effective they will largely depend on the accuracy of the employment data available.
It is in the light of this situation that the National Bureau of Statistics [NBS] has taken steps to shed a light of understanding of Nigeria's real unemployment situation. The bureau first set up the Review of Unemployment Statistics Committee made up of renowned experts drawn from various government agencies to review the methodology of employment data computations. The committee has since concluded its work, which has taken into consideration Nigeria's peculiar situation while adopting positions in tandem with internationally accepted standards.
The work of the committee, which has now been adopted by NBS have revealed very important aspects of the unemployment situation in Nigeria. International Labour Organisation [ILO] defines unemployment in terms of hours worked a week and anyone who works as low as one hour a week is assumed to be fully employed. Against the ILO's one hour a week, NBS has since been using 40 hours a week to define those that are employed. This means that unemployment situation in Nigeria would have been far less under ILO's definition than NBS' benchmark.
In line with the recommendation of the committee, NBS has now adopted new benchmarks to technically define employment, under employment and unemployment, which ensures proper classifications designed to enable policymakers take the right decisions. According to Dr. Yemi Kale, the Statistician General of the Federation, the objective is to remove emotions and sentiments from data production. We need to know how many people are employed and under employed and how many people are in seasonal, venerable and structural employment, he said.
By far the most important revelation of the initiatives that NBS has taken is the fact that being classified as employed does not take into consideration a person's income and qualification. This is really the heart of the matter, which means that most of people who are considered unemployed in Nigeria actually do not belong there. An engineering graduate, who is driving a taxi cab is technically under employed but not unemployed. The same is a lawyer who is working as a barber.
While these set of people may be looking out for better job opportunities, they are not unemployed and will not be so captured in the NBS' data. In everyday conversation, people will see these under employment situations as unemployment and will therefore expect such to be reflected in the official data. This will not happen because the street definition of unemployment is out of alignment with both the ILO's definition and the NBS' even more accommodative standard of definition.
Under the new definitions, people who are of the working age bracket of 15 - 64 years who did nothing or worked less than 20 hours a week are classified as unemployed. This disaggregation has provided room to capture Nigeria's peculiar situation where a large pool of workers in the informal sector would have been wrongly classified as unemployed.
Unemployed persons are therefore strictly defined as those who are not in employment in the reference period but are both available and seeking employment. This cuts off all those who are engaged in any income generating activities whatsoever, irrespective of what they do and the qualifications they have. It does not matter if they want to get into better paying or more befitting jobs. As long as they are engaged in any income generating activity, they are not unemployed.
The under employed are defined as those in employment who are working fewer hours than they would like to or engaged in employment not commensurate with their occupational skill in terms of training and experience. This is where the bulk of our school leavers and laid off workers belong. While they engage themselves in one form of economic activity or the other, they would want to change to more rewarding jobs where they can appropriately apply their skills and experiences.
What this change of methodology has done is to properly recognise the type of employment challenges we are facing in Nigeria. It has clearly shown that we are facing a far more critical problem of under employment than unemployment. With this understanding, Kale is satisfied that the objective of the committee's work has been achieved, which is to provide a way forward in turning our challenges in the labour market into opportunities.
When people who are qualified for higher jobs are doing jobs that require less training and qualifications, they are preventing others whose skills are better suited for that job, Kale said. This means that the real task before policymakers now is to create more suitable jobs for the under employed people so that they can create new vacancies for people more suited for the jobs they are presently doing.
Another important revelation is the disregard of certain economic activities when it comes to what is considered as a job. Kale also explains that the fact that the jobs of nannies, house helps, security guards etc are not high paying jobs in Nigeria does not warrant classifying those engaged in them as unemployed. According to him, it is better to recognise those doing these jobs as employed while pointing out to government that they are not well paid jobs so that policymakers can find ways of improving the wellbeing of those people.
Another important clarification is the difference between being unemployed and not having a job. It is not everybody who doesn't have a job that is unemployed. Only those who fall within the working age of 15 – 65 years - the so called economically active population, who are looking for work but cannot find any are recognised officially as unemployed. This means that those within the age bracket of 0 - 15 years and those above the age of 65 years are not captured in the unemployment rate.
Even within the economically active population those who are unwilling to work or are not available for work will also be removed before arriving at the real rate of unemployment. Those who are not interested in working cannot be classified as unemployed even though they don't have a job. In the same way those who are not available for work such as students are not unemployed. According to Kale, unemployment is a function of not finding a job though you are in the labour force and are available and willing to work.
It is therefore very important for Nigerians to appreciate the fact that the country like many others are facing unemployment challenges but more worrisome is the rising cases of under employment – which a chunk of many working age belongs to, and Nigerian policy makers needs to move quickly to address it.