Fabricated figures? Deliberate information hoarding? Controversial and delusional? Misleading and unreliable? Being economical with truth? Whatever the reactions from various sections of the stakeholders of the Nigeria economy, to whose benefits is a skewed unemployment rate? The latest unemployment rate from the National Bureau of Statistics puts the unemployment rate in Nigeria at 4.3 percent for the second quarter of 2024; thereby presenting Nigeria as doing better or rubbing shoulders with some sought-after economies when it comes to employment generation and productive engagement.
For proper perspective, one should ask: what is NBS really measuring when we talk about unemployment rate? NBS is informing those who need to know that in a given period in the economy, the labour force, which is a combination of individuals who are employed and those who are unemployed (known as the working age population) are gainfully employed. That is, how many of a country’s working-age population is in gainful employment. To give this figure, the NBS, in its wisdom, believes that whoever has been engaged or is working, either with or without earning a consideration, for at least one hour in seven days (1/168) is gainfully employed. This new methodology is a sheer departure from what was being used pre-February 2024 whereby what was measured was that to be considered employed or gainfully engaged, a person must have worked for a minimum of 20 hours within the reference period of seven days (20/168).
If working a few hours less than a day out of seven was earlier considered controversial, how come or how best should one react to a one hour engagement in a week, whether for a pay or it is mere volunteering? A critical mind would want to probe further: are those behind the churning out of these unreliable figures trying to hide something? If yes, what is it they are hiding?
In an attempt to unravel the employment/unemployment rate mystery, one should attempt to bring to fore the effects of poor or negative unemployment rate on any economy, including Nigeria’s. Poor unemployment rate negatively impacts foreign direct investment drives as no serious investors would want to put funds into an economy where the people in the target country have very little or no consumer spending power. Ahhh, is this why Nigeria is spewing out a skewed unemployment rate? A deliberate plan to principally two-time foreign or domestic investors? High unemployment has many negative effects on the economy. Among these are reduced consumer spending (whereby the unemployed spend less money – effecting reduced demand for goods and services and reduced production, higher rate of layoffs, and economic stagnation), loss of potential outputs, decreased tax revenue for government, increased reliance on social welfare programmes that strain public finances, economic uncertainty, human capital loss, and social unrests which doesn’t help business atmosphere.
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Considering the above, can we say the statisticians are playing politics with figures and are helping in building Nigeria’s economy by being economical with the employment situation? To attempt this question, we need to understand the consequences of unemployment on the economy, on government, on the individuals, and consequences of such long term unemployment. One of the consequences on the economy is the GDP gap; that is, the difference between the actual GDP and the potential GDP. Also the government will suffer uncertainty and instability in their dealings – which will render their efforts at governing very ineffective and inefficient. To the politicians who will always ask to be voted for, uncertainty and instability will cause disaffection with the voters and lead to outright rejection. The individuals are the ultimate losers since their living standards will be directly impacted by high unemployment rate and poor economy. Long term high unemployment rate will cause instability in the economy that will decrease consumption; leading to further unemployment and harder times in the working class finding jobs. It is better to imagine the repercussions of this vicious circle on a people.
Considering the rate at which businesses are closing down in Nigeria and the poor state of entrepreneurship due to the poor economy; and in view of the number of fresh graduates being churched out by the tertiary institutions, to report that employment situation is improving in Nigeria is quite delusional. It is reported that every year, Nigerian universities and polytechnics are producing about 600,000 graduates.
Loading these fresh graduates into the labour market every year will definitely aggravate Nigeria’s unemployment situation.
Therefore and very clearly, one cannot say that NBS is really helping Nigeria by using wrong measurement tools that throw up wrong results which under-declare the country’s unemployment rate. Rather than covering up the employment situation, Nigeria needs to face its reality and marshal all and sundry to rally towards helping revive the economy. Politicians in government need to understand that they have work to do – and they should get hold of the tools to effectively do the work to make Nigeria an economy that is sought after by the world. Governance is not about starched babanrigas.
. Ola Emmanuel is a business planning consultant and founder of Leacent Incorporated Trustee, a network of entrepreneurs and a group of cooperatives. He works with a team of international consultants to conceptualise and plan agribusiness and housing projects. As a certified trainer authorised to use the International Labour Organisation’s enterprise development modules, he trains entrepreneurs and organises workshops and seminars for potential and practising entrepreneurs as well as business managers and cooperatives. He also speaks and facilitates at leadership and management workshops on invitation. His book, Business Planning Made Easy: Step by Step Guide On How To Turn Your Idea To Profitable Business’ is the latest of the books authored by him. Tel: +234(0)9068602954 (call and sms), +234(0)8023257707 (WhatsApp only).
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