The last attempt at publishing Nigeria’s unemployment rate was in Q3-2018 and the rate stood at 23.1%. By inference, about 1 out of every 5 Nigerian eligible to work is unemployed. By default, unemployment rate should be published quarterly; it therefore suggests some political shenanigans that Nigeria has not reported the number of unemployed in the last six quarters. In this piece, we look at possible reasons for this anomaly.
As a precursor, it is important the uses of unemployment data. Monetary policy makers use unemployment to decide the health of the economy. When unemployment is high, production is shrinking, and a central bank will lever on pro-growth monetary policies. On the fiscal side, budget planning must consider the rate of unemployment. This would then tell budget size for unemployment benefits. Sadly, Nigeria has no history of unemployment pay checks. Investors are also wary of sectors with high unemployment rate because it suggests to them that business performance in those sectors are dipping.
So, what reasons are advanced for the lapse in publishing unemployment rate till date. The big reason would be the sheer disregard for quality data by the federal government. Intertwined with this is that the electorate in Nigeria do not consider economic statistics in determining who to vote for. In the United States, a weekly job count takes place to assess how the government is faring in terms of job creation. This is a mirage in Nigeria. Clearly, the Nigerian government do not use data for planning.
Another lead reason is the idea that the federal government could be aware that unemployment rate could be so high now that they do not want it divulged to the public. There are possible explanation for this: factory activities have been volatile, going upwards and steady, going downwards; there is an increase in out-of-school statistics, particularly in the north; the rate of industrialization is low; foreign direct investment is also abased and unemployment initiatives like the N-power has been ineffective.
As explained earlier, there is no record of unemployment pay checks in Nigeria unlike what obtains in advanced economies like the United States and United Kingdom. Hysterically, some people prefer to be unemployed in these countries instead of picking up a job since they are sure of a paycheck. If the Nigerian government had to budget for unemployment palliatives, they would pay more attention to a regular release of unemployment statistics.
A lame reason could also be that funds are not provided to the National Bureau of Statistics (NBS) to collate relevant data and publish the unemployment rate. We believe that it should not cost a huge fortune to determine the unemployment rate. In fact, it should cost more to determine inflation rate as opposed to unemployment. Moreover, inflation rate is published monthly. This wraps the intuition that the excuse for not publishing the unemployment rate cannot be related to cost.
It is expedient to conduct an unemployment survey given: the break in publishing the rate; the importance of Labour statistics in evaluating fiscal performance; and the role the data plays in stirring up fiscal commitment to job creation.
Co-written by Tola Otukoya and Michael Ogunremi
Tola is consultant at BDS Consult, Lagos
I wonder how tangible provisions will be made to reduce unemployment rate without the knowledge of how large the problem is. How can substantial policy recommendations be made without the understanding the nitty-gritty of the problem. Questions like; what is the participation rate? What is the unemployment rate? What is the quality of our labour force? Etc. are basic questions to ask when analysing and proffering solution to unemployment issues of a country so that we will know and fully utilize our comparative advantage in terms of labour, know the area they are skilled in and kind of opportunity to create for them and ways to improve the quality of labour in terms of skills, innovations and technological progress. By these can a country keep growing!
I absolutely agree with your position on the need for quality unemployment statistics for planning purposes and wish the government will consider this. Thanks for your comment