According to recent labour force statistics released by Nigeria’s National Bureau of Statistics, the country’s employment
rate saw a decline to 4.1% in the first quarter of 2023 from 5.3% in the preceding quarter of 2022.
This quarterly contraction in the numbers primarily stemmed from the progressive expansion of the economy, thereby facilitating an
escalated rate of employment amidst a deceleration in economic activities between Q4 ’22 and Q1 ’23.
Notably, this prevailing rate remains higher in comparison to neighboring West African countries, except for Cameroon, where the
employment rate aligns with Nigeria at 4.1%.
The issue of unemployment continues to be a pronounced phenomenon in Nigeria, as well as in other global regions, carrying adverse implications for the nation.
To simplify, Nigeria reported a considerable unemployment rate of
33.3% in the final quarter of 2020 due to the economic disruptions
brought about by the COVID-19 pandemic.
The emergence of the novel virus catalyzed an increase in the unemployment rate, resulting in job losses, business closures, and
hindered economic growth.
While Nigeria grappled with a modest yet positive economic growth of 3.54% and 2.31% for Q4 2022 and Q1 2023, respectively, amid a burgeoning
population and an expanding workforce, the economy grappled with surging poverty levels, societal turmoil stemming from crime and various forms of violence, in addition to the persistent challenge of brain drain.
The latter refers to the exodus of skilled and educated individuals seeking better prospects in more advanced economies.
As per the data collated by the NBS through the Nigeria Labor Force Survey (NLFS) in alignment with the International Labor Organization (ILO) guidelines, approximately 74% of working-age Nigerians were gainfully employed in Q4 ’22, and nearly 77% of the same demographic secured employment during the initial three months of 2023.
This signifies that the majority of individuals were engaged in various job roles for at least one hour per week, either for compensation
or profit.
Moreover, the proportion of employed individuals working less than 40 hours weekly was 36.4% in Q4 ’22, dropping to 33.2% in the first quarter of 2023.
This trend was particularly evident among women, those with lower educational attainment, young individuals, and rural residents.
The statistics agency further elucidated that a growing number of Nigerians are embracing self-employment or engaging in agricultural pursuits, constituting 73.1% and 75.4% of the total labor force, respectively.
Similarly, 10.7% in Q4 2022 and 10.6% in Q1 2023 were contributing to household businesses without pecuniary gain. Furthermore, in Q4 ’22, 2.6% were involved as apprentices or interns, while the corresponding figure for Q1 ’23 stood at 2.2%.
The rate of informal employment among employed Nigerians was 93.5% in Q4 ’22, slightly receding to 92.6% in Q1 ’23.
An additional facet to consider is the underemployment rate, denoting the proportion of employed individuals working less than 40 hours per week who express their willingness and availability to undertake more work.
This metric recorded figures of 13.7% in Q4 ’22 and 12.2% in Q1 ’23. Moreover, the share of wage employment was 13.4% in Q4 ’22, which
diminished to 11.8% in Q1 ’23.
On a different note, 22.3% of the working-age populace remained outside the labor force in Q4 ’22, with a decline to 20.1% in Q1 ’23.
Interestingly, an analysis of the previously reported unemployment rate for Q4 ’20, utilizing the stringent definition of the new NLFS based on a zero-hour work week, reveals a substantially higher figure of approximately 17.5%. This stands in stark contrast to the 4.1% rate for Q1 ’23 and 5.3% for Q4 ’22.
This disparity raises concerns regarding the accuracy of these figures, particularly when considering that around two-thirds of Nigerians (133 million) live in multidimensional poverty.
Additionally, Nigeria’s ranking on the misery index is notably high. In light of the prevailing economic realities, the single-digit unemployment rate of 4.1% appears somewhat flattering.
However, this largely stems from the altered methodology of the new NLFS.
Therefore, it becomes imperative for policymakers under the current administration to establish mechanisms ensuring the accurate reflection of the actual realities behind these published statistics.
