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NBS Recommends New Unemployment Ranking Methodology

Sam Diala

Barely one year when the the National Bureau of Statistics (NBS) rebased (recalculated) the nation’s Gross Domestic Product (GDP) the Bureau has unveiled a new methodology for computing unemployment in the country. By the new calculation, Nigeria’s unemployment rate is now 6 per cent as against the 23.9 per cent in 2014 and up now.

In an official presentation in Abuja yesterday, the government agency disclosed that unemployment rate in Nigeria will now be computed on the bases of 20 man-hours per week as against 40 man-hours which has been the principle adopted by the International Labour Organisation (ILO) before it also adjusted to a system that is even less than what NBS now proposes.

Before the new arrangement, the NBS defined unemployment as the proportion of the labour force that did no work at all, or worked less than 40 hours a week during the reference period – that is the 7 days preceding the survey.

The challenge with the “old” arrangement, however, was that the unemployment rate (at 40 hours a week) did not include those who work 39 hours or those under-employed but work even above 40 hours.

The new method recommends 4 man-hours a day translating to 20 man-hours per week which is even less than prevailing internationally accepted definition of unemployment by ILO which uses one hour a week. Explaining justification for the review, the NBS said, “In the recent times, unemployment rates have been heavily criticized in various quarters, either for being too high or too low.

Governments at various levels considered the rates as too high, judging by the adoption and implementation of various ‘pro-poor’ policies while, on the other hand, the vulnerable or those affected by unemployment situation, regarded the rates as rather too low, judging by number of persons in their domains considered to be ‘unemployed.

“Disagreement with these rates was assumed to have been caused by lack of understanding or disregard for the definitions, concept and methodology used in the computations.

This, again lead to the inauguration of the national stakeholders committee which, studied and reviewed the definition, concept and methodology used by the National Bureau of Statistics, at a workshop setting in September, 2014.” The Bureau said it adopted the recommendations, based on the data presented, in order to adjust to economic realities that would align Nigeria’s unemployment situation with prevailing ILO platform.

“With the availability of the dataset,” the Bureau said, “unemployment rates for past five years have been recalculated for the purpose of trend analysis.”

With the new methodology, the NBS has adopted a new definition of unemployment which refers to population between the ages of 18 and 64 that are willing and able to work but cannot find work that will occupy them for at least 20 hours in a week.

Given available data, Nigeria’s unemployment rate is now 6 per cent as against 23.9 per cent which is the figure related to the “old” system of 40 hours per week. Statistician-General, Dr Yemi Kale, observed that adopting the prevailing ILO employment methodology would have put Nigeria’s unemployment rate at 2 to 3 per cent.

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