EXPERTS have advised the Federal Government to work with Nigeria’s Multidimensional Poverty rate released last year by the National Bureau of Statistics instead of the recently published Nigeria Labour Force Statistics Report.
According to NBS, 133 million Nigerians were multi-dimensionally poor as of 2022. However, the recent Labour Force Report for the first quarter of 2023 disclosed that 76.1 per cent of Nigerians were engaged in some job for at least one hour a week for a pay or profit, which qualified them as being employed.
This puts the unemployment rate at 4.1 per cent, a drop from 33.3 per cent as of the fourth quarter 2020.
The experts who spoke on The ICIR Twitter Space on Friday, August 31, said that the Labour Force Report was unrealistic compared to how Nigerians adjusted to economic policies enacted by former President Muhammadu Buhari and President Bola Ahmed Tinubu.
Some of these policies include the naira re-design policy, removal of fuel subsidy and devaluation in Nigeria’s exchange market. These policies had increased the inflation rate to 24.08 per cent, the highest in over a decade, increased the pump price by over 200 per cent and the exchange rate to more than N900/1 USD.
In the new Labour Force Report, NBS said that it revised and adjusted the methodology used for the survey as against what was obtained in the previous reports. For instance, in the old methodology, the working population was 15 to 64 years. Now, the working population is 15 years and above. Also, the new methodology interprets unemployment as people who are not doing anything, while the old methodology interprets unemployment as people who worked below 20 hours.
Similarly, underemployed persons worked between 20 and 39 hours in the old methodology, while underemployed persons worked less than 40 hours in the new methodology.
These adjustments have sprouted several controversies as to how accurate the figures are. The ICIR reported how these would affect the Nigerian economy and policy implementation by government parastatals.
A principal partner at Afrique Capital and Equity Funds Limited, Kazeem Bello, said that while there were several parameters provided by the International Labour Organization (ILO) for calculating the labour strength of a country, the country was at liberty to pick whichever parameters best work with the economic policies, impact of the policies and benefits.
Bello said that the adjustments by the bureau agreed with Nigeria’s economic system, which operates a minimum wage of N30,000 monthly. By implication, if a person is paid N1,000 daily for a one-hour job, he is considered employed.
He said, “I do not expect the government to accept that kind of unemployment figures. If they do, we will be increasing the poverty rate in the country unknowingly. What the government can do is focus on the multidimensional poverty ratio. Some people doing the 20-hour jobs in Nigeria live below the global household income threshold.”
Bello noted that if someone worked and did not live above the Standard Poverty Index (SIP), they would be considered poor globally.
Also, the Head of Financial Institutions rating at Agusto&Co, Ayokunle Olubunmi, added that the average amount made from working an hour could not form a basic living wage for any Nigerian.
Olubunmi said, “The new methodology begs a lot of questions. Data is meant to reflect reality and influence economic decisions, but this data cannot be used for anything. You cannot say GDP growth is declining and unemployment is also reducing. It is not logical.”
He noted that the most reliable form of data comes from the NBS, and the bureau must ensure it provides data that reflects the situation of the economy.
The experts urged that the government focus its strength on poverty reduction rather than unemployment, especially with the new methodology.
The ICIR reported how Tinubu promised to create one million jobs through the digital economy for the teeming youths in Nigeria during his inauguration on May 29.