Policymakers should focus on quality, not quantity of jobs – ADSR

Afolabi Olowookere, chief economist at Analysts Data Services and Resources (ADSR) has said policymakers in Nigeria need to pay more attention to the quality than the quantity of the jobs to be created.

He made this known in a presentation at the sensitisation workshop on the revised methodology for the computation of Labour Force Statistics in Nigeria on Monday.

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“For a government that has job creation as key on its agenda, this non-comparability and the fact that the majority of working-age Nigerians are already engaged in some type of job suggests that the policymaker needs to pay more attention to the quality, as against the quantity, of the jobs to be created,” Olowookere said.

The latest Labour Force Survey report by the National Bureau of Statistics reveals that Nigeria’s unemployment rate rose to 5.0 percent in the third quarter of 2023 from 4.2 percent in the previous quarter.

“Time-related underemployment in Q3 was 12.3 percent, showing a slight increase of 0.5 percent from the rate recorded in Q2. This shows an increase of 1.4 percent compared to the rate in Q4. 4.1 percent of the working-age population was in subsistence agriculture in Q3,” the report said.

“Informal employment rate in Q3 was 92.3 percent, while Q2 2023 was 92.7 percent. Percentage of youth Not in Employment, Education or Training (NEET Rate) was 13.7 percent in Q3,” it added.

“In setting new targets for job creation and unemployment reduction, the policymaker needs to pay due attention to the type of jobs that the working-age Nigerians are doing, as well as the proportions of those in the underemployed, waged employment and informal sector categories,” Olowookere said.

He said the policymaker should be interested in the type of jobs Nigerians are doing and how well such jobs contribute to meeting their basic needs. “Measurable targets with timelines need to be set to move most of the people in this category to the employed category.”

He stated that the policymakers need to determine the advantage of being in wage employment and the optimal proportion of working-age Nigerians that should be in this category. “It will also be important to know the degree of subsistence practice even among those farmers that are classified as commercial.

“More information is needed on the Nigerian informal sector, whether it can achieve the production, revenue, and export diversification that Nigeria desires, and how fast the sector is transitioning to being formal,” Olowookere stated.

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He also said it is equally important to determine factors pushing and keeping people in the informal sector. “Therefore, it will be beneficial to re-evaluate Nigeria’s natural rate of employment in light of the revised methodology, which has produced an unemployment rate of 5.0 percent and an underemployment rate of 12.3 percent in Q3.”

He gave recommendations stating that the policymaker should encourage and fund the production of unemployment figures that are based on consistent and comparable methodology.

“While the statistical authority should continue to use the best methods to capture important statistics such as the unemployment rate, it should ensure comparability over time,” Olowookere said. “Researchers need to probe into the existing measures of unemployment, test alternatives for robustness, and share findings with the statistical authority,” he added.