• Thursday, July 18, 2024
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BusinessDay

Fuzzy data won’t help

Digital transformation: A pathway to address Nigeria’s unemployment crisis

“Statisticians, like artists, have the bad habit of falling in love with their models.”- George Box (1919-2013)

In April 2023, the National Bureau of Statistics (NBS) made an announcement regarding a change in the methodology used to calculate the unemployment rate in the country. However, there was a significant amount of scepticism surrounding this announcement, as Nigeria’s unemployment crisis is a pressing issue that requires immediate attention from both state and federal governments.

In a statement released by the NBS, it was stated that the purpose of this change was to align with the guidelines set by the International Labor Organization (ILO). Upon hearing about this announcement, most Nigerians had a feeling that something suspicious might occur. As anticipated, the NBS seemed to “fall in love” with a specific ILO model, leading to a significant controversy.

There is a misalignment between what is on paper and the number of unemployed people parading themselves within the country

Analysts were worried. Economists were concerned that since the last quarter of 2020 when the NBS released the unemployment rate of 33.3 percent, no new data has been released. However, sometime in August 2023, the NBS released a report claiming a significantly low unemployment rate, which seemed suspicious.

Read also: Revisiting the NBS unemployment report

The unemployment rate dropped from 33.3 percent in the fourth quarter of 2020, to 5.4 percent in the fourth quarter of 2022 and 4.1 percent in the first quarter of 2023. The NBS provided a reason for this sudden change, but it was seen by many Nigerians as an attempt to manipulate statistics and portray a false image of Nigeria’s economy. There is a misalignment between what is on paper and the number of unemployed people parading themselves within the country. Economists and public policy analysts expressed their concerns over the drastic decrease in unemployment data especially since many Nigerians are jobless.

The NBS claimed that a new methodology was used to determine those who are gainfully employed or not. These figures are contained in a document titled Nigeria Labour Force Survey. For instance, the Survey revealed frightening data that 93 percent of Nigerians are employed in the informal sector. Equally, the report revealed that “three-quarters of working-age Nigerians were employed – 73.6% in Q4 2022 and 76.7% in Q1 2023. This shows that most people were engaged in some type of job for at least one hour in a week, for pay or profit.”

While it is commendable that the NBS took the time to clarify that the changes in the figures were due to a change in methodology and not a reflection of the actual unemployment situation in Nigeria. The response to criticisms on certain aspects of the Survey Report by the Statistician General was not well-received by many people. Despite the illuminating information provided by the former DG NBS on how the figures were calculated, the office of the Statistician General issued a disclaimer, which many Nigerians condemned.

Read also: NBS says Nigeria’s unemployment is 4 percent. It lied shamelessly!

Truth be told, we have a problem with data in the country. We say this not because we are not patriotic. It’s because we want an improvement in the quality of data presented to the public. Why is unemployment rate data being manipulated? Are the new rates for political purposes? Can we really consider someone who works for just one hour a week as gainfully employed? In Nigeria, the real problem is not just unemployment, but underemployment. There is also a problem with employment. Many people are working, but they are not earning enough money for their survival. In this country, many organizations cannot pay a minimum wage of thirty thousand naira despite rising inflation. It is important to note that there are numerous young Nigerians who have received education or vocational training but are unable to start their own businesses due to a lack of capital or inability to find employment.

Statistics should be used to inform policy decisions. However, the recent unemployment rate released by the NBS seems to downplay the severity of the issue. It is not accurate to consider people who are struggling to survive through various means as “employed”. The nature of work in Nigeria is unpredictable, with jobs being available today and gone the next day. This kind of economic model, where millions of people live in multidimensional poverty and rely on constant hustling, is unique to Nigeria. It is hardly seen anywhere else in the world.

Although there were criticisms regarding the statistics, the NBS made efforts to clarify that the changes in the figures were not reflective of the actual state of unemployment in Nigeria, but rather a result of the revised methodology used in collecting the data.

Fortunately, during his first Federal Executive Council Meeting, the President of Nigeria acknowledged the high unemployment rate in Nigeria and expressed his dissatisfaction with the situation. The Finance Minister and Coordinating Minister for the Economy also agreed, stating that youth unemployment is particularly concerning and needs to be addressed.

Read also: The new NBS jobs report: Dealing with criticisms professionally

According to some economists, the slight decrease in the NBS unemployment rate cannot be attributed to government actions. These economists argue that the NBS is downplaying the harsh reality of unemployment. Many economists and analysts view the latest unemployment data as a mockery. Surprisingly, Nigeria now appears to be grouped with countries like the United States, China, the Netherlands, Australia, and the United Kingdom, which have the lowest unemployment rates in 2023 according to the International Monetary Fund (IMF).

As a public institution, the NBS should strive to maintain its credibility by providing accurate and reliable statistics on the economy. Unfortunately, in the past three years, there has been a worsening trend of unemployment and poverty in Nigeria, which can be attributed to factors such as insecurity, job losses, and rising inflation. In fact, the NBS had previously reported that 133 million Nigerians are living in multidimensional poverty, and an additional 4 million Nigerians have been pushed into poverty due to rising inflation.

To effectively support policymakers, businesses, researchers, and investors in stimulating economic growth and job creation, it is crucial for the NBS to utilize an accepted methodology that produces accurate data reflecting the true Nigerian reality.

Accurate and reliable statistics are crucial for policymakers to effectively address economic, social, and environmental issues. Therefore, it is imperative that data from the NBS is trustworthy and unbiased, regardless of the good intentions behind it. Thank you.