Nigeria's Unemployment Rate Increases to 33.3% in Q4 2020 from 27.1% in Q2 2020 - NBS

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Monday, March 15, 2021 04:00 PM / by NBS/ Header Image Credit:  NBS


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Highlights

  • The number of persons in the economically active or working age population (15 - 64 years of age) during the reference period of the survey, Q4, 2020 was 122,049,400. This is 4.3% higher than the figure recorded in Q2, 2020, which was 116,871,186.
  • The number of persons in the labour force (i.e., people within ages 15 -64, who are able and willing to work) was estimated to be 69,675,468. This was 13.22% less than the number persons in Q2, 2020. Of this number, those within the age bracket of 25-34 were highest, with 20,091,695 or 28.8% of the labour force.
  • The total number of people in employment (i.e., people with jobs) during the reference period was 46,488,079. Of this number, 30,572,440 were full-time employed (i.e., worked 40+ hours per week), while 15,915,639 were under-employed (i.e., working between 20-29 hours per week).  This figure is 20.6% less than the people in employment in Q2, 2020.
  • The unemployment rate during the reference period, Q4, 2020 was 33.3%, an increase from the 27.1% recorded in Q2, 2020. The underemployment rate declined from 28.6% in Q2, 2020 to 22.8%. 
  • The unemployment rate among rural dwellers was 34.5%, up from 28.2% in Q2, 2020, while urban dwellers reported a rate of 31.3% up from 26.4%. In the case of underemployment among rural dwellers, it declined to 26.9% from 31.5%, while the rate among urban dwellers decreased to 16.2% from 23.2% in Q2, 2020.
  • For the period under review, Q4, 2020, the unemployment rate among young people (15-34years) was 42.5% up from 34.9%, while the rate of underemployment for the same age group declined to 21.0% from 28.2% in Q2, 2020. These rates were the highest when compared to other age groupings.
  • Under State disaggregation, Imo State reported the highest rate of unemployment with 56.6%, this was followed Adamawa and Cross River States with 54.9% and 53.7% respectively. The State with the lowest rate was Osun in the South-West with 11.7%.
  • For underemployment, the state which recorded the highest rate was Benue with 43.5%, while Lagos State recorded the lowest underemployment rate, with 4.5% in Q4, 2020.
  • A total number of 12,160,178 did not do any work in the last 7 days preceding the survey.

Introduction

In line with its statutory mandate to provide government and policymakers with reliable and timely information, the National Bureau of Statistics routinely computes and disseminates the labour force statistics. These statistics presented in this report are generated from a nationwide socio-economic survey, which sampled thirty-three thousand three hundred households across the country, both in urban and rural areas. Under this exercise, indicators such as the economically active population, labour force, unemployment and underemployment rates were computed to inform the work of policymakers and government. The last Unemployment survey conducted was in the 2nd quarter of 2020, which produced an unemployment rate of 27.1% and an underemployment rate of 28.6%. Following the success of the Telephone-based Abridged Labour Force Survey (LFS) under Covid-19, Quarter 2 (Q2) 2020, preparations continued to ensure the continuity of the production of this important economic indicator to provide much needed information on the level of employment and unemployment in the country. Following the lifting of movement restrictions by government in the q4 2020, in line with set Covid-19 guidelines and protocols for interactions, NBS conducted this round of the survey using the usual face-to-face interview for data collection. The results of the survey are hereby presented in this report.

 

Definitions and Methodology 

Labour force and non-labour force

The total population in Nigeria is divided into labour force (currently active) and non‐labour force (not currently active). The labour force population covers all persons aged 15 to 64 years who are willing and able to work regardless of whether they have a job or not. The definition of unemployment therefore covers persons (aged 15-64), who during the reference period were available for work, actively seeking for work but were without work. The non-labour force includes population below 15 or older than 64, as well as those within the economically active population i.e., 15‐64, who are unable to work, not actively seeking for work or choose not to work and/or are not available for work.  


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Examples of these are voluntary full-time housewives, underage children 14 and below, adults above 65, full time students, those in active military service, physically challenged and incapacitated persons whose incapacitation prevents them from working. Growth in the labour force therefore fluctuates and depends on the decisions by constituents of the economically active population on whether to work or not which varies across different cultures, religion, as well as various academic, economic, and family considerations.  For example, a housewife might decide to take up employment to supplement the family income due to changes in the husband's salary or due to added family needs, or a person might decide to take some time off work to either study for master's program or to recover from ill health.

 

Employment and Unemployment

A person is regarded as employed if he/she is engaged in the production of goods and services, thereby contributing to the Gross Domestic Product (GDP) in a legitimate manner, which is a component of the national accounts and receives any form or amount of compensation for that activity. Any of these can cause fluctuations in the economically active and labour force population at any given time. There is no universal standard definition of unemployment as various countries adopt definitions to suit their local priorities. However, all countries use the International Labour Organization's (ILO) definition, or a variant of it to compute unemployment. The ILO   definition covers persons aged 15-64 who during the reference period (which is usually the week preceding the time the survey is administered) were available for work, actively seeking work, but were unable to find work.

 

The Nigerian National Bureau of Statistics, like most countries in the world, uses a variant of the ILO definition such that unemployment is the proportion of those in the labour force (not in the entire economic active population, nor the entire Nigerian population) who were actively looking for work but could not find work for at least 20 hours during the reference period to the total currently active (labour force) population.  Accordingly, you are unemployed if you did absolutely nothing at all or did something but for less than 20 hours during the reference week.

 

Hence, the unemployment rate is calculated as a percentage of the number of unemployed persons in the labour force:


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Underemployment however occurs if you work less than full time hours, which is 40 hours, but work at least 20 hours on average a week and /or if you work full time but are engaged in an activity that under-utilizes your skills, time, and educational qualifications. Consequently, rural farmers only farming seasonally will be considered underemployed if they only work on their farms during the planting and harvests period and do nothing in between. If farmers are however working in dry and wet seasons as is increasingly becoming the case, they will then be involved in full time employment. This applies to drivers, cooks, cleaners, bankers, teachers etc who in most case work well over 40 hours and hence are considered full time employed as their working hours and skills meet the adopted methodology.

 

It is important to note that the international definition of unemployment, underemployment or employment is not a function of the quantity/suitability of wages earned nor it is a function of job satisfaction. Rather employment, underemployment and unemployment are treated strictly as a function of a person's involvement or otherwise in economic activity even if that activity is performed solely to make ends meet and not for satisfaction or enjoyment. The suitability of wages or job fulfilment is covered under other indices such as the living standard, poverty rate or happiness index, but not in determining whether one is employed, unemployed or underemployed, which is a function of economic engagement.

 

Survey Design and Methodology

The approach adopted in collecting the required information for this survey was the Computer Assisted Personnel interviewing (CAPI) approach. The data collection was carried out in all the 36 states of the Federation and Federal Capital Territory (FCT). Enumeration Areas (EAs) in both urban and rural areas were canvassed for the exercise.

 

The scope of this survey covered the following areas -

    •  Identification of Enumeration Areas (EAs) and Households
    •  Demographic characteristics of Households Members
    • Type of economic activities that household members engaged in
    • Working history/occupational profile of the labour force
    • Number and characteristics of unemployed persons

The sample design was done using the National Integrated Survey of Household (NISH) Frame. A 2-stage selection process was carried out to get the final sample size. First, 60 Enumeration Areas were selected in each State and the FCT, making a total number of 2220 EAs nationwide. A further selection was done in each of the EAs with 15 households selected for interview in each EA and 900 household per state covered. This gave a total of 33,300 households nationwide, which is a robust sample for state level reporting. 

 

There were 2 levels of trainings conducted to adequately equip the interviewers and data monitors for the exercise. The first was training of trainers (TOT). This was done at the Headquarters. Experienced officers from the headquarters were trained on the questionnaire developed and methodology for the conduct of the exercise. Others in attendance at this level of training included Coordinators and Stakeholders. Also trained at this level were headquarter data monitors and back-checkers. A further training was then organised for the interviewers. This training was carried out across the various states in the country, including the Federal Capital Territory. In attendance across states were teammates, team leads, state officers and zonal controllers where it applied. 12 interviewers were selected per state. The field staff were constituted into 4 Roving Teams in the State, with each team consisting of 1 team lead and 2 teammates. Each survey team covered 15 EAs, with 15HHs interviewed per EA. Fieldwork lasted for 17 Days.

 

A robust data monitoring mechanism was adopted to assure for quality of the returns. Monitoring of fieldwork was carried out by NBS headquarter staff, State officers and independent monitors. At the commencement of field exercise, NBS H/Q Monitors were on ground to monitor for 5 days. The NBS State officers monitored throughout the fieldwork and random spot checking of EAs was adopted for efficient and effective quality data collection.


Interviewers were mandated to submit their completed interviews to the server daily and a team of data editors would go through each of the returns to scrutinise before giving a final approval to go for analysis. Any suspicious returns were rejected and sent back for further review and clarification. Also, there was a team of back-checkers that would randomly call the respondents from the completed returns to confirm that they provided the information contained in the interviews. All this was done to ensure that the quality of data collected was reliable and of standard.

 

The processing of the returns was done by the NBS data processing team using STATA software, following the appropriate procedures and standards for computing labour force statistics.

 

Distribution of Responses by State

State

Responses

Response Rate

Abia

836

92.89%

Adamawa

875

97.22%

Akwa Ibom

884

98.22%

Anambra

802

89.11%

Bauchi

894

99.33%

Bayelsa

885

98.33%

Benue

865

96.11%

Borno

628

69.78%

Cross River

857

95.22%

Delta

899

99.89%

Ebonyi

856

95.11%

Edo

853

94.78%

Ekiti

871

96.78%

Enugu

828

92.00%

Gombe

875

97.22%

Imo

870

96.67%

Jigawa

818

90.89%

Kaduna

879

97.67%

Kano

807

89.67%

Katsina

834

92.67%

Kebbi

827

91.89%

Kogi

802

89.11%

Kwara

892

99.11%

Lagos

790

87.78%

Nasarawa

841

93.44%

Niger

899

99.89%

Ogun

676

75.11%

Ondo

859

95.44%

Osun

812

90.22%

Oyo

863

95.89%

Plateau

881

97.89%

Rivers

799

88.78%

Sokoto

860

95.56%

Taraba

894

99.33%

Yobe

873

97.00%

Zamfara

803

89.22%

FCT Abuja

858

95.33%

Total

31,145

93.53%




























Findings 

Response Rate

A total number of 31,145 interviews were completed out of the initial sample of 33,300, giving a response rate of 93.53% at the end of the survey. The table below shows the distribution of responses by State and their respective response rates.


Distribution of Working Age Population

The results of the survey indicate that the estimated number of persons in the economically active or working age population (15 - 64 years of age) during the reference period of the survey, Q4, 2020 was 122,049,400. This is 4.3% higher than the figure recorded in Q2, 2020, which was 116,871,186. Of this number, females represent 50.49%, while males account for 49.5%. Further disaggregation by age group shows that the 30.2% of the total active population is within the ages of 15-24, the highest among the age groupings. The age-group with the smallest active population is 55-64, with 10,221,108 or 8.37% of the total active population.

 

Distribution of Working Population by AGE & SEX

Age -Group

Male

Female

Total

15-24

      18,380,640

    18,483,275

         36,863,915

25-34

      13,625,712

    17,982,769

         31,608,481

35-44

      12,759,156

    12,791,331

         25,550,488

45-54

        9,868,444

      7,936,964

         17,805,408

55-64

        5,787,790

      4,433,318

         10,221,108

Total

  60,421,742

 61,627,657

   122,049,400

 

Labour Force

The number of persons in the labour force (i.e., people within ages 15 -64, who are able and willing to work) was estimated to be 69,675,468. This was 13.22% less than the number persons in Q2, 2020. Of this number, those within the age bracket of 25-34 were highest, with 20,091,695 or 28.34% of the labour force. This is the estimated number of persons within the economically active population or working population, that are available and willing to work. This implies that as of Q4 2020, only 57.09% of Nigeria's economically active population are in the labour force.

 

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Unlike in the economically active population, the age group that accounts for the highest number under the labour force is the 25-34 age group. This is expected as most persons within the age group of 15-24 are involved in one form of schooling or the other, hence are not willing and/or available for work. While females are more dominant under the active population, albeit marginal, the reverse holds for the labour force, where males are more dominant with 56.72%, with females accounting for 43.28%.

 

Labour Force - Q4, 2020

Educational Qualification

Age-Group

None

    20,652,597

15-24

      9,853,103

First School Leaving Certificate

      9,240,842

25-34

    20,091,695

Middle School Leaving Certificate

         326,025

35-44

    19,268,957

Vocational/Commercial

         233,535

45-54

    13,302,064

Junior Secondary School Certificate

      3,351,293

55-64

      7,159,648

Senior Secondary School Certificate

    22,031,170

Gender

A' levels

         748,228

Male

    39,523,050

NCE/OND/Nursing

      5,779,243

Female

    30,152,418

BA/BSc/HND

      5,940,546

Place of Residence

Tech/Prof

         187,033

Urban

    26,459,732

Masters

         349,306

Rural

    43,215,736

Doctorate

          73,859

Total

 69,675,468

others (specify)

         761,792

 

Unemployment and Underemployment Statistics - National Level

During the reference period, the computed national unemployment rate rose from 27.1% in Q2, 2020 to 33.3% in Q4, 2020, while the underemployment rate decreased from 28.6% to 22.8%. A combination of both the unemployment and underemployment rate for the reference period gave a figure of 56.1%. This means that 33.3% of the labour force in Nigeria or 23,187,389 persons either did nothing or worked for less than 20 hours a week, making them unemployed by our definition in Nigeria. This is an additional 1,422,772 persons from the number in that category in Q2, 2020. Using the international definition of unemployment, the rate was computed to be 17.5%.


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When considered by educational status, those reporting A 'levels as their highest qualification had the highest rate of unemployment with 50.7%, followed by those with first degree/HND at 40.1%. Those with Doctorate Degrees as their highest qualifications reported the lowest rate of unemployment, 16.9% during the reference period. Under the age-groupings, the highest rate of unemployment was recorded among the 15-24-year age-group with 53.4%, followed by those aged between 25-34 with 37.0%, together the youth population recorded an unemployment rate of 42.5%. In the case of underemployment by age grouping, those aged between 55-64 recorded an underemployment rate of 25.7%, the highest amongst the age groups. This was followed by those aged between 45-54 with 24.4%, while those with the lowest underemployment rate were those aged between 15-24 with 19.8%. A combination of unemployment and underemployment rates shows that those aged between 15-24 reported a combined rate of 73.2%, showing a serious challenge for the age-group in secure full-time employment. Female unemployment was highest among the genders with 35.2% while male was 31.8% during the reference period. A similar case was recorded for underemployment, 24.2% was reported for females, while males reported an under-employment rate of 21.8%. The unemployment rate among rural dwellers was 34.5%, while urban dwellers reported a rate of 31.3%. In the case of underemployment, rural dwellers reported a rate of 26.9%, while the rate among urban dwellers was 16.2%.

 

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Unemployment and Underemployment by State

In the case of unemployment by state, Imo State recorded the highest rate of unemployment with 56.64%. This was followed by Adamawa with 54.89% and Cross Rivers State with 53.65%. The States with the lowest rates were Osun, Benue and Zamfara States with 11.65%, 11.98% and 12.99% respectively. In the case of underemployment, Benue State recorded the highest rate with 43.52%, followed by Zamfara and Jigawa States with 41.73% and 41.29% respectively.

 

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Combining both unemployment and underemployment, the state that recorded the highest rate was Imo with 82.5% followed by Jigawa with 80%. Ogun and Sokoto states recorded the lowest of the combined rates, 26.2% and 33.7% respectively.

 

International Unemployment Rate

In comparison with other countries across the world, we apply the International Labour Organisation's standard of 1-hour work per week. Using this measure, Nigeria's recent unemployment rate is 17.5%. Comparing this rate internationally, out of 181 countries with rate published within the last 2 years, Nigeria currently ranks as the 19th country with the highest unemployment rate. The countries with the highest unemployment rates presently are Bosnia and Herzegovinian (33.7%), Namibia (33.4%), and South Africa (32.5%) while those with the lowest rates are Qatar (0.1%), Belarus (0.2%), Niger (0.3%) and Myanmar (0.7%). It is important to note that reference periods and methodology of calculating unemployment rate could differ across the countries. Therefore, a direct comparison of unemployment rate in different countries may not be valid.

 

Click Here to Download Q4 2020 Labour Force Statistics PDF Report


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