Unemployment Rises to 12.1% in Q1’16 from 10.4% in Q4’15 - NBS


Friday, May 20, 2016 4:48AM/ NBS

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Brief Methodology

In computing the unemployment rate, the total population 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. The definition of unemployment therefore covers persons (aged 15–64) who during the reference period were currently available for work, actively seeking for work but were without work.

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.

The category of persons considered not in the labour force include those not between 15-64(economic active population) 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.

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 in-capitation prevents them from working.

Growth in the labour force therefore fluctuates and depends on the decisions by members of the economically activate population on whether to work or not which varies across different cultures, religion, as well as various academic, economic and family considerations

There is no standard definition of unemployment as various countries adopt definitions to suit their local priorities. Virtually all countries however use the International Labour Organization (ILO) definition, or a variant of it to compute unemployment. The ILO definition covers persons aged 15–64 who during the reference period (usually the week preceding the survey period for at least one hour), were available for work, actively seeking for work, but were unable to find work.

The Nigerian National Bureau of Statistics like most countries in the world now uses a variant of the ILO definition such that the 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 not for up to 20 hours in a week. Underemployment however occurs if you work less than full time 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 underutilizes your skills, time and educational qualifications.

Accordingly 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 season as is the case recently they will be considered involved in full employment.

This applies to drivers, cook, bankers, teachers etc who in most case work well over 40 hours and hence are considered fully employed as their working hours and often skills meet the adopted methodology. It is important to note that the pervasive international definition of unemployment, underemployment or employment is not a function of the quantity/suitability of wages earned, nor on whether the person involved in a particular job or economic activity is looking for another job or unhappy with his current job.

Rather employment, underemployment and unemployment are treated as a function of a person’s involvement or otherwise in economic activity even if that activity is aimed at making ends meet. The suitability of wages is covered under other quality of living standards indicators such as poverty etc and not in determining whether one is employed, unemployed or underemployed which is a function of economic engagement.

Highlights of Unemployment and Underemployment in Q1 2016

As usual, unemployment and underemployment was highest for persons in the labour force between the ages of 15-24 and 25-34 years which represents the youth population in the labour force.

The unemployment rate within the review period was typically highest for those within the ages of 15-24 at 21.5% in Q1 2016 (56.1% using old methodology), up from 19.0% in Q4 2015 and 17.8% in Q3 2015, while the underemployment rate for those within the ages 15-24 increased slightly to 34.6% in Q1 2016 from 34.5% in Q4 2015.

For those in the labour force within the ages of 25-34 however, unemployment rose to 12.9% in Q1 2016 (32.8% using old methodology), from 11.4% in Q4 2015, while underemployment remained at 19.9% in Q1 2016 similar to Q4 2015.

Accordingly, 56.1% of Nigerians in the labour force (not entire population) aged 15-24 years were either unemployed or underemployed in Q1 2016 compared to 53.5% in Q4 2015 while another 32.8% aged 25-34 years were either unemployed or underemployed in Q1 2016 compared to 31.3% in Q4 2015.

Accordingly, out of a total youth labour force of 38.2 million (representing 48.7% of total labour force in Nigeria of 78.48mn), a total of 15.2mn of them were either unemployed or underemployed in Q1 2016 representing a youth unemployment rate of 42.24%.

Unemployment and Underemployment by Gender

Unemployment and underemployment continued to be higher for women than men in Q1 2016. While 14% (36.2% using old methodology) of women in the labour force (those between 15-65 willing, able and actively working or searching for work) were unemployed in Q1 2016, another 22.2% of women in the labour force were underemployed in Q1 2016. On the other hand, 10.3% (26.5% using old methodology) of males were unemployed in Q3 2015, while another 16.2% of males in the labour force were underemployed.  

Urban and Rural Unemployment and Underemployment

While underemployment continues to be more of a rural phenomenon (23.5% rural underemployment compared to 9.5% urban underemployment) given the nature of their jobs largely as seasonal farmers, unemployment is more of a concern in urban areas (15% urban unemployment compared to 10.8% rural unemployment) given the preference of graduates to search for formal white collar jobs located mostly in urban centres.  

Country Comparisons of Unemployment

Unemployment is not just a Nigerian problem. The International Labour Organisation (ILO) on whose recommendation most countries in the world unemployment methodology is based including Nigeria, states that 201 million people globally are unemployed and this may rise to 219 million by 2019.

The ILO has previously forecast a global unemployment rate of 5.9% this year and next, compared with 5.5% before the global financial crisis in 2007, implying that Nigeria’s Q1 2016 unemployment rate of 12.1% (not including an additional 19.1% underemployment) is higher than the global average.

The highest unemployment rate in the world is recorded in Djibouti (54%), Congo (46%), Bosnia and Herzegovinian(43%), Haiti (41%), Afghanistan (40%) and Kenya (40%) while the lowest are found in Qatar (0.2%), Cambodia (0.3%), Belarus(1%), Benin (1.0%), Thailand (1.04%), Madagascar (1.2%) Laos (1.4%) and Guinea Bissau(1.8%).

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