Unemployment rate in Nigeria: Playing with figures

Dear Africa interested individuals:
                                                        There are three major macroeconomic indicators globally: GDP/GDP growth, inflation (CPI) and unemployment rate.  Whenever a country's number is called, these are typically the first three indicators that are looked at before other indicators like balance of payments etc.  Nigeria's unemployment rate computation methodology was recently revised.  Before now, anybody employed must work for at least forty (40) hours before they are considered employed.  Any individual who works less than forty (40) hours is deemed to be unemployed as the natural assumption is that an individual's inability to work a forty hour work week was involuntary.  

Nigeria has now made a significant adjustment to unemployment computation.  An individual that works a twenty (20) hour work week is now deemed to be employed and not unemployed for the purposes of national unemployment computation.  This significant adjustment was motivated by the desire to better capture Nigeria's fast growing highly entrepreneurial workforce.  Nigeria computes its unemployment rate on a quarterly basis.  Nigeria's unemployment rate for Q1 2015 has post-computation adjustment been revised downward to 7.8% from 25.4% for the same period of Q1 2015.  This new rate is what is being reported through the online, print media and digital media.  As a consequence, Nigeria now has a lower unemployment rate than France (The world's fifth largest economy) at 10.5%.  

Proponents of the change state that it is necessary to create an unemployment computation method that fits the idiosyncrasies of the Nigerian environment.  In addition, the unemployment rate using the old and new methods are computed and published side-by-side so people can monitor whichever computation they feel is more relevant and valid for the world we live in today.  This statement is misleading because the advertised and widely disseminated unemployment rate is the 7.8% one.  While there are two computations, the new one that paints a much better picture of Nigeria's unemployment situation is being aggressively bandied around while the old one is left to rot in the archives for analyses purposes.  

A few years ago the Nigerian CPI basket was also reviewed and the influence (weighting) of two of the major drivers of inflation in Nigeria: food and transport were reviewed downward.  It was around the period that Nigeria was harping on the importance of attaining a single-digit inflation rate.  Inflation in Nigeria is not 9%.  Ask people on the ground who are into buying and selling and they will tell you the real story.  

I call all of the above window-dressing.  In this case, perception will not become reality.  I believe in the TRUTH.  Nigeria is what it is.  Let us not try to deny that by creating our own fantasies.  There is a book titled "How to use statistics and lie."    The truth will set us free while lies will continue to imprison us.  Playing with the numbers under any guise can only make Nigeria look better on paper.  Last time I checked, literally, paper does not hold water.    

The National Bureau of Statistics needs to: 
  1. Report unemployment numbers monthly and not quarterly.   
  2. Fully disclose (down to the miniscule details) how the unemployment rate is computed.  
  3. Focus on being as exact as possible with the information it releases and less on creating a rosy picture for journalists and the general public which belies the reality on the ground.  The bureau is mandated to produce exact, factual numbers and not necessarily "good" numbers. 
Good luck to them; it is not an easy job.  Do not make it any harder by playing with the numbers . 

Comments

  1. AnonymousJuly 28, 2015 at 11:19 AM

    Unemployment and inflation figures published by the NBS are truly tapered

    ReplyDelete

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