Nigeria’s unemployment rate drops to 4.1 per cent in 2023

By Onome Amuge.

Nigeria’s unemployment rate reduced sharply in two consecutive quarters from 33.3 per cent in 2020 to 5.3 per cent in the fourth quarter of 2022 and 4.1 per cent in the first quarter of 2023, according to the  National Bureau of Statistics (NBS).

Unemployment rate in this context is  defined as the share of the labour force, which is the combination of unemployed and employed people, who were not employed but were actively searching and were available for work.

The NBS unemployment findings titled, “Nigeria Labour Force Survey (NLFS) 4th Quarter 2022 and 1st Quarter 2023 Report,” said the decline in Nigeria’s unemployment figures aligns with the rates in other developing countries “where work, even if only for a few hours and in low-productivity jobs, is essential to make ends meet, particularly in the absence of any social protection for the unemployed.”

The report showed that about three-quarters or 73.6 per cent of working-age Nigerians were employed  in Q4 2022 and 76.7 per cent in Q1 2023. It also indicated that most people were engaged in some type of jobs for at least one hour in a week, for pay or profit.

According to the NBS, about one-third  or 36.4 per cent of employed persons worked less than 40 hours per week  in Q4 2022 and 33.2 per cent in Q1 2023. This, it stated, was most common among women, individuals with lower levels of education, young people, and those living in rural areas.

In contrast, the underemployment rate which is a share of employed people working less than 40 hours per week and declaring themselves willing and available to work more stood at 13.7 per cent in Q4 2022 and 12.2 per cent in Q1 2023.

Further analysis of the NBS data found that the share of wage employment was 13.4 per cent in Q4 2022 and 11.8 per cent in Q1 2023.

The NBS report noted that 73.1 per cent of Nigerians operated their own businesses or engaged in farming activities in Q4 2022 compared to 75.4 per cent in Q1 2023. A further 10.7 per cent in Q4 2022 and 10.6 per cent in Q1 2023 were engaged helping without pay or profit in a household business, while 2.6 per cent were engaged as apprentices/Interns  in Q4 2022, and 2.2 per cent in Q1 2023.

Meanwhile, 22.3 per cent  of the working age population were recorded to be out of labour force in Q4 2022, against 20.1 per cent  in Q1, 2023. Notably, the rate of informal employment among the employed Nigerians stood at 93.5 per cent in Q4 2022 and 92.6 per cent in Q1 2023.

The country’s unemployment figure which is an outcome of the labour force survey (LFS) conducted in Nigeria, is coming two years after the last official data of 33.3 per cent for the fourth quarter of 2020 which was released in March 2021.

The NBS noted that it has enhanced its methodology of collecting labour market data through the Nigeria Labour Force Survey (NLFS) in line with International Labour Organisation (ILO) guidelines.

The statistics bureau further disclosed that the data collection for the revised NLFS is based on a sample of 35,520 households nationwide, and conducted continuously throughout the year, with national-level results produced quarterly and state-level results at the end of a full year.

Though the new methodology appears more robust and internationally compliant compared to previous ones, the NBS said the decline in the unemployment rate is not entirely equivalent to a decrease in job losses or vice versa.