NBS Report Reveals Self-Employment Increase In Nigeria, Work Age 15 Yrs Upwards

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The Nigerian unemployment rate plunged to 4.1 percent in the first quarter (Q1) of 2023, from 33.1 percent in 2020, a National Bureau of Statistics (NBS) has revealed.

The underemployment rate, defined by NBS as a share of employed people working less than 40 hours per week and declaring themselves willing and available to work more, moved from 13.7 percent (Q4 2022) and 12.2 percent (Q1 2023) in three months.

This is contained in the Bureau’s labour report, titled, ‘Nigeria Labour Force Survey (NLFS) for Q4 2022 and Q1 2023’, launched on Thursday.

The NBS had in April 2023, spoken of its intentions to adopt a new methodology that would conform to recent International Labour Organisation (ILO) guidelines for computing labour force statistics, stating that the process would reveal a sharp drop in Nigeria’s unemployment rate.

The agency explained that the expansion of the definition of employment to include those working less than an hour per week, instead of the previous requirement of 20 hours per week, provided a clearer picture of the true extent of Nigeria’s underemployment crisis.

The NBS said this was because it excluded people who working in low-paying, insecure jobs, or in jobs that do not utilise their skills and abilities.

Based on the new report, the unemployment rate fell by 29 percent in three years, relative to the figure announced in 2020.

The NBS said the latest data aligned with the rates in other developing countries where work, “even if only for a few hours and in low-productivity jobs”, were essential to making ends meet, particularly in the absence of any social protection for the unemployed.

The Bureau said that the informal sector in Nigeria, which is made up of businesses that operate outside of government regulation and are largely unregistered, stood at 92.3 percent of the labour force in Q1 2023.

This gives credence to experts’ argument that Nigeria’s economy is largely driven by the informal sector.

The informal sector includes commercial bus drivers, artisans such as dressmakers, hairdressers, vulcanisers etc., and mainly those in the low socio-economic strata, with low skills and poor education.

The bureau said informal employment among the employed Nigerians was 93.5 percent in Q4 2022 but went down to 92.6 percent in Q1 this year.

Read the report: “In Q4 2022, 93.5% of employed Nigerians were engaged in informal employment including agriculture, while 90.9% in informal employment excluding agriculture.

“Similarly, in Q1 2023, 92.6% of employed persons were in informal employment which includes agriculture, while 89.4% in informal employment which excludes agriculture.

“This shows a significantly high rate of informality in the country, which is a common phenomenon in most countries in West and Sub-Saharan Africa”.

Although Nigeria is often described as an oil and gas-based economy, the NBS data suggested that the country’s economy was primarily supported by micro, small, and medium-sized enterprises (MSMEs), particularly nano and kiosk businesses.

The report went on to say that 73.1 percent and 75.4 percent of employed Nigerians in Q4 2022 and Q1 2023 respectively, worked in their own businesses or were engaged in farming activities as their primary jobs.

In contrast, only a small percentage of employed Nigerians were wage earners in their primary jobs, with 13.4 percent in Q4 2022 and 11.8 percent in Q1 2023.

Read the report further: “A further 10.7% (in Q4 2022) and 10.5% (in Q1 2023) of employed Nigerians were primarily engaged in helping in a household business, receiving pay or profit indirectly even if it was not their own business.

“A small proportion of employed Nigerians were primarily engaged as apprentices or interns (2.6% in Q4 2022 and 2.2% in Q1 2023). Those helping a household member who worked for someone else was about 0.2% in both Q4 2022 and Q1 2023″.

The NBS also said in the previous methodology, the working-age population was defined as persons aged 15 to 64.

This indicator, the agency noted, measured the share of the working-age population in the total population. However, the revised methodology adopted in the latest labour force report changed the working age to 15 years and above, without stipulating any retirement age.

NBS said the labour force covered those who were either employed or unemployed, meaning that some Nigerians are outside the labour force but are in the potential labour force.

Explained the Bureau: “Some people are not employed but they are either searching for paid work but not available to work or they are available to work but they are not searching; this is the potential labour force population.

“The share of working-age Nigerians who were out of labour force but in the potential labour force was 3.7% in Q4 2022 and 2.3% in Q1 2023″.

The NBS report also showed that employed men were more likely to engage primarily in wage jobs than employed women, just as it defined primary job as the job an individual spent the most time doing.

An index analysis of the data revealed that the share of employed men who worked in their own businesses or in agriculture was 73.1 percent in Q4 2022, while the value for women stood at 76.9 percent.

This also observed that women who worked in their own businesses or agriculture increased to 78.7 percent in Q1 2023, but the number for men declined slightly to 72.1 percent, meaning that there are more businesses run by women in Nigeria.

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