‘Unemployment Rate Contrast FG’s Economic Growth Figures’

Despite statistics by the Federal Government that showed that the nation’s economy has witnessed appreciable growth in the last few years, the 2011 Annual Socio-Economic Report, by the National Bureau of Statistics (NBS), has some worrying data on the labour market.

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The NBS report obtained by THSDAY revealed that unemployment has grown from 12.3 per cent of the labour force in 2006 to 23.9 per cent in 2011.
The report also showed that Nigerians in the 15-64 age brackets available for, and in search of employment were unable to find one.
Analysts however, believed the 15-64 age bracket was a stringent definition since it includes those who would feature separately in similar surveys as underemployed.

Experts also advised government to revise its growth numbers since simple economic theory stipulates that economic growth must conform to social change.

Meanwhile, the NBS report also revealed that unemployment rate is higher in rural areas (25.6 per cent in 2011) than urban (17.1 per cent), which “helps to explain the rapid growth of the population in the largest cities such as Lagos. New entrants to the labour market averaged 1.8 million per year in 2006-11, and are forecast by the NBS to exceed 8.0 million in 2015.”

Analysts at FBN Capital believe the disparity in the economic growth and unemployment figure is as a result of the poor quality of data available for assessments.

According to FBN Capital, “It may be asked why the rate of unemployment has soared when Gross Domestic Products (GDP) growth has settled above 7 per cent per year and when population growth is estimated at a little below 3 per cent per year.

“A partial answer could lie in the quality of the data. The NBS will shortly release its new accounts series. The first reweighting for almost 20 years will produce a large increase in nominal GDP and, quite possibly, a slight fall in historic growth rates.”

The structure of the economy, the experts said, provided a more telling answer. “Manufacturing has shed tens of thousands of jobs in the past decade. Textile companies in the north have suffered greatly in this respect. Nigeria is producing less and importing more of its consumption needs.

“In the public sector the unemployment rate should rise now that the federal government is reporting savings from the elimination of ghost workers. There will also be losses as the FGN’s transformation agenda overhauls public agencies such as the Power Holding Company of Nigeria (PHCN).

“In the economy as a whole, the increase of the national minimum wage from N7,500 to N18,000 per month is very likely to limit job creation. Unemployment does not directly create fiscal costs since there is no welfare state. However, as noted by the governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido, in an address on 6th February, this year, there is little doubt that it contributes to social unrest.”


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