Nigeria’s underemployment is worse than its unemployment problem

May 23, 2023|Fadekemi Abiru

Key questions this article answers: 

  1. The National Bureau of Statistics has unveiled a new unemployment methodology. How does Nigeria's new way of measuring employment show the extent of the underemployment problem?

  2. Based on the new methodology, Nigeria's underemployment problem is glaring. What does underemployment look like across states, and what are the implications?

The recent update to the National Bureau of Statistics’ (NBS) employment methodology has unveiled a troubling reality plaguing Nigeria’s labour market. 

By expanding the definition of employment to include anyone working as little as one hour per week instead of the previous requirement of 20 hours, a clearer understanding of Nigeria’s underemployment crisis emerges. 

The significance of this adjustment may appear inconspicuous at first glance, but its implications are vast.

One rationale behind this change is to align Nigeria’s unemployment measurement with internationally recognised standards set by the International Labour Organisation (ILO). This alignment with global benchmarks is undeniably positive as it facilitates meaningful cross-country comparisons, lowering investment decision costs. 

However, this article argues that while this methodological shift might downplay the severity of unemployment in Nigeria (which tends to be the main focus), it exposes the magnitude of the underemployment issue, demanding our attention. 

Unveiling the impact of the new methodology

In economics, three key concepts shape our understanding of work: unemployment, employment, and underemployment. Unemployment represents the absence of work, where individuals actively seek jobs but struggle to find them. This is typically measured using the unemployment rate, which, going by the NBS’ previous methodology, stands at 33.3% (basically 1 in 3 Nigerians).

On the other hand, employment signifies productive engagement, where people secure jobs and contribute to the workforce. However, nestled between the two lies the enigmatic world of

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