Thread by @yinkanubi

We all have seen the big number - 21m Nigerians unemployed. If you paid attention during the elections, you can be forgiven to believe this is the whole story. But it's not. Which is why in collaboration with @OpenFundingNG we will be reviewing the #UnemploymentTimeBomb

This will be a three part thread over the period of a few weeks. The purpose will be to break down the unemployment numbers by State and see if there are trends we need to track. It'll be a continuation of the conversation started below by @OpenFundingNG

https://twitter.com/OpenFundingNG/status/1133281538211307520?s=20

We will also identify and focus on the 10 Best States and the 10 Worst States. We will match their unemployment figures with their revenue and other relevant data such as debt, GDP and crime rate so that we can better appreciate the challenges ahead. #UnemploymentTimeBomb

At the end of this series, we will recommend from a Statistical point of view what each State Government needs to do to track the numbers and ensure they are doing the needful to reduce the #UnemploymentTimeBomb in their States. You might want to ask why we're focusing on States.

1. Unemployed Nigerians don’t exist in a vacuum, they live in States. They're as well affected by policies of the FG as they're affected by policies of the State. If State & FG policies don’t work in tandem, the impact will be negative regardless of efforts. #UnemploymentTimeBomb

2. Secondly, the FG controls less than 50% of Federal Revenue. The bulk of the revenue actually goes to States. While we focus on the FG, we must as well focus on the States as well. They are also accountable to deal with the #UnemploymentTimeBomb as it affects their States.

3. Lastly, when we break down the numbers per State, we can see clearly a path to solving this big problem in micro units and clusters. There is no one big bang solution to this problem, there is rather a 37 States + 1 Federal Solution to this #UnemploymentTimeBomb.

But first, let us define the “problem”.

Nigeria has an unemployment rate of 23.1% as at Q3 2018, up from 18.8% in Q3 2017 with Akwa-Ibom topping the top 10 in terms of rate and Rivers topping the top 10 in terms of population. Osun recorded lowest in terms of rate and population

But that’s not the complete picture. The other part of the picture is that between Q3 2017 and Q3 2018, Nigeria added 5.4million people to the labour force. This means that Nigeria must create at least 450K jobs every month to accommodate new entrants only. #UnemploymentTimeBomb

From data published by the NBS, we can infer (by looking at the net full time + part time employment between Q3 2017 - Q3 2018) that 1.7m people lost their jobs while 2.2m people got jobs. Giving a total net gain of 453k people. #UnemploymentTimeBomb

If we add the 1.7m who lost jobs to new entrants, it'll bring the number of new jobs to be created every single month to 592k nationally. Now that's a big ask even if you are Thanos with the ability to change circumstances with a snap of your fingers. #UnemploymentTimeBomb

This is not a stock, it is a FLOW. As long as the highest component of our population is under 40 and we have a birth rate of 3.2%, this “flow” will continue and the numbers of people added to the labour force and potentially to the unemployment figures will keep increasing.

Imagine having 10 unemployed people in Jan and you create 5 jobs in Jan. Unemployment falls to 5, but by Feb, another 10 people are added and you now need to create 15 jobs. You will never get a break. In my opinion, we only have two options. #UnemploymentTimeBomb

1. Introduce policies to reduce the number of entrants into the job market (i.e. population control) or

2. Introduce policies to keep creating jobs at the pace of new entrants. This will not reduce the unemployment rate, but it will stop the bleeding. #UnemploymentTimeBomb

On the first option, I've shared my view on why I think our population is over-stated and also what I think we need to do to control it. You can check the links below to read my thoughts. To the extent we've no policy to address this, we must plan with it

https://twitter.com/yinkanubi/status/1131832618687827968?s=20

That leaves us with option 2 – Introduce policies to create jobs. There are three ways to achieve this.

1. Direct Govt Jobs. This is govt at all levels employing people
2. Create enabling environment for Private sector led job creation (Agric, Manufacturing)
3. Combo of 1 and 2

Option 1 is the default go to option of most government. They simply want to spend their way into reducing unemployment. While it gives a temporary relief in the numbers, given the fiscal limitations of most States and the FG, it is not a sustainable option. #UnemploymentTimeBomb

Data suggests that the 1st & 2nd Npower prog reduced the unemployment rate by bringing in 500k graduates, but like we analysed above, that's a number that needs to be brought in monthly and not biannual. It's simply not sustainable in the long term because of fiscal challenges.

In reality, the non-graduate aspect of Npower that comprise of skills transfer seem a more sustainable model because of its ability to create jobs with less pressure on lean fiscal resources. Creating the enabling environment for options 2 and 3 to work must be the way to go.

At the end of this series, we will be recommending ways to analyse the data to focus on achieving the desired results. For now, let's explain who is considered employed and unemployed in Nigeria. #UnemploymentTimeBomb

To be employed in Nigeria, you need to work at least 40 hours per week. If you work 40 hours per week you are considered to be in full time employment. If you work between 20 – 39 hours per week, you are considered to be under-employed. #UnemploymentTimeBomb

If you work less than 20 hours per week (i.e. 0 – 19 hrs), you are considered unemployed. This is further broken into two categories. 1. Those who did some work within 1 - 19hrs per week and those who did absolutely nothing for an entire week. #UnemploymentTimeBomb

It is important to note that the larger percentage of those unemployed (i.e. 53%) still earn a living somewhat by working less than 20 hours per week. While a consistent percentage - 47% (i.e. 9.7m people) did nothing whatsoever. #UnemploymentTimeBomb

If you are a Governor (Chief Security Officer by name only), this is the number that should trouble you and keep you awake at night. We matched the data of the Unemployed who did nothing and the crime rates in each state to see if there is a trend and the results are interesting

For instance, Lagos which has the highest number of unemployed people doing nothing also has the second highest ratio of crime committed. While Abia State which ranks 20th has the highest ratio. Kogi State despite ranking 9th has the lowest ratio. #UnemploymentTimeBomb

While this data does not necessarily show that the number of unemployed persons doing nothing contributes to increase in the crime rate per state, it should concern any policy maker as the numbers show those who can potentially be led into a life of crime. #UnemploymentTimeBomb

It'll be fitting to end today's series by acknowledging the States with the top 10 net gains in Jobs and the one with the top 10 net loss. The data shows that Lagos actually created the highest number of jobs followed by Rivers while Taraba lost d highest number followed by Kano.

In conclusion, it's safe to say that we've a problem. A ticking time bomb and it is called unemployment. If we do not tackle it by ensuring the right policies are in place to create more jobs than we are adding to the labour force, then we would be doing ourselves a dis-service.