AACS Fortnightly 
(Mondays) 
28th August 2023

From the Chairman’s Desk,

Playing The Ostrich: The CBN & NBS Debacle

Last week JP Morgan estimated Nigeria’s net FX reserves to have fallen to $3.7bn at the end of Q4 2022, owing to larger currency swaps and borrowings. A few days later, The Central Bank of Nigeria (CBN) faulted this estimate and reiterated the previous official estimate of $33bn. Similarly, the National Bureau of Statistics (NBS) revised the nation’s unemployment rate from 33.3% as at Q4 2020 to 4.1% in Q1 2023 based on a new methodology in data collection and interpretation that has little to do with actual jobs created. Although the CBN disputed the figure and the NBS showed a methodology, what’s the impression of investors and FDI? Perception is reality most times and reality does not support the enthusiastic position of both bodies.

AACS supports the current policies of the new government which to a large extent brings our realities to light as expressed in our Chief Editor’s post last week https://lnkd.in/e87VpKt3. There is empirical evidence that suggests that the effective unemployment rate in Nigeria is over ‘4.1%’. The new methodology of grading those who work at least one-hour a week as employed does not truly represent the millions of Nigerians who find it difficult to hold jobs over a period of time. Applying the International Labour Organization (ILO) methodology looks good on paper, but is not reflective of the nation’s current unemployment situation and may affect effective planning. In any case, the facts behind those figures even in the methodology explains the real enormity of the problem and we need to stick to it or worse case scenario put a caveat in the interpretation that is as bold as the headline generated.

One thing the new administration has done well is to cut the façade and bring to the Nigerian people the true state of our economy so we could be prepared. This data presentation style of the NBS and CBN is looking different as it looks like playing the ostrich. The real foreign reserve looks close to $17bn even if we refuse JP Morgan’s analysis, and the unemployment rate is closer to 33% rather than 4.1% when we scrutinise the real facts behind the data. Now let’s continue with the ongoing government’s corrective policies to deal with our ailing economy.

Falil Ayo Abina

LinkedIn: https://www.linkedin.com/posts/aacs-ng_cbn-nbs-reality-activity-7101813184457527297-4TiF?utm_source=share&utm_medium=member_desktop