More affluent Nigerians now invest in agriculture – NLPS report

The September 2020 update of the COVID-19 National Longitudinal Phone Survey (COVID-19 NLPS) carried out by the National Bureau of Statistics (NBS), in collaboration with the World Bank, to assess the socio-economic impacts of the pandemic on households, reveals that over 40.0% affluent Nigerians are now engaged in agriculture compared with 32.0% in July/August 2018, indicating an increasing share of well-to-do Nigerians participating in the sector.

More affluent Nigerians now invest in agriculture - NLPS report

The report, which also reveals no reprieve for Nigerian households’ incomes and consumption, is a pointer that the pandemic could be inducing a reallocation of labour in the economy in response to the economic shocks and to ensure survival.

The survey, accordingly, maintained the sample of 1,950 respondents but with an improvement in data collection method.

Information relating to employment was gathered from up to six working-age individuals between 15- 64 years, in a household rather than focusing on only the main respondent, mainly older male.

This improvement, according to the report, allows for a more detailed individual-level analysis of working situations, enhancing the verification of trends from previous rounds based only on one respondent, report statistics on overall working situation and unemployment, and assess the differences in labour market characteristics in terms of gender and education.

This round of the survey looked at the economic impact of the pandemic from the labour market perspective, focusing on the overall working situation of respondents, including all working age adults, their gender and employment status and the distributional impacts of the COVID-19 crisis.

The analysis of the survey responses indicates that the poor economic conditions observed in previous rounds of the survey remains unabating.

An examination of the working status of the respondents revealed that the proportion of respondents who are working stabilised at 85.0% in September 2020, close to the pre- COVID level of 86.0%.

This improvement is best among the respondents in the rural areas which reached the pre-pandemic levels with a share of 87.0%.

However, the pace of recovery in urban areas has been slower at 78.0% relative to 84.0% before the pandemic.

The improvement in the rural areas during the period could be partly linked to the normal cycles in agriculture as opposed to the devastating impact on sectors such as services and industry, concentrated in the urban areas.

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In assessing the overall working situation of all working age adults, the survey focused on people who were working – either for pay or profit – on a subsistence level.

The share of respondents in the working age population remains slightly lower at 71.0% in September 2020 relative to 77.0% in July/August 2018 round of the 2018/19 General Household Survey-Panel (GHS-Panel).

Compared with the previous rounds of the COVID-19 NLPS, the expansion of the database to include multiple individuals in a household resulted in a broader statistics of the employment situation of working age adults.

The rural areas recorded a sharper reduction in the proportion of people working from 80.6% prior to the crisis to 73.5% in September 2020 while the decline in the urban area was slower at 66.0% from 68%.

Equally, in September 2020, 7.0% of the working age population were temporarily absent from work, implying that people in this category were temporarily off-work for 7 days but had a job to return to, this was higher than the 2.0% recorded before the pandemic, reflecting the distortions relating to the crisis.

In terms of unemployment, 7.0% of the working age population was unemployed in September 2020 from 9.0% earlier. Excluding subsistent workers, this stood at 9.0% from 13.0% before the crisis.

Although this does not reflect the current unemployment situation in the country, the moderation indicates people’s willingness to be economically active for survival.

Furthermore, workers in the  survival reeling from the pandemic as the share of working individuals in both sectors fell to 4.0% and 20.0% respecvices and industrial sectors are still tively, from 8.0% and 23.0%.

This is not surprising as the sectors struggle to recover from the lockdown and restrictive measures enforced earlier in Q2:2020.

However, the share of the working population engaged in commerce improved between July/August 2018 and September 2020 to 26.0%, from 18.0% while that of agriculture remained slightly unchanged at 48.0%.

We believe the ease of access to trade goods and services as an alternative to job loss contributed to the improvement in the commerce sector.

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The survey also revealed a shift to family business with 44.0% of respondents engaging in family businesses other than farming in September 2020 relative to 40.0% in the pre-COVID period.

However, the preference for other family businesses over farming could heighten the risk of a food crisis in the agriculture sector, alongside other structural factors impacting the sector.

Findings from the survey also revealed that COVID-19 could be widening gender inequality in the labour market with more impact on women.

Between July/August 2018 and September 2020, the share of working age men and women fell to 78.0% and 65.0% from 82% and 72% respectively.

The pandemic has exposed the vulnerability of most working women and we believe this is because women tend to hold jobs in sectors most impacted by the pandemic such as services and retail.

Additionally, from the survey, women are more likely to stop work than men considering that almost twice the share of women compared to men became economically inactive in September 2020, a proportion of 13.0% and 7.0% respectively.

Furthermore, the increased participation in commerce has been propelled by women with less education, as reported in the survey.

The share of women engaged in commerce jumped to 42.0% in September 2020, from 23.0% in July/August 2018.

This is expected given that the ease of entry into the sector provides a faster coping mechanism for women out of jobs. Unsurprisingly, the reverse was the case in services and industry, including agriculture.

The analysis of the distributional impacts of the pandemic raises concern of worsening poverty in the country.

Individuals across the consumption distribution group have been affected by the crisis; however, the reduction in the share of people working was largest for households in the poorest consumption group.

The proportion of working-age individuals in this group fell to 70.0% in September 2020 from 79.0% prior to the COVID-19 crisis with most workers moving to the commerce sector.

Meanwhile, while those working in the services sector reduced to 15.0% from 21.0%, the share in the industrial sector worsened to 2.0% from 4.0% before the pandemic.