Need For Nigeria To Focus More On Productivity

Nigeria, a nation known for its hardworking and ambitious people, might be perceived as a rich country by outsiders. However, when we delve deeper, the reality doesn’t align with this perception. According to the Global Competitiveness Index 4.0 2019 Rankings, Nigeria ranks a mere 116th out of 140 countries and is 15th among African nations. This ranking highlights Nigeria’s level of productivity, an aspect that demands urgent attention for the nation’s sustainable growth.

Productivity is a crucial measure of how efficiently a country combines capital and labor to produce more with the same level of inputs. Labor productivity, measured by output per person employed or output per person hour, is a common focus. However, a more comprehensive measure of productivity growth is the total factor productivity, which considers changes in both capital utilisation and the size of the labor force.

The importance of productivity lies in its direct impact on living standards. It quantifies how effectively an economy utilizes its available resources by relating input quantities to output. As the adage goes, productivity isn’t everything, but in the long run, it’s almost everything. Low productivity can result in stagnant economic growth, which poses a significant challenge for Nigeria.

Conversely, higher productivity can lead to various benefits. It can result in lower unit costs, which may be passed on to consumers in the form of lower prices, stimulating higher demand and increased output. Additionally, improved productivity enhances competitiveness and trade performance, making firms more competitive in global markets.

Another benefit of higher productivity is higher profits for businesses. Efficiency gains lead to increased profitability, which can be reinvested to support long-term business growth. Higher productivity also enables businesses to afford higher wages for their more efficient workers. Furthermore, an economy with improved productivity can experience a higher trend growth in national output.

Productivity improvements can also result in the reallocation of labor from one industry to another. For example, greater efficiency in farming can increase production yields, providing more food for export or to meet the needs of a growing urban population.

Enhancing national productivity requires deliberate policy efforts by the government. Effective productivity improvement largely depends on the integration and coordination of various social forces, including government institutions, employers, workers’ representatives (such as trade unions), and non-governmental organizations. These forces play a major role in promoting productivity through direct intervention, coordination, professional education and training, and raising public awareness of productivity consciousness.

The role of the government in boosting productivity is crucial. Governments must provide the necessary infrastructure and create opportunities for growth. Infrastructure includes education and training, health services, housing, power supply, water resources, transportation, communications, research and development, and technological advancements. For example, substantial government investment in research and development has facilitated growth in agriculture, highways, airports, water, and railway systems in many countries, thereby supporting productivity increases in various industries.

Nigeria’s focus on productivity is a critical determinant of its economic growth and development. The nation must prioritise strategies to enhance productivity, such as investing in education and training, improving infrastructure, and fostering an environment that encourages innovation and efficiency. By harnessing the potential of its hardworking and ambitious population and implementing effective policies, Nigeria can pave the way for sustained economic growth and improved living standards for its citizens.

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