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BusinessDay analysis shows that the productivity of the Nigerian labour force went up by 7.54 percent in Q3 2018. The analysis which was based on a weekly work rate of 35 hours show that the average labour produced N810.61 or $2.22 (N365/$) per hour in the quarter from N753.79 in Q2 2018.
The National Bureau of Statistics (NBS) Productivity Report (2016) showed that the annual productivity rate rose continuously from N471.94 in 2011 to N718.14 in 2015, before falling to N684.43 in 2016. According to BusinessDay findings, the figure was N792.62 in 2017 Q4 and fell to N709.23 in 2018 Q1.
Labour productivity also referred to as workforce productivity measures how much of the GDP is produced at an hourly rate and it is a good indicator of labour efficiency.
Globally, it is a measure of output per unit of input and how much labour effort is needed to produce a unit of output. To compute, the Gross Domestic Product for a given year is divided by the Labour input in the same year. More specifically, the national Bureau of Statistics measures it as the ratio of GDP at current prices (N) to the Total Hours Worked per Year.
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Addressing issues affecting labour productivity in Nigeria, Bongo Adi a senior lecturer at Lagos Business School explains that labour and capital complement each other in the creation of output and both are affected by the level of technology available in the economy.
“When you talk about the determinants of labour productivity, you are looking at competence level of individuals; you’re looking at human capital. The most important thing is the technology available, so what capital endowment does the average worker have access to in Nigeria?” he said.
Speaking further, he lamented the state of infrastructure which he says handicaps labour.
“When you put that (the aforementioned) together, you need to consider also the state of infrastructure, which is also an indirect input in production. Labour cannot work alone, it works in consonance with capital and both work together with infrastructure… as long as infrastructure is poor and capital endowment is very low, we definitely would end up with low level of productivity.”
Proffering solutions to the current situation Adi said there is a need for Firms have to acquire the skills that would make them more efficient.
“To build labour productivity is a long term process. There is a supply side which requires people to acquire the right skill. On the demand side there needs to be demand for high level of skills which would encourage people to acquire high level skills. The amount of skills people will have is a direct consequence of the demand by industries. ”
He further advised this would be the necessary measure and although it might create unemployment in the short run, the long term benefits would be an improvement in the quality of output Nigerians produced.
“It is not a matter of numbers, it is matter of quality. Take for instance, if you have a million people farming on a million of acres of land, they are not going to produce much but if you have an advanced system then you have just few tractors, they would produce a billion times over what low skilled Nigerians would. Few (skilled) people driving the tractor therefore would be more productive than few low skilled farming without,” Adi said.
Analysts say there is much that needs to be done by both by the Government and Private sector to improve the level of productivity of labour in Nigeria. While it behoves on the government to provide infrastructural facilities and invest in the education of the populace, the private sector has to encourage labour to acquire the skills that ensure they add more value in production, they said.
Segun Adams
