The latest labor productivity report from the National Bureau of Statistics indicates that although Nigerians worked more hours in 2016 compared to the last five years, output waned.
According to the NBS, Nigerians worked more in hours 2016 than any year since 2011. Total numbers hours worked per year peaked at 148,283,982,466 in 2016 as against 131, 096,143,908 in 2015 and 133, 450, 380, 069 in 2014.
But Labor productivity dipped in dollar terms to $ 2.24 from $3.61 the previous year, and in naira terms, dropped to N684 from N718 same period, though having risen consistently since 2011.
Labor productivity measures the amount of goods and services produced per one hour of labor, meaning specifically, the amount of real gross domestic product (GDP) produced by an hour of labor.
Labour force, consistently rose consistently from 2011 and showed a noticeable increase to 81,151,885 in 2016 from 76,957,923 in 2015.
“Labour productivity rose from N471.94 in 2011 to N684.43 in 2016, this represents a 45.0% increase in labour productivity over the 6-year period and a decline of 4.7% between 2015 and 2016,” NBS stated in the report.
The fourth quarter of 2016, however, saw a rise in labour productivity, the highest levels since the first quarter of 2015.
The report indicate that output per hour rose to N783.51 in Q4, 2016 from N713.77 in Q3; N636.30 in Q2; N605.27 in Q1; and N706.95 in Q4, 2015. This indicates an increase of 9.8 percent on quarterly basis and 10.8 percent year on year.
The NBS report show estimated total number of hours worked increased by 0.48 percent between Q3 and Q4, 2016, and went up 1.9 percent between Q4, 2015 and Q4, 2016.
The NBS noted that while the overall level of productivity was high, several challenges impacted on output and labour, and indirectly on labour productivity, keeping it below optimal levels.
“Some of these issues faced during the quarter were issues that spilled over from Q1 through Q2 and Q3, 2016. Investment in the economy was still relatively low, though some government investments were recorded during the quarter, the volume of private investment and foreign direct investments was still considerably low compared to previous years,” the NBS stated.
“Power was relatively stable during the quarter, which partly accounted for the increase in Labour productivity but was still lower than the required levels.”
Nigeria’s economy, though stable in the past few years, started to experience a downward trajectory in the fourth quarter of 2014.
The economy, though showing signs of recovery, recorded its 4th consecutive quarter of negative growth, with the economy declining by 1.58 percent.
“The constraints on productivity of labour and other factor inputs continue to put a drag on overall economic growth and this was further exacerbated in the fourth quarter of 2016. A growing unemployment rate of 14.2% in the 4th quarter, up from 13.9% in the 3rd quarter, coupled existing infrastructural challenges, remain considerable threats to realising Nigeria’s full economic and productivity potentials,” the NBS stated.
Though there was a contraction in the economy in Q4 in real terms, accompanied by an increase in the unemployment rate, the growth in labour productivity implies a gradual increase in labour efficiency employed in the economy, the third consecutive quarterly rise, the statistics office reported.
The nature of productivity in the fourth quarter also gives an idea of the main drivers of the growth in labour productivity.
“The Agriculture sector, for instance, recorded a 3.39 percent growth, the highest among any major economic activity, with the parts of the fourth quarter being the harvest season in the Nigerian agricultural calendar, this may well have added to the growth in labour productivity in Q4, 2016,” the NBS further explained.
“Other major activities that contributed to productivity during the quarter are Transportation and the Creative Sectors of the economy, though both activities relatively low weights compared to other activities like Agriculture, their strong growth during the quarter and the high number of labour they engage would have contributed to the labour productivity during the quarter.”
Onyinye Nwachukwu, Abuja
