DECLINING NATIONAL PRODUCTIVITY, PUBLIC HOLIDAYS AND THE CHANGE DEFICIT
Nigeria is technically in a recession. Gross Domestic product plunged from 6.3% growth in 2014 to 2.7% in 2015. Specifically it went from 2.84% in Q3 2015 to 2.11 in Q4 2015 and then dropped off the Clive to -0.36% in Q1 2016. So without waiting for the official Q2 2016 report which is not expected to do much better, we have had two consecutive quarters of GDP decline.
National productivity which rose between 2010 and 2014, began a decline in Q1 2015 and has maintained this course up to date. In the component of Labour productivity, Nigerians are known to be hardworking but productivity of its labour force is often questioned. The labour productivity in emerging Countries like Russia($24) Brazil ( $10.7) and turkey($28.9)is much higher than Nigeria's. In Q4 2015, Nigeria's labour productivity declined to $3.55 from $3.86 in Q3 2015 and the decline has continued since then approaching the 2011 level of $2.98 or less
The fall in GDP is blamed on the precipitate fall in the price of crude oil in the international market which started since June 2014 and has not recovered appreciably. Nigeria 's economy remains so vulnerable to the volatility of commodity prices in the global market. Efforts to diversify the economic have been moderately successful in terms of GDP contribution. As at Q1 this year, Agriculture contributed 19.17% to GDP, Trade 21.55%, oil 10.29%, Manufacturing 9.93%, Real Estate 6.46%, and construction 3.99%. Infact the non-oil sector contributed 89.71% of National GDP according to the National Bureau of Statistics. But the challenge is that the Oil that Contributes only 10. 29% of GDP is responsible for nearly 80% of our foreign exchange earnings, which is one reason the country has had acute shortage of foreign exchange in the last one year or so.
Other causes of the fall in GDP include Nigeria's loss of global competitiveness. In the 2015-2016 Global Competitiveness Index( GCI), released by the World Economic Forum ( WEF), Nigeria scored 3.46 over 7 to rank 124 out of 140 countries measured. On the Ease of doing business ranking, Nigeria in the 2016 report came last at 169 out of 169 countries assessed, scoring 44.69%. Little wonder foreign direct investment has literally dried up in the Country. The Adjustment policies previously adopted until a few weeks ago by the government to manage the decline in National income and Foreign exchange, seemed to have compounded the loss of competitiveness,constricting the economy and bringing Nigeria's trade balance to a deficit in Q1 2016, as total foreign trade declined by 22.6% over Quarter 4 2015 and by 38.0% over same quarter in 2015. It is also true that the worsening security situation especially in the Niger Delta region has been a significant contributor to Nigeria's current economic realities.
On the side of Labour productivity, several factors are blamed. And these include lack of quality educational institutions, poor training,lack of skills, unfavorable investment climate, power electric power availability,and high unemployment and underemployment. As at Q1 2016, total unemployment/ underemployment has reached 31.2% while Youth unemployment/ underemployment has worsened to 42.24 % causing increased poverty and increased social dislocation. The daily headlines of our newspapers paint the Picture of this social dislocation and disequilibrium .
But there are two extraneous factors which seem to be worsening both National Economic growth and National Productivity. The first is the penchant for Nigerian workers to go on strike, work to rule and all such activities that stop them from effectively utilizing man-hours for productive activities. As I write this, Pengassn and NUPENG are treating strikes that will not only keep them out of profitable production, but that will also make Nigerians waste man hours in petrol queues. The painful losses in the first five months of this year are too fresh for us to forget as most Nigerians spent useful time queuing and sleeping in fuel stations because of fuel scarcity. The other extraneous factor is Nigerian Governments love for public holidays. The State governments compete with The Federal governments in finding excuses to declare public holidays for every conceivable reason: to register to vote, to collect voters card, to vote, to go for rerun,to mourn the dead, to watch football, to celebrate victory etc. This is in addition to the religious holidays which are increasing by the day and other National holidays; Democracy day is different from Independence Day and June 12 is different from democracy day.
I was alarmed that Nigeria effectively lost last week on holidays. Several commentators have given figures of the loss in GDP in the one week we were on holidays. And my question is, do our political leaders understand how the GDP of a Country is calculated? Do they understand that business men who have borrowed money from the banks pay interest on the borrowed funds on public holidays, in addition to the two or three weekly work-free days( Saturday, Sunday and for some Friday also)? . I was hoping that under our circumstances, we should begin to consider returning Saturday or half of it as working day as it used to be when Nigeria was making economic progress. I was also hoping that under our change mantra, all such excesses as extending public holidays for what ever reasons would not happen. I actually was hoping that in this season of touted change, public holidays that fall at the weekend should be observed on such dates. The habit of moving the holidays to the next working day(s) ought to change. If the idea of public holiday is to give people time to celebrate, commemorate events or to rest, Weekends( Saturday & Sunday) in my view present the ideal days. But then that is only my view. Certainly some will disagree. But if we must improve our National productivity ,improve global competitiveness and minimize poverty and its Concomitant social disequilibrium, we must Keep more Nigerians, working all the time and doing more productive work.
National productivity which rose between 2010 and 2014, began a decline in Q1 2015 and has maintained this course up to date. In the component of Labour productivity, Nigerians are known to be hardworking but productivity of its labour force is often questioned. The labour productivity in emerging Countries like Russia($24) Brazil ( $10.7) and turkey($28.9)is much higher than Nigeria's. In Q4 2015, Nigeria's labour productivity declined to $3.55 from $3.86 in Q3 2015 and the decline has continued since then approaching the 2011 level of $2.98 or less
The fall in GDP is blamed on the precipitate fall in the price of crude oil in the international market which started since June 2014 and has not recovered appreciably. Nigeria 's economy remains so vulnerable to the volatility of commodity prices in the global market. Efforts to diversify the economic have been moderately successful in terms of GDP contribution. As at Q1 this year, Agriculture contributed 19.17% to GDP, Trade 21.55%, oil 10.29%, Manufacturing 9.93%, Real Estate 6.46%, and construction 3.99%. Infact the non-oil sector contributed 89.71% of National GDP according to the National Bureau of Statistics. But the challenge is that the Oil that Contributes only 10. 29% of GDP is responsible for nearly 80% of our foreign exchange earnings, which is one reason the country has had acute shortage of foreign exchange in the last one year or so.
Other causes of the fall in GDP include Nigeria's loss of global competitiveness. In the 2015-2016 Global Competitiveness Index( GCI), released by the World Economic Forum ( WEF), Nigeria scored 3.46 over 7 to rank 124 out of 140 countries measured. On the Ease of doing business ranking, Nigeria in the 2016 report came last at 169 out of 169 countries assessed, scoring 44.69%. Little wonder foreign direct investment has literally dried up in the Country. The Adjustment policies previously adopted until a few weeks ago by the government to manage the decline in National income and Foreign exchange, seemed to have compounded the loss of competitiveness,constricting the economy and bringing Nigeria's trade balance to a deficit in Q1 2016, as total foreign trade declined by 22.6% over Quarter 4 2015 and by 38.0% over same quarter in 2015. It is also true that the worsening security situation especially in the Niger Delta region has been a significant contributor to Nigeria's current economic realities.
On the side of Labour productivity, several factors are blamed. And these include lack of quality educational institutions, poor training,lack of skills, unfavorable investment climate, power electric power availability,and high unemployment and underemployment. As at Q1 2016, total unemployment/ underemployment has reached 31.2% while Youth unemployment/ underemployment has worsened to 42.24 % causing increased poverty and increased social dislocation. The daily headlines of our newspapers paint the Picture of this social dislocation and disequilibrium .
But there are two extraneous factors which seem to be worsening both National Economic growth and National Productivity. The first is the penchant for Nigerian workers to go on strike, work to rule and all such activities that stop them from effectively utilizing man-hours for productive activities. As I write this, Pengassn and NUPENG are treating strikes that will not only keep them out of profitable production, but that will also make Nigerians waste man hours in petrol queues. The painful losses in the first five months of this year are too fresh for us to forget as most Nigerians spent useful time queuing and sleeping in fuel stations because of fuel scarcity. The other extraneous factor is Nigerian Governments love for public holidays. The State governments compete with The Federal governments in finding excuses to declare public holidays for every conceivable reason: to register to vote, to collect voters card, to vote, to go for rerun,to mourn the dead, to watch football, to celebrate victory etc. This is in addition to the religious holidays which are increasing by the day and other National holidays; Democracy day is different from Independence Day and June 12 is different from democracy day.
I was alarmed that Nigeria effectively lost last week on holidays. Several commentators have given figures of the loss in GDP in the one week we were on holidays. And my question is, do our political leaders understand how the GDP of a Country is calculated? Do they understand that business men who have borrowed money from the banks pay interest on the borrowed funds on public holidays, in addition to the two or three weekly work-free days( Saturday, Sunday and for some Friday also)? . I was hoping that under our circumstances, we should begin to consider returning Saturday or half of it as working day as it used to be when Nigeria was making economic progress. I was also hoping that under our change mantra, all such excesses as extending public holidays for what ever reasons would not happen. I actually was hoping that in this season of touted change, public holidays that fall at the weekend should be observed on such dates. The habit of moving the holidays to the next working day(s) ought to change. If the idea of public holiday is to give people time to celebrate, commemorate events or to rest, Weekends( Saturday & Sunday) in my view present the ideal days. But then that is only my view. Certainly some will disagree. But if we must improve our National productivity ,improve global competitiveness and minimize poverty and its Concomitant social disequilibrium, we must Keep more Nigerians, working all the time and doing more productive work.
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