Nigeria, with its hardworking and ambitious populace, might appear to be a prosperous nation at first glance. However, the reality, as revealed by the Global Competitiveness Index 4.0 2019 Rankings, tells a different story. Nigeria currently stands at 116th in the world out of 140 countries and 15th among African nations, highlighting the pressing need to address the country’s productivity levels.
Looking ahead, the Nigeria Competitiveness Index is projected to trend around 48.00 points in 2021 and 50.00 points in 2022, according to our econometric models. This underscores the urgency for a strategic focus on enhancing productivity.
Productivity, essentially measuring the efficiency with which a country combines capital and labor to produce more with the same level of inputs, is a critical factor in determining living standards. While labor productivity is commonly assessed in terms of output per person employed or output per person hour, a more comprehensive measure involves total factor productivity, considering changes in both capital and labor.
As the saying goes, productivity isn’t everything, but in the long run, it’s almost everything. A lack of productivity growth can impede economic progress, presenting a significant challenge for Nigeria’s development.
Higher productivity has a ripple effect on various facets of the economy. It can lead to lower unit costs, enabling cost savings that may be passed on to consumers, thereby encouraging higher demand, increased output, and a surge in employment. Moreover, heightened productivity contributes to improved competitiveness and enhanced trade performance, crucial elements for global market success.
The advantages extend to higher profits for businesses, which can be reinvested to support long-term growth. Additionally, businesses with efficient workers can afford to offer higher wages, contributing to overall economic well-being. A noteworthy outcome of increased productivity is the release of labor from one industry to another, fostering economic diversification and growth.
Government plays a pivotal role in driving national productivity growth. However, the effectiveness of government efforts depends on the collaboration and integration of various social forces, including government institutions, employers, workers, and non-governmental organizations. Direct intervention and participation in economic processes, coordination of major social groups, promotion of productivity-oriented education and training, and raising public awareness are essential components of a successful national productivity strategy.
In the Nigerian context, the government’s role in providing necessary infrastructure, including education, health, housing, power, water, transport, communications, and technology, is paramount. Infrastructure development is integral to creating an environment conducive to growth. For instance, significant government investment in research and development has historically been crucial for the growth of sectors such as agriculture, transportation, and technology.
Nigeria’s path to economic prosperity lies in a concerted effort to boost productivity. By implementing strategic policies, fostering collaboration among key stakeholders, and investing in critical infrastructure, Nigeria can unlock its full potential and position itself as a competitive player on the global stage.
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