Cautions high unemployment rate may thwart growth
James Emejo in Abuja
Reflecting the economic downturn, labour productivity in the country declined to N706.95 per hour/annum in the fourth quarter of last year from N768.42 in the previous quarter, the National Bureau of Statistics (NBS) stated on Thursday.
Labour productivity was recorded at N730.83 in Q2 and N669.57 in Q1 2015.
The index rose from about N471.94 in 2011 to N718.14 in 2015, representing a 52.5 percent increase in the five-year period and a 12.2 percent increase between 2014 and 2015, the statistical agency stated.
Labour productivity refers to the quantity of labour input required to produce a unit of output.
According to the labour productivity report for Q4 2015, which was posted on the NBS website, the decline in Q4, was attributed to several factors, including petrol shortages, low investment and government spending, and the decline in power generation during the quarter.
It said: “A combination of these factors contributed to the lower utilisation of available labour capacity recorded during the quarter. The number of working hours increased over the quarter by 15.9% and 6.6% increase in nominal GDP, compared to a 1.2% increase in working hours between Q2 and Q3 2015 and a similar increase in nominal GDP of 6.4% between Q2 and Q3 2015.
“While there was a quarterly decline in labour productivity year-on-year, there was a 12.3% increase which is the second highest year-on-year increase in labour productivity over the last five years.”
High labour productivity represents an important signal of the improvement in the real income or wages of labour and has implications for the conduct of both monetary and fiscal policies, NBS noted.
“It is recognised that labour productivity is not necessarily an indicator of the effort of each worker, but it still provides a useful measure of the rewards to labour as a factor in the production process.
“In many developing economies with large endowments of labour, measuring the productivity of labour is an important way to understand the dynamics occurring in the labour market, and useful in providing insights to policymakers regarding trends in unemployment, job creation and wages.
“Ultimately, these have implications for higher economic output and poverty reduction,” the NBS stated.
Nevertheless, it added that although economic growth has been high and stable in recent years, constraints on productivity of labour and other factor inputs continued to put a drag on overall economic growth in the country.
It warned that coupled with the high unemployment rate, the Nigerian economy was confronted with considerable threats to realising its full growth potential due to productivity challenges.
The agency further stressed that the report aimed to review recent trends in the labour force and labour productivity in the country, as well as compare with other emerging economies, with a view to highlighting possible areas of interest in the analysis of labour productivity in Nigeria.