NBS: Labour Productivity Jumps 45% in 6 Years


Kunle Aderinokun

Labour productivity increased by 45 per cent over a six-year period to N684.43 in 2016 from N471.94 in 2011, but declined by 4.7 per cent between 2015 and 2016, the National Bureau of Statistics has said. Labour productivity is derived as the ratio of total output (annual GDP, current prices) to labour input (total hours worked per year).

NBS, which disclosed this in its Q4 2016 Labour Productivity Report, noted that labour productivity increased 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.

Specifically, it pointed out that, for the period under review, labour productivity increased by 9.8per cent on quarterly basis and 10.8per cent year on year, noting that the estimated total number of hours worked increased by 0.48per cent between Q3 and Q4, 2016, and increased 1.9per cent between Q4, 2015 and Q4, 2016.

The statistical agency explained that, Q4 2016 saw a rise in labour productivity, the highest levels since Q1, 2015. “While the overall level of productivity was high, there were several challenges that generally impacted on output and labour, and indirectly on labour productivity, keeping it below optimal levels.

According to the report, “some of these issues faced during the quarter were issues that spilled over from Q1 through Q2 andQ3, 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.

“Power was relatively stable during the quarter, which partly accounted for the increase in Labour productivity but was still lower than the required levels. Though there was a contraction in the economy in Q4 in real terms, which was 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 nature of productivity in the fourth quarter, NBS states, also gives an idea of the main drivers of the growth in labour productivity.

Analysis showed that, the agriculture sector recorded a growth of 3.39per cent, 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.

Besides, other major activities that contributed to productivity during the quarter were 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.”

In its introductory notes, NBS explained that, “Economic growth in Nigeria, though stable in the past few years, started to experience a downward trajectory in the fourth quarter of 2014.”

According to the agency, “In the fourth quarter of 2016, Nigeria economy, though showing signs of recovery, recorded its 4th consecutive quarter of negative growth, with the economy declining by 1.58per cent. 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 14.2per cent in the 4th quarter, up from 13.9per cent in the 3rd quarter, coupled with existing infrastructural challenges, remain considerable threats to realising Nigeria’s full economic and productivity potentials,” it added.