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Nigeria needs to ramp up productivity to take 133 million out of poverty, a new report from Stears Business has stated.
The report titled “How to fix Nigeria’s growth problem” said by nearly all economic indicators, the Nigerian economy has become increasingly incapable of taking care of its citizens.
“According to the recently published National Multidimensional Poverty Index (MPI), two out of three Nigerians are deprived of more than one essential need. That’s 133 million Nigerians- 60 per cent of the population,” it declared.
The report indicated that the country’s lack of productivity was responsible for its stifling economic progress.
The report read in part, “When we focus on productivity, we accept that we want to improve our ability to produce more with less. That is all that really matters for raising living standards, making it a far better strategy than just focusing on GDP growth.”
It added that in view of standard economic theory, productivity determines wages. “That is because wage rates are not based on the number of hours you work but on the output you produce within a given time. The value you produce and not just the time you spend determines how much you would be paid.
“While the agriculture sector is Nigeria’s largest employer of labour, wages remain low. A survey of smallholder farmers by the CGAP (Consultative Group to Assist the Poor) showed that only 27 per cent of the farmers surveyed live above the poverty line ($2.50 a day).”
According to the report, more than 50 per cent lived on about $1.25 to $2.50 a day, while the remaining 27 per cent, who were extremely poor, lived on less than $1.25.
“All of this indicates the agriculture sector’s low productivity levels. Essentially, we do not do a good job of turning our inputs into output. That is why our peers like Kenya (who do not have as many land resources as we do) can still produce more products than we can. What is even direr is that our increasing population rate only means more workers (farmers) will keep trooping into the agriculture sector, which will only continue to depress wages and output over time.”
The report added that country’s growth problem needs policies poised at propelling long-run productivity.
“This will require deep reform. Governments should create an enabling environment for businesses so that the real economy can thrive. Making tax collection more efficient and honest to minimise disruption to business activity is one quick win here. There should be a focus on helping small-scale farmers to become large-scale producers who export and tap into richer and larger markets.”
In an exclusive interview with The PUNCH earlier in September, the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Olusola Obadimu, also stressed on the need for the government to charge up the agricultural sector to boost economic growth and eradicate poverty.
“We are underperforming because we have not realised the kind of potential that lies in agriculture. The primary industries are agriculturally managed and it is from there that everything else grows. In terms of all the processing we do, it is either you start from a mineral product or an agricultural product, which is why we call them primary industries. So, it is an area that has a huge potential to employ so many people because of the value-adding processes that we are not taking advantage of,” he stated.
According to Obadimu, the country has been focusing mainly on consumption, eroding the potential for exportation and large-scale productivity.
“We just produce to eat and we are not producing enough. The impact of insecurity has lowered the capacity of what we used to produce. We produce less now and getting the product into the market or other areas to sell has a higher cost-effective than the actual cost of producing the primary products themselves.”
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