Research Analyst at Alpha 10 Fund Management Limited, Osamagbe Enofe, says Nigeria must prioritise productivity to achieve sustainable economic growth and significantly improve the living standards of its citizens.
Speaking during an interview with ARISE NEWS on Thursday, Enofe said Nigeria must prioritise productivity by focusing on the value generated from economic growth to achieve sustainable development.
“Economic growth is about the economy becoming bigger, but the productivity question is what value we have derived from that growth.”
Enofe said Nigeria’s economy had largely relied on factor accumulation, where more workers, land and capital are added without significant improvements in efficiency.
“We keep pumping money into the same system, we keep acquiring more lands, we keep doing a whole lot of things like employing more workers. But the productivity level that’s generated from this activity is still low.”
He said simply increasing the amount of resources deployed into the economy would not necessarily result in higher productivity, stressing the importance of improving how efficiently those resources are utilised.
“It doesn’t necessarily equate increasing productivity levels. So, that’s what Nigeria, the Nigerian economy has seemingly been practicing for a very long time.”
Enofe said measuring productivity should involve examining whether additional workers and investments are generating more value and improving economic output.
“The GDP per capita for every worker in that particular sector, what is it? Has it improved? How are we better off than before they were only employed?”
He identified reliable electricity supply as one of the major requirements for improving productivity across sectors, particularly technology and manufacturing.
“For any economy to travel, any industry at all, any sector to travel, we need adequate power supply, adequate supply of electricity.”
Enofe said unreliable electricity increases the time required to complete productive activities, thereby reducing efficiency and limiting the amount of output businesses can generate.
“Because of the fact that there’s no power supply, I would take longer. I would take maybe a year to finish that.”
He added that high energy costs also reduce productivity by diverting funds that could otherwise be invested in machinery, equipment and technology.
“If they’re able to redirect those funds into the machineries and equipment, we discover that the sector becomes more productive.”
Enofe said education and skills development were equally important to improving productivity, as a more skilled workforce would be better positioned to generate greater value from economic activity.
“Education plays a very big part in scaling workers.”
He urged the government to increase investment in education while expanding access to digital learning and skills development in areas such as artificial intelligence and technology.
“Nigeria needs to also look at that and do that public education also.”
Enofe also stressed the importance of policy consistency, saying productivity-enhancing reforms would require sufficient time to produce sustainable results.
“We need consistent policies for at least a decade. Let us operate those policies and operate them for like a decade and watch out how things turn around.”
Enofe said Nigeria must move beyond expanding the size of its economy, stressing that greater efficiency, skills, infrastructure and value creation are essential to achieving sustainable economic growth.
“Nigeria must focus on productivity by improving efficiency, developing skills, investing in infrastructure and creating greater value from the resources available.”
Goodness Anunobi
Follow us on:
