The Labour Productivity Report for Q3 2016 from the NBS has an hourly figure of N714, which represents an increase of 12.2% q/q and a decline of 7.1% y/y. The report measures the relationship between nominal GDP and the total hours worked in the period. The increase q/q is the result of output rising by 13.1% and hours worked by just 0.8%. Nigeria is, of course, mired in recession (on a y/y basis) and there is an unscientific argument that people may work harder and produce more when unemployment is rising.
In setting the background, the bureau’s commentary notes the positive factor of stable power output in the period, balanced by weak investment relative to earlier periods.
It also observes that agriculture has become one of the faster growing segments of the economy, and floats the argument that the harvesting season in the quarter could well have contributed to the boost in labour productivity.
We do not think that international comparisons are worthwhile because of the many operating challenges for businesses. The power supply was stable but the same cannot be said of access to fuel and fx.
This is very much vanilla analysis of productivity. It measures only one input and makes no distinction between sectors of the economy. Indeed, we have to allow for some flexibility in the calculation of hours worked in the informal sector.
Sources: National Bureau of Statistics (NBS); FBNQuest Research
The ultimate goal on the horizon is a measure of multi-factor productivity to include capital and labour inputs. The NBS should be commended for moving in that direction.