O.O. Okereke, Ph.D.
Department of Government/Public Administration
Abia State University, Uturu.
The level of productivity of any economy determines the level of growth and socio-economic development. In Nigeria productivity level is low and this manifests in unemployment, poverty, and low level of development. It is contended in this paper that in order for Nigeria to achieve increased productivity, growth and socio-economic development, the agricultural sector must be fully exploited, savings encouraged, and employment generation programmes emphasized. This way, poverty would have been also realistically eradicated.
The problem of under development has persisted in many Third World countries and seems to defy an immediate solution. Consequently, the social and economic conditions of the people of this region suffer tremendously. An example is the deterioration in the living condition of the people in relation to their welfare and well-being. The general features or characteristics of many Third World societies are poverty, malnutrition, ruralness, squalor and virtual absence of social and economic infrastructure.
In Nigeria, the situation is even more pathetic. Poverty rate is high in spite of her resource endowments. For instance, Yaqub (2003:42), points out that Nigeria’s poverty level has risen to between 66 and 70 percent, with all the different dimensions of poverty deprivations having become severely aggravated”.
Unemployment rate in Nigeria is high. In fact, AlhajiAdamuMaina Waziri, the former National Coordinator of National Poverty Eradication Programme (NAPEP) has pointed out that there are an estimated four million people that are unemployed in Nigeria (Okereke, 2003:03).
One fundamental problem facing Nigeria is the fact that the economy is largely unproductive. Consequently, there is low growth rate and low level of socio-economic development.
It is argued in this paper that productivity is the key to the achievement of social and economic progress and/or development in Nigeria. To further this argument effectively, the paper is divided into sections. The first sections, deals with the conceptual analysis, while the second, examines the performance of the Nigeria economy. The third section suggests the possible strategies to adopt in order to increase the productivity of the economy and thus achieve the objective of social and economic development. Section four deals with the concluding remarks,
The Conceptual Analysis
University, according to the late Pius Okigbo (1993:93) in his Essays in the Public Philosophy of Development, relates to the gross domestic product per unit of factor, i.e., capital, labour, etc. employed in production”. He admits, however, that this is extremely too difficult to measure since the entire gross product cannot easily be attributed to “either labour or capital or entrepreneurship or even all of them independently of the effect of technological advancement”.
T. M. Yesufu (2000:263), in his, The Human Factor in National Development, posits that “productivity is the measurement of the ratio of the output to the amount or quantity of the resources input which is utilized in the relevant production process”. Simply put, productivity, is the quantum of output in relation to the value of resources invested in the production of such an output
Certainly, “a given quantity of resources input would result in some level of output. (Ibid). And as the level of output a ‘productivity increases, so will “the average level of income and the consequent consumption and welfare index of the citizen”. That is i [professor Yesufu persuasively argues that “since the degree f welfare normally depends on the level of income, rising per capital income is
Essential for achieving improved consumer welfare and/or reducing the prevailing levels of poverty. Herein lies the fundamental importance of the concept of productivity for economic planning and social welfare”. Thus, productivity is a fundamental measure of the efficiency of an economy. As the productivity level rises progressively in an economy, the basis for launching society on the path to sustainable growth and development would have been established. Indeed, productivity is the creation of wealth and hence, growth and social-economic development,
Economic growth is used here ‘to refer to increases over time in a country’s real output of goods and services”. (Zuvekas, 1979:8) a^ measured by gross national product (GNP) or gross domestic product (GDP) or per capita income,
A number of liberal scholars have tended to equate growth with development. Development from the liberal perspective, is often conceived as “the capacity of a national economy, whose initial economic condition has been more or less static, to generate and sustain an annual increase in its Gross National Product (GNP) at rates of perhaps 5 to 7 percent or more” (Todaro, 1979:95, in Okereke and Ekpe, 2002:2). But growth does not necessarily mean development. That is why we sometimes talk of growth without development. Growth without development, refers to a situation where “a country produces more of the same types of goods and services, to keep up with a growing population or send to overseas markets while the benefits of this growth continue to go almost exclusively to a privileged elite and a small middle class; the vast majority of the country’s people are completely unaffected”. (Zuvekas, 1979:9). Development, rather than focus on abstract and restrictive macro economic variables, as GNP or GDP, or per capita income, focuses on man and his well being. It is about “reducing the incidences of poverty, unemployment, and income inequalities” (Todaro 1979:87 in Okereke and Ekpe, 2003:3), among others. Therefore, a rising level of productivity will lead to growth and growth, by which we mean increase in the national wealth when properly utilized, will lead to sustainable socio-economic development.
Performance of the Economy
The Nigeria economy has not been recording any appreciable or significant growth. If any, such growth rate has been marginal and weak. For instance, the computation from the Central Bank Statistical Bulletin of 2000, shows that at 1984 constant factor cost, Nigeria’s gross domestic product recorded a growth rate of 3.06 per cent in 1997. In 1998 and 1999, this dropped to 2.30 and 2.92, respectively. For the years, 2000 and 2001, the Annual Report of the central bank of 2001 shows that the growth rate marginally increased to 3.8 and 3.9, respectively (p. 23), but lower than the 5 per cent target for 2001. It is unfortunate that a country that is so blessed with abundant resources “has remained one of the poorest economies in the world with a per capita income of about N30.000.00 (US$330) in 1999″ (Fakiyesi; 2001:68).
The low rate of growth and development in the Nigerian economy is largely due to low productivity. The Nigerian economy is not sufficiently productive. The low or marginal growth rate indeed is suggestive of an economy and people that are largely unproductive. No wonder the low level of development.
The Nigerian economy is a consumerist economy. An economy where few people engage in productive activities while majority are mere consumers waiting to use goods mostly produced outside Nigeria. This is due to the preference for foreign goods by Nigerians. Finance capital that would have been invested locally to help boost productivity level is rather used to import manufactured goods, thereby helping such foreign economies to prosper.
In 2002 fiscal year, Nigeria spent $9.5 billion (N963 billion) on goods importation. Disclosing this recently in Abuja at a workshop on “Fostering Public-private Partnership for Export Financing”, the then Minster of State for Finance, Senator Martins Kuye, lamented that the nation was wasting foreign exchange on consumables, which could be produced locally due to our penchant for foreign goods (Vanguard 2002:11). According to the Minister, these imports, are made up of 40 per cent of consumables of which 60Per cent were on fruit juice, vegetable oil, rice and sugar.
One of the thriving sectors of the Nigerian economy is distributive trade (wholesale and retail) or simply buying and selling. Rather than producing or manufacturing and selling. Nigerians prefer to import and sell. While the manufacturing sector contributed N7.33 billion to the GDP in 1999. Wholesale and retail contributed as much as about N14 billion for the period (CBN Statistical Bulletin 2000:113). By importing to sale, rather than producing to sale, we have turned the economy to a market for goods produced elsewhere, making Nigeria a dumping ground for such goods. This practice contributes little to the growth of the local economy while enhancing the growth of the particular foreign economy. Consequently, the Nigerian people and economy suffer from lack of social and economic infrastructure necessary to raise the living conditions of the people.
The below capacity production level of industry and manufacturing sector is partly responsible for the low rate of growth and development. Surprisingly, some of the industries and manufacturing companies that exist have reduced themselves to outlets for distributing foreign manufactures. They import and distribute as agents of foreign companies rather than engage in local manufacturing of those goods. For example, many of the cement companies in Nigeria, rather than produce cement locally, import the dust and bag them in their brand names and distribute to buyers. We are not sure that is how to make the economy productive in order to achieve social and economic progress.
The high rate of unemployment in the country accounts also for: the low level of productivity, growth and socio-economic development. In Nigeria today, there is wide spread poverty, unemployment and income inequality, hence low level of development.
It is embarrassing to note that about twenty-three years ago only “28.1 per cent of Nigerians lived below the poverty line”. But “in 1996, the figure of the poor had jumped to 65.6 per cent. Today, Nigeria, an oil producer and exporter is classified among the world poorest nations… and with its army of the poor, now about 85 per cent of the population” (Newswatch, 2003:20).
Similarly, the unemployment rate sends shivers down the spines of those who care. A look at the figures illustrates this better. For example, registered unemployed/employed lower grade workers from 1990 to 2000, a period often years, shows a very dismal picture of the Nigerian economy. In 1990, for instance, a total of 89,752 of this class of workers registered with the federal ministry of Employment, labour and productivity, but only 1917, representing just about 2.13 per cent, were placed on jobs. In 1995, out of 81,730 registered only 1.37 per cent were employed. This picture was not different in the year 2000, where out of 368 applicants only 1.08 per cent of these numbers were employed (see table 1 below.)
TABLE1: REGISTERED UNEMPLOYED/EMPLOYED (LOWER GRADE WORKERS)
|Year||Old Registrations||Fresh Registration||Re- Registration||Total||Placement||percentage|
Source: CBN Statistical Bulletin Vol. 11, No. 2. Dec., 2000,p 165.
The records for professionals and executives are equally grim. For the period of 1990, 1995, and 2000, out of registered unemployed of 10,182, 32,942, and 104,960, only 9.68, 0.15, and 0.10 per cent, respectively, got placements (see table below).
TABLE II: REGISTERED UNEMPLOYED/EMPLOYED (PROFESSIONALS AND EXECUTIVES)
|Year||Old Registrations||Fresh Registration||Re-Registration||Total||Placemen t||Percentage|
Source: CBN Statistical Bulletin Vol. 11, No. 2. Dec., 2000,p 166.
Income inequalities still remain the reality of Nigerian life despite efforts by the Obasanjo democratic regime to re-create the middle-class that was almost totally annihilated by the-military. The poor seem to be getting poorer just as the rich are getting richer.
Strategies for Increased Productivity:
Growth and development are dependent variables while productivity is an independent variable. In other words, growth and development can only come about under conditions of increased productivity. It is our believe, that the following strategies when properly implemented will put the economy on the trajectory of growth and sustainable socio-economic development.
Focus on Agriculture:
The agricultural sector has not been receiving the desired attention under the present democratic dispensation. There has not been any clearly articulated blue print or programme of action for increased agricultural production. Ironically the Federal Government was headed by the same man who introduced the Operation Feed the Nation (OFN). This is in spite of the fact that agriculture has in the past, been the mainstay of the Nigeria economy. With adequate attention and clearly articulated policy framework, private investors could and should be encouraged to invest in agriculture to complement the efforts of rural farmers.
But in spite of this apparent lack of attention agricultural output, comprising crops, livestock, forestry and fishing, contributed about 41.1 per cent of the total GDP in 2001, which was about the same level in 2000 (CBN Annual report, 2001:45). In comparison, the industrial sector, comprising of mining, quarrying, manufacturing and the almighty crude petroleum contributed just 17.0 per cent in 2001 and 16.7 per cent in 2000 (Ibid). If agriculture were given half the focus of attention given the petroleum sector the face of Nigeria would have changed. Agriculture has the capacity to mop up the surplus labor in the economy. There would have been no better way of eradicating poverty and enhancing economic growth and development than that. The agricultural sector is a gold mine yet to be fully explored and exploited.
We must not fail to observe that a quiet agricultural revolution seem to be going on in Abia State with the distribution of palm seedlings to schools, students, Civil servants and communities. If this example is emulated by the federal government and other states in the federation, Nigeria might soon become a net exporter of palm oil and kernel.
However, rather than exporting palm oil and kernel, the better thing to do would be to establish relevant industries to process the primary goods. Thus thinking agriculture will lead to thinking industry. That is why Baldwin (in Okereke & Ekpe 2002:41), contends that agriculture and industry are partners in the development process. They “must expand side by side if growth is to be more than the establishment of a few flashy industries…”
Increase in Savings and Investment:
The Nigerian economy must encourage savings and investment in order to increase productivity and achieve growth and socio-economic development. There is need to stimulate savings “to enhance availability of liquidity, which would translate to higherLevels of investment” (Fakiyesi, 2001:68). Total savings as a ratio of GDP at current market prices between 1998 and 2000 average 0.3 percent (CBN Statistical Bulletin 2000:62), the lowest for many years.
In the same way, investments are shown to have “declined substantially in Nigeria over the years and were below savings with large gaps” (Fakiyesi, 2001:68). The observed low savings and investment ratio “is indicative of the shallowness of the financial market and overall decline in economic activity” (Ibid). The problem of low investments explains the low growth rate of the economy.
There is therefore, need for investment in the economy. The financial sector, must” effectively and efficiently mobilize resources as well as create credit that encourages savings” and investments (Ibid).
Many Nigerians like hording liquid cash outside the banking system. Rather than invest in productive ventures, Nigerians feel a sense of satisfaction and achievement by merely beholding the accumulated cash. For example one of the Army Generals under the Abacha regime was reported to have converted one of his wardrobes into a safe containing large quantities of, or sacks of solid cash in different currencies. This type of practice denies the economy of investible capital. It is investment in an economy that increases productivity, which in turn leads to growth and socio-economic development.
Privatization is one way of increasing not only productivity but investment, when properly implemented. Privatization is part of the process of deregulation. Deregulation means opening up the economy to encourage competitive economic engagements.
However, selling the entire common heritage of the people is not in our view the best approach to solving the problem. We should keep what we have and admit other interested parties in order to engender competition, increase productivity, achieve growth and social-economic development. The desire to survive in the competition would lead to the strengthening of public institutions and agencies to enable them cope with the new challenges of competition.The result would be an active and vibrant economy.
Employment Generation Strategy
There are many unemployed school leavers roaming the streets without jobs. As already mentioned earlier, out of the total number of registered unemployed persons in 1990, 1995, and 2000. only 2.13,1.37, and 1.08, per cent, respectively, received placements.
Nigeria needs to fashion out a proper and credible employment generation programme, to soak this unemployed army. The energies of the mass of the unemployed people, when properly channeled ordirected towards productive activities, could be one of the tonics the economy needs to overcome low productivity, low growth and development.
The National Poverty Eradication Programme (NAPEP), now encapsulated in the National Economic Empowerment and Development Strategy (NEEDS), should therefore, be re-designated Employment Generation Programme (EGP) or strategy. Poverty isbetter eradicated or reduced when people are meaningfully employed. The employment and wealth generation sector of NAPEP and/or NEEDS should therefore be expanded and made a separate and major policy strategy of employment generation. The current practice where unemployed youths are registered and paid stipends infrequently has not and cannot solve the problem of unemployment nor will it make any meaningful contribution to the economy.
The unemployed school leaver must be given skills and trade to be self-employed. He or she must be given loan or credit facilities to start the trade learnt. This way, unemployment will no longer be a major problem and poverty will realistically be eradicated.
Rising productivity is the key to socio-economic development. The Nigerian economy is today characterized by low productivity, low growth and development. These are manifested in low economic activities, unemployment, poverty, low capacity utilization, to mention just some of them. If the economy must be put back on the path of recovery, we must consider seriously:
- The need to re-focus policy and strategy towards the Agricultural sector. This sector has the potentials of increasing output, employing the unemployed, all of which will contribute towards national development.
- The volume of investment must increase. Nigerians must save and invest their money in productive ventures rather than the practice of keeping liquid cash idly in their houses, or preferring to deposit them in foreign banks. By doing this we help foreign economies to grow while ours stagnate.
- Privatization should not be conceived as selling off our collective heritage, but an opportunity to energize the economy by making it more competitive. Private entrepreneurs should compete with government in the provision of goods and services. These way public institutions will be strengthened towards offering improved services to the social and economic advantage of the people,
- Employment generation strategy is what is needed rather than poverty eradication. Poverty will be eradicated when people are gainfully employed.
These strategies, and more, are some of the policy measures necessary to stimulate the Nigerian economy towards higher productivity, and in turn engender growth and socio-economic development.
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