Wednesday, September 14, 2016 10.19am/ FBNQuest Research
We draw today upon a fairly new data series from the NBS on labour productivity. It begins in Q1 2015 and measures the relationship between nominal GDP and the total hours worked in the period.
Our chart shows productivity peaking in the period under review in Q3 2015, declining for two quarters and then recovering by 5.3% q/q in Q2 2016. The improvement was the consequence of nominal GDP rising by 5.7% over the quarter and hours worked by just 0.3%. (The labour force expanded by 1.8% over the period and the unemployment rate from 12.1% to 13.3%.)
We are not submitting the findings to international comparison because of the distorting impact of well-documented constraints. We have in mind shortages of power, fx and fuel.
Because these have become regular constraints, a person is likely to remain “working” in Nigeria and the employer to continue paying his/her salary. In other jurisdictions and under similar constraints, we suspect that the position would generally be axed.
The NBS commentary notes an improvement in the power supply towards the end of Q2 2016.
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 “wiggle room” in the calculation of hours worked in the informal sector.
The ultimate goal on the horizon is a measure of multi-factor productivity to include capital and labour inputs. That said, the NBS should be applauded for making the first steps in that direction.