To lift 133 million people out of poverty, Nigeria must increase productivity, according to a recent analysis by Stears Business.
Recently, the Nigerian Government launched a new tool for measuring poverty in Nigeria, which found that 63 percent of people—133 million Nigerians out of an estimated population of 211 million—are multidimensionally poor.
According to almost all economic indices, the Nigerian economy has become increasingly incapable of providing for its population, according to the paper titled “How to Address Nigeria’s Growth Problem.”
According to the recently released National Multidimensional Poverty Index (MPI), two out of every three Nigerians are lacking in more than one basic necessity. That represents 133 million Nigerians or 60% of the total population, it proclaimed.
According to the research, the nation’s low productivity was to blame for impeding economic development.
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 matters for raising living standards, making it a far better strategy than just
focusing on GDP growth.”
It added that, given 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 labor, wages remain low. A survey of smallholder farmers by the CGAP (Consultative Group to Assist the Poor) showed that only 27 percent of the farmers surveyed live above the poverty line ($2.50 a day).”
According to the report, more than 50 percent lived on about $1.25 to $2.50 a day, while the remaining 27 percent, 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 in countries 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 the country’s growth problem needs policies poised to propel 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 minimize disruption to business activity is one quick win here.
There should be a focus on helping small-scale farmers become large-scale producers who export and tap into richer and larger markets.”