Friday, 8th December 2023

Nigeria at a crossroads: A productivity revolution imperative

By Tunji Olaopa
05 March 2020   |   3:22 am
No one needs to be told that Nigeria is not working. The agonies of underdevelopment are so stark and cruel that it shows on the faces and the actions of those who bear the brunt most directly—the Nigerian masses.

No one needs to be told that Nigeria is not working. The agonies of underdevelopment are so stark and cruel that it shows on the faces and the actions of those who bear the brunt most directly—the Nigerian masses. And all the relevant global and regional indices of development and economic performances demonstrate the suffering of Nigerians.

For instance, in the 2018 Misery Index, Nigeria, Egypt, and South Africa came in as the most miserable countries in the world. Nigeria came in at the sixth position, while South Africa was seventh and Egypt ninth. The Misery Index is calibrated around indicators such as unemployment, inflation rate and the ease of doing business. 23% of Nigeria’s population is unemployed. This translates into 18 million of the total labor force.

In Nigeria, the informal sector represents 65% of the Nigerian Gross Domestic Product (GDP). In 2015, very harsh policies on foreign exchange led over 200 major businesses to fold up and leading to the further bloating of the unemployment market. In 2016, unfavorable importation policies led to many large shipping companies to leave Nigeria.

The consequences of underdevelopment are also pushing the circumference of security in ways that challenge the very existence of the Nigerian state. Nonstate actors, most notably the Boko Haram insurgents, the armed Fulani herders, Niger Delta militants, and individual criminals are daily marauding and impinging on the sovereign capacity of the state to determine its borders and the well-being of its citizens. It takes little reflection to see how Nigeria’s productivity profile cannot in any way be order than it is, at a very low ebb. In the Global Competitiveness Report, productivity is measured around significant indicators like institution, market size, infrastructure, the financial system, macroeconomic stability, business dynamics and dynamism, ICT, health, competences and skills, the labor market, etc. and out of 141 countries, Nigeria came in at 116th—just twenty-five spots from the last country, Chad.

Thus, we can say, with utmost precision and tragic certainty that Nigeria is at a national crossroads. It is even more depressing that over fifty years of development planning has not substantially transformed the institutional basis of governance in Nigeria. Of course, one must necessarily concede that Nigeria has come a long way in terms of governance from 1960 to date. Indeed, the transition to democratic governance in 1999 was a significant leap forward after many years of military interventions that undermined the structural and institutional basis of the Nigerian economy and politics. However, democratic governance has not yet been translated into infrastructural dynamics that become democratic dividends that impact the well-being of Nigerians.

For instance, $3trillion is required in the next thirty years to offset the infrastructural deficit, far more than the entire government’s real revenue. This is quite depressing because it seems like the future of unborn generations of Nigerians is already mortgaged in poverty. No wonder it has been reported that Nigeria is one of the worst places on earth to be born.

Through all the scientific analyses of the Nigerian predicament, it is very clear that what is needed is a whole range of governance and institutional reform that will ground good governance on a conscious politics that is deployed to improving the quality of life of the citizens. At the center of such a fundamental reform agenda is the public service that represents the institutional form of state governance anywhere. This is even more so in Nigeria where the public service is embroiled in the post-independence governance and politics that have gone wrong. Yet, there is no reform that is ever an end in itself. It is always directed at institutional renewal and rehabilitation. In the case of Nigeria, the end is the achievement of a paradigm shift in the productivity profile of the Nigerian state.

The objective of national productivity derives from the need to achieve a high volume of qualitative output with the least expenditure of resources. In Nigeria, there is a critical challenge of harnessing resource efficiency in ways that accelerate economic growth. The crisis also manifests in terms of balancing the rate of investment with the return on that investment. There are three significant indicators of Nigeria’s productivity crisis that immediately speaks to what we ought to do to arrive at a solution. First, Nigeria is a resource-dependent country that operates essentially a mono-cultural economy relying solely on crude oil. Second, there is a patent low marginal productivity of labor arising from the average output of the workforce in Nigeria. This is in spite of the fact that labour productivity does not sum up into national productivity. And lastly, the productivity of the public service in Nigeria is vastly undermined by the fact that the Nigerian government is the single largest employer of labour and provider of services in the economy which consumes a considerable amount of tax resources in the process. And yet, there is no productive relationship between productivity, performance and service delivery.

There are two critical dimensions to the institutional dysfunction that undermine the possibility of a paradigm shift in national productivity. The first has to do with the dynamics that produce the human capital required to facilitate productivity in the first place. Nigeria is faced with both human capital development and human capital capacity utilization problems.

On the one hand, Nigeria lacks the requisite educational framework and processes that could serve as the basis for generating the critical mass of human capital that would instigate the national productivity revolution. Nigeria’s higher and tertiary education faces a serious dysfunction in terms of its curriculum and syllabus that relate to the contemporary requirement of a developing state like Nigeria. For instance, the Nigerian National Policy on Education is founded on a veritable philosophy of education that sees the relationship between education and development and the well-being of Nigerians. But this has not translated into serious programmatic curriculum development that instigates human capital development. Thus, millions of graduates are offloaded into the Nigerian markets yearly without any hope of gainful employment. Many are also unemployable. The human capital capacity utilization challenge simply speaks to the reason why Nigeria is not able to convert her youth bulge into an energetic labor resource that transforms its productivity profile.

The second leg of the productivity challenge is the urgent need for a comprehensive and service-wide institutional rehabilitation that targets the ministries, departments, and agencies (MDAs) in terms of their capacity readiness to transform the face of governance in Nigeria. The MDAs are the powerhouse for the execution of the plans and policies of the government. However, their dysfunctionality has been a consistent hindrance to progress in the productivity trajectory of the Nigerian state. Institutional reform in this sense will require not only a comprehensive administrative reform of the rules, regulations, and standards of operations, it will also require a deep-seated cultural and attitudinal change that affects the mental, spiritual and professional dispositions of the public servant as an agent of productivity transformation.

Shifting the paradigm of productivity in Nigeria means transforming the way we think and rethink a lot of administrative phenomena that go into the making of the public service. The MDAs constitute the engine room within which productivity is cooked. However, the MDAs’ present bureaucratic structure ensures that a huge proportion of the MDAs brain power is not used as there is really no quality assurance mechanism that limits the chances of the objectively less deserving managers from being at the top. An MDA bureaucratic structure that is defined by a business model that is merely input-oriented, that has fundamental competency gaps, that is disconnected from the productivity framework and has an inadequate performance reporting protocol cannot be the channel for achieving a productivity paradigm shift. Reforming the MDAs, therefore, implies making them amenable and flexible enough to face old and current crises and challenges of productivity in Nigeria. Conscious reform interventions have to be made to ignite shifts in workforce culture, work prioritization, work environment, and work method, effective reward system, measurement metrics, skilled workforce, talent development, and management. 

The last strategy for facilitating the paradigm shift is more institutional and hence more fundamental. The good news is that the Federal Government has a new model of national productivity. This is a policy document that must be translated into policy action. And it requires all hands to be on deck, from the Federal Ministry of Labor and Productivity to the National Productivity Centre.

The interventions required to move from policy to action will focus on key areas such as a) getting the critical sectors of the economy to articulate their productivity plans based on agreed national benchmark; b) strategic integration of the various productivity plans and targets into the national plan by the Federal Ministry of Budget and National Planning; c) launch of productivity metrics and tools to be deployed to enable employers and employees to begin to sign on to productivity bargaining and gain-sharing contracts, to institutionalize a new performance-driven compensation system and skills-based workforce pricing; d) value system reorientation; e) national waste reduction strategy that is linked to a new national maintenance management policy and a new asset efficiency scheme around redefined guiding principles; f) a new national qualification framework aligned to education, training, certification, and skills pricing policies; g) input structure including capital-overhead-personnel benchmarks and local content policy; h) SME expansion programme and new regional industrial benefits policy; i) research, development, and innovation; etc.

Nigeria cannot make sense of her post-independence predicament outside of her responsibility to attend to the well-being of her citizens through a functional productivity paradigm around which good governance is built. Any Nigerian government that must succeed needs to necessarily take seriously the capacity readiness of the public service and the educational philosophy of the Nigerian state. It is around these two critical components that we can begin to reflect on the solution to making Nigeria a better country.

Olaopa a retired Federal Permanent Secretary and Professor of Public Administration wrote from Ibadan.