By ABIYE TOB-OGU

The World Bank estimates that more than 50 per cent of Nigerians are poor! This is perhaps not so shocking when we look beyond the charade of online posts that depict affluence and carousing as the main staple of life in the Nigerian ecosphere. National poverty is often linked to economic productivity, whereby increasing efficiency typically leads to greater valuable output per capita (person) that a country generates and vice versa; i.e. productivity determines the number of poor persons in a country.

Simply put, economic productivity refers to the efficiency with which goods and services are produced, often measured by output per labour hour or output per capita (population). It is a simple measure of how many units are produced within a specific period, whereby higher outputs from shorter time frames are considered positive.

It is important to emphasize that it is not the ragged old lady, the acclaimed destiny helper or burdened benevolent partner that determines poverty rather it is about how much valuable products or services a nation is generating per individual. To reduce the number of persons living in poverty, we must produce more, because only sustainable production will lead to a smaller number of persons living in poverty. In this snapshot, the future is dire because the key variable in this equation is significantly lagging; we are not producing enough to support our population, and our population is increasing at about 2-3 per cent annually per the CIA Factbook.

Nigeria has typically lagged in productivity but more so in the last decade or so. Compared to similar economies like Turkey, Mexico, South Africa etc., our productivity metrics has not kept pace with required numbers. In 2024, our GDP per capita was estimated at $806, compared to $6,253 and $3,338 estimates for South Africa and Egypt respectively. However, population growth estimates were 2.52 per cent (Nigeria), 1.07 per cent (South Africa) and 1.49 per cent (Egypt) in 2024.

Appreciably, we have no excuse when we consider that a nation like Turkiye (GDP $15,473) that has had to accommodate close to three million Syrian refugees in the last decade or so, saw a population growth of just 0.61 per cent. So, when experts express concern for Nigeria, it is not one borne out of sentiments but of clear concern that more needs to be done to improve our national output compared to our population growth.

So, what are the key challenges bogging Nigeria in terms of economic productivity? They are the usual and perennial suspects, including poor infrastructure (technology and construction), low access to energy, insecurity, access to funding and weak regulatory (legal) frameworks. In term of priorities, energy must be the core challenge. I am of the strong opinion that Nigeria must prioritise energy efficiency over anything else; extreme but I offer some arguments accordingly. The World Bank emphasises that energy is the lifeline of the modern economy and a foundation for development.

Without energy, hospitals cannot operate, businesses cannot grow output, security is undermined, construction work is tediously sluggish, learners cannot study after dark, and services cannot thrive. Access to power or inadequate energy is Nigeria’s biggest challenge. No country has developed without effective access to energy and unfortunately, Nigeria does not generate, does not efficiently distribute and does not effectively account for electric power. No country has achieved sustainable economic growth whilst relying on generators for basic energy needs and this goes beyond rhetoric to underscore the urgency of reforming Nigeria’s power sector. Nigeria needs to have power sufficiency by any means necessary within the shortest time frame if we are to stem the productivity limitation.

Expanding access to reliable and affordable energy will not only raise living standards, but it is also the foundation for driving mechanisation, automation and efficiency; all factors that help increase productivity exponentially.

At macro levels, the highest overhead for most businesses in Nigeria is power supply, ultimately imposing constraints on their capacity to produce. Not only is the cost excessive, but power supply is also sometimes completely unavailable, no diesel for generators, no supply from the grid. At unit level, inadequate or unreliable power gobbles up productive time in households. The time spent manually washing plates, clothes, etc., could be spent reading a book, coding a document for a client or finishing a drawing that is to be sold. The power inadequacy is robbing Nigeria of its productive time and that is why we cannot have widespread continuous throughput systems supported by ‘shift work’ or timed earning patterns.

I could offer more problem perspectives, but the message is already clear: without energy efficiency, Nigeria is not going to escape poverty because our production output will never be enough to allow our economy to thrive.

Additionally, Nigeria’s substantive infrastructure remains very inadequate to support or enhance productivity. In core industries like manufacturing, there are very few mechanised businesses or manufacturing parks that are dedicated to engineering and mass production. Management sage, Michael Porter, highlights clustering as a strategic tool for enhancing productivity in his book “Competitive Advantage of Nations”. Clustering is an outcome of strategy and infrastructure. The idea must exist, and the supporting physical infrastructure needs to be in place. For example, the siting of a cement factory in Ogun State should coincide with a policy-driven business park that supports the production of sustainable packaging materials, small

building research labs, production optimisation apprenticeships in the nearby universities, etc. These will typically be founded on the allocation or designation of infrastructure like land, roads, access to water, maybe even buildings to support the localised industry. However, in reality, Nigeria still does not have good roads (if they even exist in some areas); we still do not have adequate silos to store our agricultural output leading to significant post-harvest losses (an estimated 3.5 trillion naira problem); manufacturing is still largely dependent on manual and small scale outfits because we do not have the physical infrastructure to support downstream and upstream chains in the production of goods outside the oil industry. 

Internet and mobile communications are still a struggle for most businesses and development projects do not often follow metric-driven outcomes. I am often of the opinion that nothing captures the state of a nation’s infrastructure like the state of the toilets in many public facilities, including international airports.

Finally, regulatory or legal frameworks are essential to security, funding and investments. It is a given that most investors want to know that the rule of law is prioritised and that policies are focused on mitigating political risks for investors. That is why many of us are not queuing to send money to North Korea. This also extends to the perception of security risks. There are correlations between wholesome regulatory policies and security; nations that prioritise policy transparency attract more investors and investors drive productivity. If policies can be upended

by any leader, savvy investors will avoid the market. In the same vein, the country will probably attract ‘bad faith’ investors who are looking to plunder rather than build. That is why most (if not all) investors in Nigeria are steadily looking to move their funds outside the country once they become material.

Investment risk assessments would typically comprise factors like corruption perception, conflict, property and contract rights at the very least. Where the rules or policies around these are not transparent or enforceable, investors are less likely to participate in an economy and the measure of transparency and enforceability is a thriving legal system that offers equal and fair access to justice.

The combination of these factors suggest that we are not going to become a viable economy anytime soon, at least not by conventional measures. Nigeria is going to have to innovate ways to improve output and focus on some key industries like agriculture, manufacturing and retail.

Innovation is not and does not have to be focused on inventing things, we simply have to find a way of incrementally improving on what others are doing well and adapting same as local solutions that boost productivity.

*Some key things we can work towards to address these issues

Prioritise access to energy. Deregulate the power sector completely and encourage community-based power generation. Government does NOT need to make money from access to energy, at least, not for the next few years. Imagine an individual who decides to start a goat farm. He has capital to procure three goats and does so. However, after the first kid is born, he kills off one of the female goats and sells it for income, and continues in this fashion. Will the individual ever achieve his goal of a big farm? Probably not. But if he allows the goats to procreate and live for three to five years, then he has something to build on. 

Invest in conventional and alternative energy sources, remove import taxes from all power generation equipment; asides generators, encourage modular solutions for communities. The community in the Sahelian Sokoto State should not be reliant on power from Kanji dam or some fancy power plant, they should be harnessing the power of the sun to support productivity. The community in the creeks of Bayelsa should be strategising around small modular solutions. Urban areas can explore modular solutions, including waste to energy, WtE, options as part of a wider ecosystem, that goes beyond power generation to generate environmental benefits. Power must be more accessible, cheaper and reliable if productivity is going to improve. Access to energy must be localised where possible.

In terms of infrastructure, we can innovate on current triple-helix approaches to explore deference to a public, citizen, partnership, PCP, model of development. In this instance, the government (public) commits to certain infrastructure projects, subject to the completion of certain critical supporting infrastructure by citizens (localised) as a means of driving development infrastructure. There are two principal reasons for this: one, the people of Nigeria are already doing this, i.e. developing their own infrastructure (water boreholes, electricity, drainages, etc); a PCP approach simply moves the rationale to a community benefit basis backed by irrevocable government commitments to complete their part within a fixed time frame. 

Secondly, the standard public, private partnership, PPP, has often failed to provide fair value. In many instances, the government brings in its cronies and uses the PPP to siphon off public funds, many times with sub-standard or zero value created, leading the public to bear consequential debt for generations. Additionally, we need to start thinking of local and national planning differently. We have been too focused on the magnitude of our problems that we have become conditioned to ‘manage’ policies, often buoyed by theory of change models. I think we ought to move towards backcasting at all levels, i.e. envisaging our desired future as a comprehensive model and tracing back to where we are. An example is the ‘Eco Atlantic City’, where the final output was first envisaged and then progressed towards. 

So, I ask: why aren’t the whole of Lagos, Abuja, Rivers, Kano and so on, completely modelled, including functional production/ output planning metrics for the future point in view? What does Abuja look like in 2050 and how much does Abuja need to be providing to viably support its population? Same for Bayelsa, Kaduna, Sokoto and even local government areas. I would like to see more work done in this area.

Finally, regulatory and legal policies must be transparent and consistent. No economy is perfect, but investors want predictability. It is not a show of strength to amplify the destruction of properties for violation of planning years or decades after they were erected, rather it is a show of shame that underlines the lack of regulatory and legal consistency. This is especially so, when no public official is prosecuted for the falsification of permits or misleading members of the public. 

Again, models like Backcasting help to improve consistency because the rationale is very transparent and deviations can be easily challenged. This is primarily the role of policy makers or governance. What is the cost of setting up a business? Why do I have to pay dues to ‘area boys’ for my business to function or why do informal levies and extortion remain obstacles to running legitimate businesses in Nigeria? How do I trust that the results of the next ‘selection’ will not cause an unrest that leads to the destruction of my business? Perhaps more critically, how is my investment tied to the overall productivity goal of the local community?

Will I receive a fair hearing if I challenge the government in the law courts? Can I access and rely on the regulations relating to my investment? Are government processes automated and tracked? Are there monopolies that investors should be aware of? These are some important questions that need to be addressed if we are to attract local and foreign investors.

In summary, Nigeria’s economic productivity remains critically low, threatening not just growth but national survival. Whilst the road ahead is complex, there are clear strategies that can yield transformative change. These include prioritizing adequate access to energy, innovating approaches to driving local infrastructure models, adopting alternative planning models, and committing to transparent governance. These are not optional, they are essential to pivot in the right direction. Nigeria cannot afford to indulge in inertia. The time for purpose-driven action is now.

*Abiye is an experienced academic within the Operations Management and Decision Sciences (OMDS) division at Sheffield University, UK.