• Tuesday, May 21, 2024
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BusinessDay

Nigeria’s cost of living crisis: A bleak reality for productivity

How Nigeria’s cost-of-living crisis is affecting the supply chain

Nigeria, with its vibrant culture, rich history, and abundant resources, has long been hailed as the giant of Africa, a beacon of hope and potential on the continent. However, beneath the surface of its resplendent facade lies a nation wrestling with a challenge of monumental proportions: the unyielding surge in the cost of living.

This burgeoning crisis, far from a mere fiscal hurdle, has morphed into a formidable threat to the very essence of the nation’s productivity, dimming the aspirations of its industrious citizens. As the cost of essentials skyrockets, from food to fuel, and housing to healthcare, the fabric of Nigerian society is fraying at the seams, leaving its hard-working populace teetering on the brink of economic precarity.

Q: “Moreover, policies aimed at curbing inflation and fostering a conducive business environment are indispensable in fostering a culture of productivity and innovation.”

In the last eight years, Nigeria has weathered two recessions, dealing a severe blow to its economic vitality. These downturns have eroded the purchasing power of consumers and plunged millions into the depths of poverty. Such economic upheavals inevitably reverberate through every stratum of society, but it’s the workforce that bears the brunt of these hardships.

Labour productivity, a vital metric for economic health, has faltered in Nigeria, lagging behind its African counterparts. While nations like Gabon, Botswana, and South Africa boast robust productivity indices, Nigeria languishes with a meagre GDP per hour worked of $7, painting a stark picture of its economic struggles.

Ogugua Belonwu, the esteemed founder and CEO of MyJobMag, aptly captures the grim reality faced by Nigerian workers. Skyrocketing living costs, coupled with erratic electricity supply, have become formidable obstacles, sapping the energy and enthusiasm of the workforce. Many find themselves trapped in a vicious cycle, compelled to juggle multiple jobs merely to make ends meet, inevitably compromising their efficiency and output.

The lamentations of Femi Egbesola, the national president of the Association of Small Business Owners of Nigeria, echo the sentiments of countless entrepreneurs grappling with a hostile business environment. From petrol subsidy removal to foreign exchange woes, a litany of challenges besieges the entrepreneurial spirit, stifling innovation and growth.

Temitope Omosuyi, an astute investment strategy manager at Afrinvest Limited, underscores the myriad hurdles impeding productivity. Inadequate infrastructure, rampant insecurity, and macroeconomic volatility conspire to undermine the workforce’s morale and drive, perpetuating a cycle of underperformance.

Alarming data from the Penn World Table paints a disconcerting picture of Nigeria’s productivity landscape. Ranking among the least productive nations in Africa, Nigeria finds itself outpaced by its peers in human capital development, a sobering indictment of its failure to harness the full potential of its workforce.

The repercussions of Nigeria’s economic malaise extend far beyond its borders, precipitating a brain drain of staggering proportions. The allure of greener pastures abroad beckons, enticing a generation of young talent to seek opportunities overseas, further exacerbating the dearth of skilled labour at home.

In the face of such daunting challenges, it falls upon the government to chart a course towards economic revitalisation. Investment in infrastructure, education, and vocational training is imperative to unlock the latent potential of Nigeria’s workforce. Moreover, policies aimed at curbing inflation and fostering a conducive business environment are indispensable in fostering a culture of productivity and innovation.

The resilient nature and inventiveness of Nigerians provide a potent counterbalance to the spectre of economic instability. This inherent resilience is a wellspring of potential, but it can only truly flourish when nurtured. Concerted efforts are needed to alleviate the burdens that hold back the Nigerian workforce.

By investing in education and skills training, fostering an environment that encourages innovation and entrepreneurship, and tackling issues like corruption and infrastructure deficiencies, Nigeria can unlock the full potential of its people. Only then can this nation reclaim its rightful place as a beacon of hope and opportunity, not just for its citizens, but for the entire continent.