A sinking feeling washed over me as I put down my phone. Yet another employee requested to work from home, but this time, not due to illness or personal matters. The cause was more systemic, more concerning—the unbearable rise in commuting costs owing to recent fuel price hikes.
My husband, Bisi, who was finishing off his Amala, shot me a knowing look. This was just one of the many harsh realities of conducting business in Nigeria, a hard pill we’ve had to swallow since moving back. For a new company who needed more hands on deck, we grappled daily with the shifts and pulls due to what I call “the Nigerian Factor.”
After two fulfilling decades in the United States, working for Fortune 100 companies like PepsiCo, Cargill, DuPont, NOV, and BASF, we returned to Nigeria amidst the peak of the pandemic. Armed with a combined resume boasting experience in engineering, operational excellence, supply chain, and business growth, we were eager to contribute our skills to the homeland we loved. However, our excitement was quickly replaced with disillusionment as we confronted the debilitating state of Nigeria’s workforce.
From interviewing prospective engineers to business-service employees, we found the local talent pool shockingly under-equipped. Many boasted educational qualifications, but lacked the basic skills, operational discipline, innovative spirit, and creativity needed to perform effectively. The task of training and managing them was draining and time-consuming, leaving us with little energy to focus on our own work. Conversations with peers and colleagues only confirmed our predicament. Hiring university graduates was proving to be as effective as recruiting secondary school holders, a testament to Nigeria’s deteriorating education system.
Indeed, the roots of Nigeria’s productivity crisis burrow deep into the failures of its education sector. As per UNESCO’s data, Nigeria’s illiteracy rate was a staggering 59% among youths and 65% among adults over 15 years old in 2021. Despite the glaring need for reform, the government’s budget allocation to education has consistently been less than the recommended 26% by UNESCO.
The impact of this educational deficit is acutely felt by start-ups and small businesses, who face the daunting task of finding competent personnel. A survey by the National Bureau of Statistics found that 40% of Nigerian start-ups cite a lack of skilled workforce as a significant barrier to growth. With the skilled labour deficit forcing companies to hire more workers than necessary, Nigeria’s productivity continues to plummet, dampening business efficiency and profitability.
McKinsey Africa’s recent report underscores the gravity of the situation. Nigeria’s productivity is dangerously low, lagging over ten times behind emerging markets like India. Once grouped with Egypt and Morocco as countries outperforming Africa’s average economic growth, Nigeria now grapples with a stagnant economy, struggling exports, and an underwhelming per capita investment.
The strain on the Nigerian worker extends beyond low productivity and poor education. High commuting costs, exacerbated by recent fuel subsidy removal, and inflation driven by heavy reliance on imported goods are squeezing the middle class. This economic pressure translates into a harsh reality for Nigerian businesses. My entrepreneur friends and I are finding ourselves caught in a precarious balancing act. While we have offered fuel stipends and raised salaries to keep pace with inflation, these are temporary measures that threaten the financial health of our businesses.
The inflationary pressures on food, fuel, and services have added a substantial burden to the operational costs of businesses, making it increasingly challenging to remain profitable. The cost of a crate of eggs, for instance, has jumped from N1350 in 2021 to N3700 in recent months. This spiralling cost is impacting every facet of society, from the average market woman in Mile 12 to top executives living in Lagos Island.
On top of this, sporadic electricity supply means businesses are forced to incur additional expenses on generators and other alternatives. This erratic power supply, coupled with other challenges, has led to a staggeringly high failure rate among start-ups and small businesses. Amidst such unfavourable conditions, those who can are opting to emigrate, exacerbating the brain drain and further shrinking Nigeria’s pool of skilled labour.
To break free from this relentless cycle of under productivity, Nigeria needs urgent, comprehensive reforms, particularly in the education sector. For the nation to thrive and compete globally, it is critical for every individual to be productive and contribute meaningfully. It is time for all stakeholders—government, private sector, and civil society—to come together to build a more productive and prosperous Nigeria. The alternative? A continued decline—an outcome we can ill afford.
Adesiyan is the founder and CEO of WorkLife Africa, an organisation dedicated to closing the skill gap of Africa’s workforce to stimulate economic growth.