A 3-day working week harms productivity

Without a doubt, the recent removal of petrol subsidy has unleashed a barrage of negative effects on Nigerian citizens across the board. But there is a need for caution as the nation responds to this development. An impulsive response to the price realignment could have long-term unintended consequences of greater magnitude.

As expected, the ripple effects of this action are reverberating throughout the entire economy. It has raised the cost of fuel by over 200 per cent, thereby putting a lot of strain on the pocket of the average car owner in the country. Quite expectedly, this rise in the price of petrol has led to a spike in transportation fares, which in some cases rose by greater margins. In turn, these have translated into higher prices of goods and services, since these activities themselves are dependent on transportation which now cost much higher.

These consequences have elicited reactions from some state governments. In this regard, two states – Edo and Kwara – have led the pack, with each initiating measures to curtail their employees’ exposure to the new prices.

Both states have announced a reduction to three from five the number of days per week that civil and public service workers are to report to their offices, until further notice.

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The reduction in the number of work days is certainly not enough or the most appropriate response to this development. Even in Kwara, the government admitted the existence of some categories of workers whose nature of work does not permit such a measure. It said it is trying to fashion out what can be done about such workers. In the private sector, it is not clear what can be done there, since the workers are also affected by the same price and fare increases.

This development has thrown up various policy challenges that must be put in proper context for coherent responses at all levels. First, it is important that Nigerians see this subsidy removal as a search for an equilibrium price that will be affordable for Nigerians so that the economy can continue and the government will still achieve its aim. Therefore, it will be out of context to see the current price as final. Rather, people should know that if allowed free play, market forces will lead to lower prices as the search for market equilibrium prices intensifies.

Seen from this perspective, therefore, the decision by these states is just a knee-jerk reaction and shows that our leaders don’t know what productivity means. They ought to put into consideration the hours that will be lost due to this reduction in work days. For a country where labour productivity is low, this measure will only exacerbate an existing problem.

Nigeria’s low labour productivity can only be appreciated when put in context. In 2011, labour productivity was N2.98 in monetary terms, according to a report by the National Bureau of Statistics. This rose to N3.77 by 2014, but by the 2016 first quarter, it fell to N3.07.

The days of reacting first to issues before thinking through them should be over in our country. We elected our leaders to offer quality leadership. We need thinkers in the corridors of power. They ought to sit back and think of ways of improving the economy rather than resorting to ineffectual shortcuts.

This brings to the fore the need for our governments, from federal to state, to be proactive. We hereby call on governments to stop announcing measures without first thinking through their potential impacts on the citizenry. This diminishes the value of leadership.

The leadership of this country at various levels should be concerned about the way we can improve productivity in the economy.

The most important factor affecting the nation’s productivity level remains the human factor. Nigerians’ attitude to work is, to say the least, generally poor. If the states that are reducing the number of weekdays to three want to maintain the level of output, then they are indirectly admitting the obvious, that already there are workers who are not even supposed to be in their employ in the first place.

This means in effect that such states are actually carrying unproductive workers who can easily be dispensed of without hurting the output of goods and services. We know that there are basically two ways of raising the level of productivity: one is to generate more from the same number of resources or maintain the level of production from a lower quantity of resources.

Given these, it is up to the states to decide which approach they seek to follow to achieve higher productivity. But generally, the federal, state and local governments must seek a solution that will lessen the burden on the people while still achieving its goal. And the federal must take the lead by providing a clear palliative policy so that states can follow.