Nigeria: What Our Output Numbers Say About the Economy's Jobs Mix

30 November 2020
opinion

The most powerful story told by the output numbers for the July-September quarter (2020) is the one by "crop production". According to the National Bureau of Statistics (NBS), this sector of the economy grew by 1.38 per cent in the quarter, down on the 2.41 per cent by which it grew in the same period last year. When you consider how much the Buhari administration has spent on trying to boost this sector since it took office, this kind of result leaves few choices but to ask whether this is the most efficient use of scarce resources. The story is likelier to produce more tears when you realise that the sector's underperformance has been a consistent feature of the past one year ― dropping from 3.26 per cent growth in the first quarter of last year to current levels.

Is there a less lachrymose case, therefore, for favouring sectors of the economy with much stronger output performances? Take telecommunications, for example. It grew by 17.36 per cent in the three months to end-September 2020, from growth of 12.16 per cent in the same period last year. And this is in spite of government's benign neglect ― not just negative neglect, in terms of poor infrastructure, but outright obstructive behaviour, when you think of how big a let to the industry, state governments' insistence on prohibitive right of way charges have been.

Flip this coin, and you are likely to be told that the crop production sector accounts for a large proportion of domestic employment. Indeed, that "agriculture (the big church sector comprising crop production) contributed 28.41% to nominal GDP in the third quarter of 2020". Within this context, the federal government's interest in the sector is parsed as part of a scheme for protecting jobs ― over two-thirds of domestic employment is in this sector. This, however, is where our current policy making fails. Government may be duty-bound to provide safety nets to catch those who fall through the market economy's interstices, including through putting social security payments and conditional cash transfer schemes in place. But it has no business protecting jobs. For, as society and the underlying economy changes, the local mix of jobs will change too ― jobs will be lost in certain sectors and created in new ones. Rarely have governments anywhere succeeded in properly calling the outcome of this process.

My mother used to make much of how she was one of the first persons trained at the Nigeria Ports Authority in Port Harcourt in the use of the teleprinter. One of the first lessons I had to learn on my first vacation job as a teenager were how to use the facsimile machine, and the Gestetner duplicating machine (with its very dirty carbon footprint). Imagine if a government had committed to retaining jobs in these functions in the light of the significant advances we have made today in the information, communication, and technology spheres?

In a sense, the Buhari administration's insistence on supporting agriculture at its artisanal and medium-scale levels is no different. And this is important in another way, The oil and gas sector of the economy continues to struggle ― contracting by 13.9 per cent on an annualised basis in the third quarter of this year, having shrunk by 6.6 per cent in the previous quarter.

Understandably, Nigerians are obsessed by the global market for oil prices. Export of the oleaginous stuff accounts for nearly all our foreign exchange earnings. But you need not be an expert in petroleum studies to understand that we may be nearing oil's peak as an engine of global growth. Protecting jobs in the oil industry will be as meaningless in the next decade as would protecting the office assistant's job 40 years ago or protecting farm jobs today ― when new forms of employment are opening in the manufacture of electric vehicles, wind turbines, and solar panels.

Far better for government to make it easy for labour to move from industries at their peak to more productive sectors of the economy. Few better ways to do this than to make the economy more agile and flexible ― especially through putting competent regulators in place. All of these will require that we educate our vast youthful population. And that the focus of this education will be on strengthening science, technology, engineering and mathematics skills. That way we will boost domestic productivity, while guarding against the progressive consignment of our economy to the bottom rung of the global production ladder.

Still, over the near-term, our policy makes need be reminded that the recovery in manufacturing that we saw in the third quarter will be hard to sustain if households do not resume spending.

Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.

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