Economic Growth Hindered by Subpar Productivity Levels

The Centre for Advancement of Private Enterprise and the Lagos Chamber of Commerce and Industry have identified diminishing productivity as a key factor impeding economic growth within the nation.

These economic think-tank and commerce representatives expressed this viewpoint in response to the second-quarter Gross Domestic Product (GDP) report published by the National Bureau of Statistics.

In a statement shared with The PUNCH, the Centre for Advancement of Private Enterprise (CAPE) mentioned that the recent economic reforms had resulted in more adverse effects than initially anticipated.

The Chief Executive Officer, who signed the statement, projected a recovery in the economy in the medium to long term as existing imbalances within the economy are addressed.

The statement conveyed, “Persistent vulnerabilities in the economy’s structure, particularly issues of productivity and competitiveness within the real economy, persist.

“The Q2 GDP growth rate fell below the anticipated sub-Saharan average of 3.1% for 2023, though it performed better compared to the projected growth rates of 1% for the Euro Zone and 1.8% for the United States.”

Yusuf also highlighted that sectors like Oil Refining, Livestock, Crude Petroleum and Gas, as well as Textiles, are currently facing recession due to macroeconomic, structural, or policy-related challenges.

He further elaborated, “Progress within these sectors remains limited due to elevated inflationary pressures, fluctuations in exchange rates, escalating energy expenses, security concerns, and the intricate dynamics of the oil and gas domain.”

During an exclusive conversation with The PUNCH, Gabriel Idahosa, the Deputy President of the Lagos Chamber of Commerce and Industry, attributed the drop in productivity in the country’s real economy to recent economic reforms.

He went on to explain that this situation had significantly contributed to the foreign exchange crisis, causing hardships for the business community.

Idahosa commented, “The lackluster state of trade isn’t surprising. These economic reforms have been propelling the economy in a specific direction. The value of a currency is determined by exports minus imports. Therefore, if we manage to bolster our exports, the trend should eventually reverse.”

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