Nigeria’s low productivity investment stifling wages, revenue — Expert

By Sofiyyah Layole

Renowned economist, Dr. Abidemi Adegboye has attributed Nigeria’s economic struggles specifically weak wages, sluggish growth, and declining revenue to a critical lack of investment in productivity drivers, warning that the economy cannot achieve meaningful progress without urgent structural reforms.

Speaking in Lagos at the World Stage Economic Summit 2025, themed "Tackling the Issue of Low Productivity in Nigeria," Adegboye noted that while specific sectors such as ICT and entertainment have shown high productivity, they remain too small relative to the economy to fully absorb Nigeria’s expanding population.

He cautioned that the country must pay closer attention to productivity trends, as even a marginal one percent decline has measurable, negative effects on national revenue and long-term competitiveness.

Adegboye identified innovation capacity, human capital quality, and demographic strength as the three pillars of productivity but admitted that Nigeria is currently underperforming in all categories.

He described the country’s investment of just 0.3 percent of GDP in research as grossly inadequate for any economy seeking to compete on the global stage.

The Economist further argued that the continued emphasis on widening access to education without a corresponding improvement in quality has weakened the workforce and limited national output.

The economist stressed that strong institutions are central to reversing this decline.

He noted that weak policy execution, poor regulatory environments, and inconsistent government priorities continue to act as brakes on economic progress.

Calling for structural reforms to reposition the economy, Adegboye explained that economic diversification must move beyond rhetoric.

He urged the government to take strategic risks to strengthen the country’s participation in global markets.

A key part of this, he suggested, involves stabilising and scaling agriculture through significant investments in agro-allied processing to create value and jobs across the value chain.

On infrastructure, he emphasised that Nigeria’s logistical challenges including electricity shortages, poor road networks, and weak telecommunications impose exorbitant costs on businesses.

He maintained that inflation would remain elevated as long as these logistical inefficiencies persist, given their direct impact on pricing and overall productivity.

Adegboye also highlighted the critical need for deeper human capital development, particularly in digital skills and health.

He warned that inadequate early childhood nutrition creates long-term cognitive limitations that ultimately manifest as lower national productivity levels.

He proposed that technology and innovation clusters be established around universities to accelerate research and commercialisation.

Citing the Fintech sector, which contributes 5.8 percent to GDP, as an example of the opportunities available, he noted that young people could drive growth if given targeted training and funding.

However, he criticised the financial system for excluding young innovators, stating that current bank lending practices continue to stifle new enterprise creation.

Adegboye concluded by noting that Nigeria’s productivity crisis is both an economic challenge and a social concern.

He maintained that the country’s large population could become a major advantage, but only if government and private sector leaders treat productivity as a central pillar of economic planning rather than an afterthought.