ABSTRACT
The study examined macroeconomic policy measures, which have influenced productivity growth in Nigeria. In order to ascertain the sources of productivity growth, a growth accounting exercise was undertaken using secondary data for 1966 – 2000. The aim was to break down economic growth into components associated with changes in factor inputs (capital and labour) and the Solow residual which is also the technological progress or total factor productivity (TFP). Today, the yardstick of measuring performance among nations is determined by the rate of economic growth. Many countries in the Sub – Saharan African region including Nigeria, are partly termed poor because of their low rates of growth. These low rates of growth have been a source of concern thereby making this study inevitable.
In this study, internationally comparable data was used and alternative methods for estimating share of capital in output were explored. The standard primal model, which uses changes in quantities of factors of production, was adopted. It is preferred to the dual model which uses changes in factor prices as price data when available, are mostly unreliable. Also, the model is standard since it uses the neoclassical production function typified in the Cobb – Douglas form.
Growth rate of TFP was found to be 2.31 for the entire study period (1966 – 2000). This was, however, not a true reflection as periodic breakdowns showed impressive TFP growth rates for the 60s, 70s and post-SAP periods. The early 80s, however, showed growth deceleration. TFP growth was low in the early 80s as a result of weakness of financial systems reflected in over borrowing and excessive investment together with inadequate regulatory responses. But economic policies became liberalized with economic and financial deregulation during the post-SAP period with TFP sometimes growing at rates comparable with those of the developed economies. While productivity growth could be attributable to agricultural and oil exports in the Pre-SAP period, the productivity gains in the post-SAP period largely reflect market-oriented reforms. It is, therefore, apparent that if policies relating to market-oriented reforms are judiciously implemented and the abundant human and natural resources are effectively tapped, Nigeria will continue to reap considerable gains from improved productivity growth.
