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Economic cost of Nigeria’s many public holidays

Recent figures from the National Bureau of Statistics (NBS) highlighted the huge economic cost of public holidays in the country. According to a report released last week by the agency for the fourth quarter of 2016, Nigeria lost at least N9.74 billion last year as a result of different public holidays declared by the Federal Government. About 15 days were reportedly observed as national holidays during the year. The report said that a total of 81,151,885 workers spent 37.38 million man-hours to contribute N29.29 trillion to the economy at an average productivity rate of N783.51. 

It further explained that using this estimate with the expectation that workers spent an average of eight productive hours daily, the 15 public holidays observed in 2016 would have cost the nation N9.74bn. This sum of money estimated to have been lost to the idle period, according to the NBS, is 10 percent of the budgetary allocation of 19 states in 2016, which could deliver at least a fully equipped teaching hospital that will improve Nigeria’s beleaguered healthcare system. This is troubling, indeed. 

However, other reports covering the same period say the NBS figures were grossly understated, because the financial loss to the economy as a result of public holidays was much higher than N9.74 bn. A study by the Abuja Chamber of Commerce and Industry said each public holiday declared by the Federal Government results in a loss of about $1.88bn.

This, according to the President of the Abuja Chamber, Mr. Tony Ejikonye, is besides the holidays declared by state governors, which also adversely affect productivity and slow down economic activities.

We agree that the NBS figure could be underestimated. Nevertheless, there is no disputing the huge financial cost of public holidays to the economy, even though Nigeria is not the only country in the world that observes public holidays. The truth is that the negative impact of these work-free days on national productivity is profound, and needs to be reduced. 

For instance, stock market traders estimated that the three-day holiday in the first week of July 2016, a period covered by the NBS report, cost the Nigerian economy N138bn. There were scheduled treasury bill auctions of N94bn and N44bn treasury bill maturities for that period that were put off as a result of the holidays.                             

Consequently, the increased cash flow reportedly left the money market with a hefty N267.10bn surplus balance, thereby reversing the N300bn shortfall a week earlier and pushing down the cost of borrowing among banks.

As a result, banks had to approach the CBN’s discount window to borrow short-term cash to enable them meet obligations and ease liquidity pressures. Statistics from the Nigerian Stock Exchange (NSE) show that during the week of the three-day holiday in July 2016, only 126.97 million shares were traded on the exchange in contrast to the 1.469 billion shares traded a week earlier. This is a massive financial loss to the economy. Anyone in the informal sector, who has to survive on daily wages, will suffer financial loss during any public holiday.            

Lagos State is said to suffer the most financially during public holidays. Statistics show that the state accounts for about 53 percent of the manufacturing employment in the country and 30 percent of the Gross Domestic Product (GDP) of the states. The GDP in Nigeria was valued at $481.07bn in 2015, down from an all-time high of $568.51bn in 2014. Thus, experts estimate that one public holiday will cost the country more than $1.88bn. Besides, businesses which have borrowed money from banks pay interest on borrowed funds on public holidays.                              

Undoubtedly, there are too many public holidays in Nigeria, some of them irrelevant. If the idea of holiday is to give people time to celebrate and commemorate important events, holidays should only be granted for such days, whether they are weekends or not.

Altogether, all levels of government need to be reminded that there is a correlation between prosperity and national productivity. It follows that the higher the national productivity, the more the prosperity. Of course, that cannot be achieved with many idle days. Nigerians need to develop a better attitude to work. As a nation, it is time for us to place better value on time and productivity. A nation in recession should stop indulging its citizens in too many public holidays.  

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Editor, Online: Ikenna Emewu
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