Role of Productivity Growth in Economic Growth: Evidence from Nigeria (1970–2010)

Abstract The Global Conference for Wikimedia and The Economist held in London, 2014, ranked Nigeria as the largest economy in Africa using the nominal gross domestic product. But, income redistribution, equality and productivity improvements, which are indicators for the development of an economy, remain at large. Against this background, the study is set to examine the extent to which the positive trend experienced in economic growth has translated into development in Nigeria; this is with a view to ascertaining the effect of growth translating into economic development. With particular emphasis placed on the productivity patterns in Nigeria, the study determined the contribution of productivity growth and economic growth as well as the causal relation between both variables. Using the concept of productive efficiency as a major determinant, the autoregressive distributed lag (ARDL) and Granger causality estimates were employed. It was discovered that a unidirectional existed between both variables. Moreover, it was discovered that productivity growth contributed positively to real economic growth and negatively to nominal economic growth. This result implies that the presence of innovations through technology has augmented productivity intricately but not so visibly in Nigeria.