Nigerians are working harder, but that does not necessarily mean businesses are becoming more productive.
Across the country, manufacturers contend with energy costs, distributors navigate difficult logistics, retailers operate on increasingly thin margins, and small businesses manage the daily realities of expensive capital and weakening consumer purchasing power. Yet, despite all this effort, an important economic question remains: are Nigerian enterprises becoming more productive?
The Nigerian Economic Summit Group (NESG), in its Nigeria Private Sector Outlook 2026, describes productivity as one of the defining challenges facing Nigerian businesses.
The report notes that real GDP growth improved from 3.4 percent in 2024 to 3.9 percent in 2025, while inflation moderated and the exchange rate became relatively more stable. Yet these improvements have not translated sufficiently into broad-based improvements in firm-level productivity.
The reasons are familiar. High energy costs, limited access to affordable finance, infrastructure gaps, insecurity and logistics inefficiencies continue to place what NESG describes as a “production ceiling” on Nigerian businesses.
These structural constraints are real, and better data will not make them disappear. Analytics cannot generate electricity, repair a highway or lower interest rates.
But this raises another question.
When capital, energy, people and infrastructure are already constrained, how effectively are Nigerian businesses allocating the resources they do have?
This is where data deserves a much bigger place in Nigeria’s productivity conversation.
Productivity Is an Allocation Problem
Productivity is not simply about working harder or producing more. It is also about getting greater value from the resources already available. For a business, those resources include capital and labour, but also inventory, delivery vehicles, salespeople, warehouse capacity, marketing budgets and management attention. The challenge is that these resources are often deployed across customers, stores, products and markets that have very different economic characteristics.
Treating them as though they are the same can be expensive. I saw this firsthand in a store-clustering project involving retail outlets in Lagos. Rather than treating the stores as one relatively homogeneous market, the analysis grouped them into four clusters based on their commercial characteristics.
One cluster — the highest tier, classified as Gold — accounted for approximately 50 percent of category volume. That finding immediately changed the commercial question. Instead of asking how the business could serve every store in the same way, the question became: should stores that contribute disproportionately to category volume receive a different service model?
For the highest-volume stores, there was an opportunity to consider direct service, concentrating distribution and commercial resources where they could generate greater value while using more cost-efficient routes to market for lower-volume outlets. No additional stores had been created. No new consumers suddenly appeared. The company did not acquire additional trucks simply because an analysis had been completed.
What changed was its visibility into the market. Data did not create more resources. It created an opportunity to allocate existing resources more intelligently. That distinction is fundamental to productivity.
The same principle applies to growth. When businesses set growth targets, a common instinct is to look broadly across the customer base: acquire more customers, sell more products, increase marketing or push the sales organisation harder.
But customers rarely present equal growth opportunities. In another piece of analytics work, I looked at customers at a cohort level rather than treating the entire customer base as one group. Segmenting customers according to their behaviours and commercial characteristics made it possible to identify where incremental growth was more likely to come from.
Some customers represented retention opportunities. Others had the potential to increase purchase frequency. Some could expand their spending across categories. And others offered considerably less incremental opportunities. This changes the question from “How do we grow our customers?” to “Which customers present the strongest opportunities for growth, and what specifically would cause each group to grow?”
That may sound like a subtle distinction. Economically, it is not. A naira of marketing expenditure, an hour of a salesperson’s time or a promotional discount deployed against a customer with significant headroom for growth may produce a very different return from the same resource spread indiscriminately across the entire customer base.
This is commercial productivity: not simply spending more to generate growth, but improving the precision with which resources are deployed.
Nigerian Businesses Are Already Generating Data
Nigeria is not starting from zero. Every day, businesses generate information through sales transactions, inventory movements, payments, deliveries, production lines, customer complaints, digital platforms and supply chains. The challenge is increasingly what happens after that information is generated.
Research from the International Finance Corporation and World Bank provides some useful context.
Researchers examined 3,325 microenterprises across seven African countries, including Nigeria. They found that the use of smartphones and computers for business was strongly associated with better outcomes in productivity, sales, profits and wages.
Yet fewer than 7 percent of the microenterprises surveyed used these digital technologies for business purposes, while 71 percent reported that they saw no need for them. It does not prove that technology or data alone causes productivity. Nor does it mean that Nigeria’s productivity constraints can be reduced to a technology-adoption problem. It does, however, point to an important gap between the availability of digital tools and their productive application.
The World Bank reached a related conclusion in its Nigeria Digital Economy Diagnostic, observing that Nigeria was capturing only a fraction of its digital economic potential. That gap matters because collecting information is not the same thing as using it.
A retailer may have years of point-of-sale transactions but still manage every store similarly. A distributor may know what it delivered yesterday without understanding which customers are disproportionately expensive to serve. A manufacturer may collect production records without identifying which machines, shifts or processes account for the greatest downtime.
A bank may have millions of customer transactions while still applying broad marketing strategies to customers with very different behaviours and needs.
The presence of data does not automatically create a data-driven business.
Beyond the Economics of Averages
One-size-fits-all business models become particularly costly when resources are constrained.
The “average customer” may spend a certain amount, but no actual customer is necessarily that average customer. The “average store” may sell a particular volume, while a relatively small group of stores could account for a disproportionate share of category sales. The “average product” may appear profitable even while certain SKUs absorb working capital and warehouse capacity without generating adequate returns.
The problem with averages is that businesses do not serve averages. They serve individual customers, stores and markets whose economics can be radically different. Analytics allows businesses to see those differences.
This does not always require sophisticated or expensive technology platforms. For many businesses, the productivity journey can begin with much simpler questions:
Which 20 percent of our customers generate most of our contribution? Which products are tying up working capital without moving? Which stores justify direct distribution? Which customers have the greatest potential to increase their spending?
Which delivery routes generate the highest cost per order? Where are we repeatedly losing production hours? Which promotions generate incremental sales rather than simply discounting purchases that would have happened anyway?
These are fundamentally data questions, but they are also management questions.
The Productivity Lever Businesses Can Control
The government still has an enormous responsibility to improve electricity, transport infrastructure, security, access to finance and the broader environment in which businesses operate. Indeed, NESG’s 2026 outlook argues that these structural bottlenecks continue to suppress investment and competitiveness. But businesses cannot wait for every structural constraint to disappear before pursuing productivity.
They can ask whether every truck is being deployed where it creates the greatest economic value. Whether every naira of marketing expenditure is targeting the customers with the greatest opportunity. Whether inventory reflects actual demand. Whether sales teams are spending their time on the right accounts. Whether management decisions are being made based on averages and intuition when transaction-level evidence tells a different story.
The question for Nigerian enterprises, therefore, is not simply whether they have data. Most businesses generate some form of it already. The more consequential question is:
Does the data change how the business allocates its resources?
Nigeria’s productivity challenge will not be solved by one intervention. The country needs better infrastructure, more reliable energy, productive capital, stronger institutions and a more predictable operating environment. But within those constraints lies another opportunity. In an economy where resources are expensive, knowing precisely where to deploy them becomes a competitive advantage.
The businesses that understand which customers to pursue, which stores to prioritise, which products to back, which costs to attack and which opportunities to ignore will increasingly outperform those still applying one-size-fits-all approaches.
Data will not solve Nigeria’s productivity challenge. But it can help Nigerian businesses make considerably more productive decisions with the resources they already have.
And that may be one of the most immediately available places to start.
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