In Q2 2016 there were a number of challenges that may have impacted on labour productivity, some of which spilled over from the previous quarter, Q1 2016. For parts of the quarter, the petrol scarcity from Q1 lingered on, coupled with the hike in petrol and diesel prices. Investment in the economy was low, though some government investments were recorded during the quarter, the volume of private investment and foreign direct investments was still considerably low compared to previous years. Though there was some improvement in power towards the tail end of the quarter, which partly accounted for the slight improvement in Labour productivity, there was still significant power issues during the reference quarter, which affected production especially in the industrial sector. In addition, the scarcity of foreign exchange caused a large disparity between the parallel and official exchange rates, which made imported goods more expensive and affected the ability of businesses reliant on raw material imports for their production. As a result of all the above factors, firms had to retrench workers, resulting in the unemployment rate rising by 12.2% over the previous quarter and slowed productivity as recorded by GDP.

Data source: National Bureau of Statistics

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