global ompetitiveness index - nigeria
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StatiSense ® - Wale Micaiah ©
Global Competitiveness Index:Global Competitiveness Index:Global Competitiveness Index:Global Competitiveness Index:
FocusFocusFocusFocus onononon Nigeria Nigeria Nigeria Nigeria
Global Global Global Global
Competitiveness Competitiveness Competitiveness Competitiveness
Index:Index:Index:Index:
Focus on Nigeria Focus on Nigeria Focus on Nigeria Focus on Nigeria
The World Economic Forum (WEF) Geneva,
Switzerland produces a yearly report to measure
countries and regions competitiveness among
Nations of the world using Global Competitiveness
Index (GCI)
The GCI was launched in 2005 and currently in its 7th
year, it has identified 12 Pillars that measures and
contribute to Nations’ Competitiveness.
This presentation focuses on Nigeria’s GCI for the
purpose of knowing where we are currently
competitive and how we can compete globally.
Data Source: WEF_GlobalCompetitivenessReport_2011 - 2012
The 12 Pillars of GCIThe 12 Pillars of GCIThe 12 Pillars of GCIThe 12 Pillars of GCI� Institutions
� Infrastructure
� Macroeconomic Environment
� Health and Primary Education
� Higher Education & Training
� Goods Market Efficiency
� Labor Market Efficiency
� Financial Market Development
� Technological Readiness
� Market Size
� Business Sophistication
� Innovation
BASIC
REQUIREMENTS
EFFICIENCY
ENHANCERS
INNOVATION &
SOPHISTICATION
FACTORS
1: Institutions1: Institutions1: Institutions1: InstitutionsThe institutional environment is determined by the legal and
administrative framework within which individuals, firms, and
governments interact to generate income and wealth in the economy.
Overall, Nigeria ranks 111 of 142
countries in Institutions, only with
competitive advantages in Burden of
government regulation and Strength
of investor protection.
The lack of strong Institutions lead to: � Excessive bureaucracy and red tape
� Overregulation
� Corruption
� Dishonesty in dealing with public
contracts
� Lack of transparency and
trustworthiness
2: Infrastructure2: Infrastructure2: Infrastructure2: InfrastructureExtensive and efficient infrastructure is critical for ensuring the
effective functioning of the economy, as it is an important factor
determining the location of economic activity and the kinds of
activities or sectors that can develop in a particular economy.
Overall, Nigeria ranks 135 of 142
countries in Infrastructure, with no
competitive advantage in any of it’s
metrics.
It is impossible for a Nation to experience
economic turn-around without:
� Electricity (constant supply)
� Transportation and
� Communication - telecoms
Nigeria is about the only country of her status without an efficient rail system!
3: Macroeconomic Environment3: Macroeconomic Environment3: Macroeconomic Environment3: Macroeconomic EnvironmentThe stability of the macroeconomic environment is important for
business and, therefore, is important for the overall competitiveness
of a country. The government cannot provide services efficiently if it
has to make high-interest payments on its past debts.
Overall, Nigeria ranks 121 of 142 countries in Macroeconomic
Environment, with competitive advantages in Gross national savings, %
GDP and General government debt, % GDP.
4: Health 4: Health 4: Health 4: Health and Primary and Primary and Primary and Primary EducationEducationEducationEducationA healthy workforce is vital to a country’s competitiveness and productivity.
Workers who are ill cannot function to their potential and will be less
productive. Poor health leads to significant costs to business, as sick workers
are often absent or operate at lower levels of efficiency. In addition to
health, this pillar takes into account the quantity and quality of basic
education received by the population, which is increasingly important in
today’s economy.
Overall, Nigeria ranks 140 of 142
countries in Health and Primary
Education, with no competitive
advantage in any of it’s metrics.
The Health of a Nation, is her Wealth!
5: Higher 5: Higher 5: Higher 5: Higher Education & TrainingEducation & TrainingEducation & TrainingEducation & TrainingQuality higher education and training is crucial for economies that want to
move up the value chain beyond simple production processes and products.
In particular, today’s globalizing economy requires countries to nurture
pools of well-educated workers who are able to adapt rapidly to their
changing environment and the evolving needs of the production system.
This pillar measures secondary and tertiary enrollment rates as well as the
quality of education as evaluated by the business community.
Overall, Nigeria ranks 114 of 142
countries in Higher Education &
Training, with no competitive
advantage in any of it’s metrics.
Similarly, the Wealth of a Nation, is highly dependent on
her Citizens’ level of education!
6: Goods 6: Goods 6: Goods 6: Goods Market EfficiencyMarket EfficiencyMarket EfficiencyMarket EfficiencyCountries with efficient goods markets are well positioned to produce the
right mix of products and services given their particular supply-and-demand
conditions, as well as to ensure that these goods can be most effectively
traded in the economy. The best possible environment for the exchange of
goods requires a minimum of impediments to business activity through
government intervention.
Overall, Nigeria ranks 73 of 142
countries in Goods Market Efficiency,
with competitive advantages in
Extent of market dominance, Extent
and effect of taxation and Total tax
rate.
7: Labor 7: Labor 7: Labor 7: Labor Market EfficiencyMarket EfficiencyMarket EfficiencyMarket EfficiencyThe efficiency and flexibility of the labor market are critical for ensuring that
workers are allocated to their most efficient use in the economy and
provided with incentives to give their best effort in their jobs. Labor markets
must therefore have the flexibility to shift workers from one economic
activity to another rapidly and at low cost, and to allow for wage
fluctuations without much social disruption.
Overall, Nigeria ranks 73 of 142
countries in Labor Market Efficiency,
with competitive advantages in
Flexibility of wage determination,
Rigidity of employment index and
Hiring and firing practices.
Efficient labor markets ensure:� Clear relationship between worker incentives
� Promotion meritocracy at the workplace
� Equity in the business environment between women and men
8: Financial 8: Financial 8: Financial 8: Financial Market DevelopmentMarket DevelopmentMarket DevelopmentMarket DevelopmentAn efficient financial sector allocates the resources saved by a nation’s
citizens, as well as those entering the economy from abroad, to their most
productive uses. It channels resources to those entrepreneurial or
investment projects with the highest expected rates of return rather than to
the politically connected.
Overall, Nigeria ranks 86 of 142
countries in Financial Market
Development, with competitive
advantages in Financing through
local equity market and Legal
rights index.
Trust and Transparency!
9: Technological 9: Technological 9: Technological 9: Technological ReadinessReadinessReadinessReadinessIn today’s globalized world, technology is increasingly essential for firms to
compete and prosper. The technological readiness pillar measures the agility
with which an economy adopts existing technologies to enhance the
productivity of its industries, with specific emphasis on its capacity to fully
leverage ICT in daily activities and production processes for increased
efficiency and competitiveness.
Overall, Nigeria ranks 106 of 142
countries in Technological Readiness,
with no competitive advantage.
There is high correlation between infrastructure & Technology!
10: Market 10: Market 10: Market 10: Market SizeSizeSizeSizeThe size of the market affects productivity since large markets allow firms to
exploit economies of scale. In the era of globalization, international markets
have become a substitute for domestic markets, especially for small
countries. There is vast empirical evidence showing that trade openness is
positively associated with growth.
Overall, Nigeria ranks 34 of 142
countries in Market Size, with
competitive advantages in the only
two metrics - Domestic market size
index and Foreign market size index.
Population does matter!
11: Business 11: Business 11: Business 11: Business SophisticationSophisticationSophisticationSophisticationBusiness sophistication concerns two elements that are intricately linked:
the quality of a country’s overall business networks and the quality of
individual firms’ operations and strategies. These factors are particularly
important for countries at an advanced stage of development, when, to a
large extent, the more basic sources of productivity improvements have
been exhausted.
Overall, Nigeria ranks 64 of 142
countries in Business Sophistication,
with competitive advantages in State
of cluster development and
Willingness to delegate authority.
12: Innovation12: Innovation12: Innovation12: InnovationInnovation is particularly important for economies as they approach the
frontiers of knowledge and the possibility of integrating and adapting
exogenous technologies tends to disappear.
Overall, Nigeria ranks 82 of 142
countries in Innovation, with
competitive advantages in Company
spending on R&D.
Summary GCI RankSummary GCI RankSummary GCI RankSummary GCI RankNo. Pillar Rank/142 Score* G.A.S*
1 Institutions 111 3.31 4.04
2 Infrastructure 135 2.21 3.98
3 Macroeconomic Environment 121 3.96 4.81
4 Health and Primary Education 140 3.28 5.45
5 Higher Education & Training 114 3.18 4.10
6 Goods Market Efficiency 73 4.18 4.23
7 Labor Market Efficiency 70 4.36 4.33
8 Financial Market Development 86 3.89 4.07
9 Technological Readiness 106 3.08 3.88
10 Market Size 34 4.59 3.69
11 Business Sophistication 64 3.96 3.99
12 Innovation 82 3.01 3.36
Score – measured on a scale of 1 – 7; the higher the better G.A.S – Average of Score for all 142 countries
Apparently, the only competitive advantage Nigeria have is
in Market Size which is partly due to her population size.
The farther we are from the GAS the more precarious that
sector of the economy is; Infrastructure being the worst of
all requiring urgent attention.
No. Pillar Rank/142 Score* G.A.S*
1 Institutions 111 3.31 4.04
2 Infrastructure 135 2.21 3.98
3 Macroeconomic Environment 121 3.96 4.81
4 Health and Primary Education 140 3.28 5.45
5 Higher Education & Training 114 3.18 4.10
6 Goods Market Efficiency 73 4.18 4.23
7 Labor Market Efficiency 70 4.36 4.33
8 Financial Market Development 86 3.89 4.07
9 Technological Readiness 106 3.08 3.88
10 Market Size 34 4.59 3.69
11 Business Sophistication 64 3.96 3.99
12 Innovation 82 3.01 3.36
A realistic goal for Nigeria would be:
- Strive to reach get those pillars with less than 3.5 score
to 3.5 which is the average of the scale (1 – 7)
- Next is to target the respective GAS value for each Pillar
- Then we can decided to reach for higher marks
3.5
StatiSense ® - Wale Micaiah ©
Freely share, freely use and freely acknowledge the
source – © Wale Micaiah
Data source:
- The World Economic Forum https://www.weforum.org/
- WEF_GlobalCompetitivenessReport_2011 - 2012
Analysis by: WaleWaleWaleWale MicaiahMicaiahMicaiahMicaiah
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