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Nigeria Global

Competitive Index:

MacroeconomicMacroeconomicMacroeconomicMacroeconomic

2006200620062006----2012201220122012

EnvironmentEnvironmentEnvironmentEnvironment

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)

This presentation focuses on Nigeria’s GCI rating

from 2006 – 2012 on the 3333rdrdrdrd PillarPillarPillarPillar:::: MacroeconomicMacroeconomicMacroeconomicMacroeconomic

EnvironmentEnvironmentEnvironmentEnvironment, for the purpose of knowing how stable

our Macroeconomic Environment are over a period

of 7years as this would help know where more

efforts need to be applied in order to achieved

better growth and development.

3333rdrdrdrd PillarPillarPillarPillar: : : : MacroeconomicMacroeconomicMacroeconomicMacroeconomicEnvironmentEnvironmentEnvironmentEnvironment

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

The stability of the Macroeconomic Environment is important

for business and, therefore, is important for the overall

competitiveness of a country. It is also recognized that

macroeconomic instability harms the economy. The government

cannot provide services efficiently if it has to make high-interest

payments on its past debts.

Running fiscal deficits limits the government’s future ability to

react to business cycles and to invest in competitiveness-

enhancing measures. Firms cannot operate efficiently when

inflation rates are out of hand. In sum, the economy cannot grow

in a sustainable manner unless the macro environment is stable.

It is important to note that this pillar evaluates the stability of

the macroeconomic environment, so it does not directly take

into account the way in which public accounts are managed by

the government. This qualitative dimension is captured in the

1st Pillar: Institutions.

There were 5 indicators used in measuring the

strength of Nigeria’s Macroeconomic Environment:

� Government budget balance� Gross national savings� Inflation, annual� General government debt� Country credit rating

Indicators 1 to 4 were measured in percentage while Country Credit rating wasmeasured on a scale of 0 – 100.

Definition of Terms:Government budget Government budget Government budget Government budget balance: balance: balance: balance:

This is a core Government Finance Statistics (GFS) balance that measures the extent to

which the general government is either putting financial resources at the disposal of

other sectors in the economy and nonresidents (net lending), or utilizing the financial

resources generated by other sectors and nonresidents (net borrowing).

Gross national Gross national Gross national Gross national savings: savings: savings: savings: Defined as public- and private sector savings as a percentage of nominal GDP. National

savings equals gross domestic investment plus the current account balance.

Inflation, annual: Inflation, annual: Inflation, annual: Inflation, annual: Annual percent change in year average consumer price index.

General government debt: General government debt: General government debt: General government debt: Gross debt consists of all liabilities that require payment or payments of interest and/or

principal by the debtor to the creditor at a date or dates in the future. This includes

debt liabilities in the form of special drawing rights, currency and deposits, debt

securities, loans, insurance, pensions and standardized guarantee schemes, and other

accounts payable.

Country credit rating: Country credit rating: Country credit rating: Country credit rating: Institutional Investor’s Country Credit ratings developed by Institutional Investor are

based on information provided by senior economists and sovereign-debt analysts at

leading global banks and money management and security firms.

Nigeria Ranking & ScoresNigeria Ranking & ScoresNigeria Ranking & ScoresNigeria Ranking & Scores

Effort = 1 – C3/C2

Year Country Count Rank Score Effort

2006-2007 121 71 4.83 41.32%

2007-2008 131 28 5.58 78.63%

2008-2009 134 26 5.70 80.60%

2009-2010 133 20 5.43 84.96%

2010-2011 139 97 4.25 30.22%

2011-2012 142 121 3.96 14.79%

2012-2013 144 39 5.25 72.92%

Nigeria’s best effort was made in 2009 with a 84.96% performance,

the value experienced a deep for the next 2years (2010, 2011). It

has however experienced a revamp as its current performance is at

72.92%. As at today, Nigeria ranks 39th of 144 countries , this so far

has been the best shot at getting to the Top20 mark.

Scores here are measured on percentage (%) basis except for the

last indicator, Country Credit Control which was measured on a

scale of 0 – 100.

Indicators 2006 2007 2008 2009 2010 2011 2012

Macroeconomic Environment 4.83 5.58 5.70 5.43 4.25 3.96 5.25

Government budget balance 10.70 9.80 5.60 0.90 -5.20 -7.19 1.08

Gross national savings 33.42 52.00 44.90 38.00 22.10 31.10 28.36

Inflation, annual 17.90 5.47 11.24 12.36 13.72 10.84

General government debt 14.70 14.30 16.35 17.86

Country credit rating 36.10 38.20 35.80

Nigeria Inflation rate is one of the highest in the

world, ranked 127th. Also, there is a rising

Government Debt profile, currently standing at

17.86%.

Amongst the 12 Pillars, Nigeria performed best in the

Macroeconomic environment scores and rankings showing a stable

environment worth Investors’ exploration.

However, this is hampered with some not too corroborating

indexes as reflected in the Institutions pillar. Needless to say, that if

all challenges are surmounted, such as Wasteful Gov’t spending,

Trust in public servants/services, Good use of public funds and the

likes, Nigeria remain a country to beat in terms of economic

development.

Another point of call is rising Inflation rate as well as weak credit

rating. With such a rating; lending of money for the execution of

projects are hampered and in turn grassroot developments that

could translate into so growth in the economy are highly hindered.

Nigeria currently ranks 39th of 144 Nations in Macroeconomic environment.

2008

20092010

2011

2012

2006

2007

1

2

3

4

5

6

7

Average

Nigeria

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Freely share, freely use and freely acknowledge the

source – © Wale Micaiah

Data source:

- The World Economic Forum https://www.weforum.org/

- The Global Competitiveness Index 2012-2013 data platform

Analysis by: WaleWaleWaleWale MicaiahMicaiahMicaiahMicaiah

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