Since the World Economic Forum (WEF) released its 2014 Global Competitiveness Report that indicated Nigeria’s further drop by seven places from 120th to 127th position out of 144 countries, the official reaction to the development has been one of disgust. The WEF said in its 2014-15 Global Competitiveness Report that infrastructure (human and physical) continues to be Nigeria’s toughest challenges and attributes the decline in the country’s global competitiveness to “weakness in public finances (as a result of lower oil exports), continuing institutional frailty and deterioration in national security.”
This implies that that the country’s stock of social and economic infrastructure regrettably remains weak. Sadly, not even the recent emergence of the country as Africa’s largest economy following the statistical stroke of pen called GDP rebasing could prevent its slide to the ugly position among the 144 countries covered in the report that has elicited vociferous debates among analysts.
Against the backdrop of the country’s faltering performance on the global ranking index, countries such as Lesotho (107th) and Cape Verde (114th) registered the largest improvements, while Botswana (74th), Namibia (88th), Zambia (96th), Ghana (111th), Senegal (112th) and Swaziland (123rd) are adjudged relatively stable by the WEF. Among the oil-exporting economies, Gabon remains the highest-ranked economy (106th) followed by Cameroon (116th), while Nigeria only outperformed Angola (140th) and Chad (143rd). Also among Africa’s low-income economies, Ethiopia recorded the biggest leap, rising nine places to 118th. The report states that only three sub- Saharan countries – Mauritius (39th); South Africa (56th) and Rwanda (62nd) are in the top half of the world’s most competitive economies, a development that is indicting to the country’s claims of huge economic success that boggles the mind.
The GCR categorically asserts that institutions in Nigeria remained weak, ranking 129 out of 144. It also identifies insufficiently protected property rights, high corruption and undue influence as other factors that pushed the country deeper into the drop zone of this year’s GCR.
The report further says the deterioration in national security in the country, which was ranked 139 out of 144, remains dire. According to the GCR, “Nigeria must continue to upgrade its infrastructure (134th) as well as improve its health and primary education (143rd). Furthermore, the country is not harnessing the latest technologies for productivity enhancements, as demonstrated by its low rates of ICT penetration.”
We need to understand clearly that the necessary institutions to drive and sustain change to make the country visibly competitive are rather too few, and where they exist at all, have remained weak. The propensity for corruption remains frighteningly high while the fight to squelch the malady is disastrously unfocussed, toothless, colourless and lily-livered. The preponderance of insecurity has literally kept the country on the tenterhooks and in trepidation. More than ever before, we demand that an end be put to the ignominy of terrorism, wave of loathsome kidnapping, barbaric ritual killings, and the armed robbery aberration that work in league to stigmatize our country.
We are, however, consoled that that the country’s performance was not totally bad, though improvement remains desirable. According to the report, Nigeria benefits from its relatively large market size, which ranked 33rd out of 144 and bears the potential for significant economies of scale and a relatively efficient labour market (ranked 40th out of 144) driven by its flexibility (20th out of 144).
However, the Chief Executive Officer, National Competitiveness Council of Nigeria (NCCN), Mr. Chika Mordi has faulted the rankings, insisting that the report used the old GDP figures in its calculations, a development that worsened the nation’s position, according to him. Although he believes it only remains an opinion, it is also acknowledged that a high GCI ranking is good to have. But the opinion of the investors, which reasonably derives from perception, counts a lot in this whole milieu.
He might be right in the observation that: “In this year’s Wall Street Journal survey of multinational CEOs, Nigeria ranked first as an emerging market investment destination. Investors vote with their wallet and Nigeria’s FDI remains the highest in Africa.” However, we believe that the argument that the WEF GCI is a lagging indicator and does not reflect the actions taken this year, also needs to be weighed against the Business Environment Competitiveness Across Nigerian States (BECANS) and similar report by the World Bank as guide in the council’s endeavours going forward.
Competitiveness streams from the set of institutions, policies and factors that determine the level of productivity of a country. GCI scores are calculated by drawing together country-level data in 12 categories – the “pillars of competitiveness” – to create a comprehensive picture of a country’s economic performance.
It is good that Mordi’s Council is taking fundamental steps and putting building blocks in place to convincingly improve the country’s competitiveness. We encourage government to see the report as a big challenge from which great value can be extracted, and task its implementing officials to respond like Paul Anthony Samuelson and Joseph Eugene Stiglitz, to win laurels in adversity.