Transcript Document

Global Competitiveness Index:
Focus on Nigeria
StatiSense ® - Wale Micaiah ©
Global
Competitiveness
Index:
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 GCI
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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: Institutions
The 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:
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Excessive bureaucracy and red tape
Overregulation
Corruption
Dishonesty in dealing with public
contracts
 Lack of transparency and
trustworthiness
2: Infrastructure
Extensive 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 Environment
The 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 and Primary Education
A 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 Education & Training
Quality 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 Market Efficiency
Countries 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 Market Efficiency
The 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 Market Development
An 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 Readiness
In 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 Size
The 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 Sophistication
Business 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: Innovation
Innovation 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 Rank
No.
Pillar
1 Institutions
2 Infrastructure
3 Macroeconomic Environment
4 Health and Primary Education
5 Higher Education & Training
6 Goods Market Efficiency
7 Labor Market Efficiency
8 Financial Market Development
9 Technological Readiness
10 Market Size
11 Business Sophistication
12 Innovation
Score – measured on a scale of 1 – 7; the higher the better
Rank/142
Score*
G.A.S*
111
135
121
140
114
73
70
86
106
34
64
82
3.31
2.21
3.96
3.28
3.18
4.18
4.36
3.89
3.08
4.59
3.96
3.01
4.04
3.98
4.81
5.45
4.10
4.23
4.33
4.07
3.88
3.69
3.99
3.36
G.A.S – Average of Score for all 142 countries
No.
1
2
3
4
5
6
7
8
9
10
11
12
Pillar
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
Rank/142
Score*
G.A.S*
111
135
121
140
114
73
70
86
106
34
64
82
3.31
2.21
3.96
3.28
3.18
4.18
4.36
3.89
3.08
4.59
3.96
3.01
4.04
3.98
4.81
5.45
4.10
4.23
4.33
4.07
3.88
3.69
3.99
3.36
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.
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
Data source:
- The World Economic Forum https://www.weforum.org/
- WEF_GlobalCompetitivenessReport_2011 - 2012
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source – © Wale Micaiah
Analysis by: Wale Micaiah
e: [email protected]
m: 08078001800
b: walemicaiah.blog.com
w. www.statisense.info
StatiSense ® - Wale Micaiah ©