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Global Competitive Index report of the world economy. Nigeria was a focal point in this reports showing how it performed in each of the 12 Pillars against the Global average score
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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 2012201220122012----2013201320132013
2012 2012 2012 2012 ---- 2013 Global 2013 Global 2013 Global 2013 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 2012-13 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 117 of 144
countries in Institutions, only with
competitive advantages in Burden of
government regulation and Efficiency
of legal framework in challenging
regs.
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 130 of 144
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 39 of 144 countries in Macroeconomic
Environment, with competitive advantages in item 3.01, 3.02, and 3.04.
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 142 of 144
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 113 of 144
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 88 of 144
countries in Goods Market Efficiency,
with competitive advantages in items
6.02 to 6.05.
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 55 of 144
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 68 of 144
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 112 of 144
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 33 of 144
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 66 of 144
countries in Business Sophistication,
with competitive advantages in item
11.05.
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 78 of 144
countries in Innovation.
Summary GCI RankSummary GCI RankSummary GCI RankSummary GCI RankNo. Pillar Rank/144 Score* G.A.S*
1 Institutions 117 3.33 4.04
2 Infrastructure 130 2.28 3.96
3 Macroeconomic Environment 39 5.25 4.69
4 Health and Primary Education 142 3.2 5.42
5 Higher Education & Training 113 3.31 4.15
6 Goods Market Efficiency 88 4.16 4.28
7 Labor Market Efficiency 55 4.5 4.33
8 Financial Market Development 68 4.07 4.09
9 Technological Readiness 112 3.08 4.00
10 Market Size 33 4.63 3.68
11 Business Sophistication 66 3.96 4.02
12 Innovation 78 3.1 3.4
Score – measured on a scale of 1 – 7; the higher the better G.A.S – Average of Score for all 144 countries
Nigeria has competitive advantage in Market Size as well as
Macroeconomic Environment. Also worth noting is that Nigeria
score in Labour Market Efficiency is above the Global Average
Score.
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/144 Score G.A.S
1 Institutions 117 3.33 4.04
2 Infrastructure 130 2.28 3.96
3 Macroeconomic Environment 39 5.25 4.69
4 Health and Primary Education 142 3.20 5.42
5 Higher Education & Training 113 3.31 4.15
6 Goods Market Efficiency 88 4.16 4.28
7 Labor Market Efficiency 55 4.50 4.33
8 Financial Market Development 68 4.07 4.09
9 Technological Readiness 112 3.08 4.00
10 Market Size 33 4.63 3.68
11 Business Sophistication 66 3.96 4.02
12 Innovation 78 3.10 3.4
A realistic goal for Nigeria would be:
- Strive to 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
0
1
2
3
4
5
6
1 2 3 4 5 6 7 8 9 10 11 12
Nigeria
G.A.S
InstitutionsInfrastructure
Macroeconomic
Environment
Health & Pry
Education
Higher Education
& Training
Goods Market
EfficiencyLabor Market Efficiency
Financial Market
Development
Technological
Readiness
Market
Size
Business
Sophistication
Innovation
Nigeria
GAS
1
2
3
4
5
6
7
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_2012 - 2013
Analysis by: WaleWaleWaleWale MicaiahMicaiahMicaiahMicaiah
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