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Thursday, 29 September 2016

Global Competitiveness Ranking: Nigeria drops 3 spots to 127th

World economics competitiveness report 2016-2017 shows Nigeria ranked 127th out of 138 countries surveyed.
The report by the world economic forum, explains that Nigeria fell three places on the index due to the fall in commodity prices and weaker macroeconomic environment.

“Although still relatively low, the government deficit has almost doubled since last year and national savings has significantly suffered, worsening the current account position.

“Banks are less solid, reducing the availability of credit; despite the central bank ending its currency peg, financial authorities have retained restrictions on access to the interbank market, meaning access to finance will remain difficult for many businesses.

“Additional factors holding back Nigeria’s competitiveness include an underdeveloped infrastructure (132nd), which is again rated as the country’s most problematic factor for doing business; insufficient health and primary education (138th), with only 63 percent of children enrolled in primary school; and the poor quality and quantity of higher education and training (125th).”

The remaining 10 top ranked economies are Netherlands at 4th from 5th; Germany 5th from 4th; Sweden 6th from 9th; United Kingdom 7th from10th; Japan 8th from 6th; Hong Kong SAR 9th from 7th and Finland 10th from 8th.

South Africa is the highest ranked economy in Africa at47th with 4.47 score from 49th in the previous report followed by 52 Rwanda at 52th with 4.41 from 58th and Botswana at 64th with 4.29 from 71th.

At the bottom of the ranking is Yemen at 138th with 2.74 score below some African countries including Liberia131th; Sierra Leone132th; Mozambique133th; Malawi134th; Burundi135th; Chad136th; and Mauritania 137th.

On the sub-Saharan Africa’s competitiveness, the report said it “has slightly weakened year on year, mainly as a consequence of deteriorating macroeconomic environments across the. Public finance has been put under stress by economic slowdowns among trading partners and persistently low commodity prices, which affect the commodity-exporting countries. These factors help to explain why growth has dropped from over 5.0 percent two years ago to only 3.5 percent in 2015 and is projected to fall further, to 3.0 percent, in 2016.

“Short-run pressure on public funds may have long lasting effects on African economies by reducing much needed investments in infrastructure and education, while higher uncertainty about country financial risks could shrink private investments. Slower growth and falling commodity prices have already started to affect the African financial sector, reducing liquidity and tightening credit conditions. As a result, although the banking system remains generally solid, business leaders rate the banking environment as worsening in two-thirds of the countries assessed by the GCI, and access to finance is mentioned more often as a problematic factor for doing business in the region.

“Improvements have been achieved in the business environment, information and communication technologies, and infrastructure, but these have been insufficient to improve overall productivity levels, as reflected by a substantially stable GCI performance at the regional level (this changed by less than 1 percent compared to the last edition). Continued progress in these areas will be challenging, given low commodity prices and low growth trajectories in advanced and emerging economies—but progress is necessary, as these countries are among the areas where Africa still has the largest disparities with the world’s most competitive economies. Improving infrastructure, technological readiness, and health and primary education continue to be sub-Saharan Africa’s main priorities as the region seeks to reap the demographic dividend by creating more employment opportunities for the millions of youth who will enter the labor market every year.”

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