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Nigeria global competitiveness index macroeconomic environment (2006 - 2012)


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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.

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Nigeria global competitiveness index macroeconomic environment (2006 - 2012)

  1. 1. Nigeria Global Competitive Index:Macroeconomic Environment 2006- 2006-2012 StatiSense ® - Wale Micaiah ©
  2. 2. The World Economic Forum (WEF) Geneva,Switzerland produces a yearly report to measurecountries and regions competitiveness amongNations of the world using Global CompetitivenessIndex (GCI)This presentation focuses on Nigeria’s GCI ratingfrom 2006 – 2012 on the 3rd Pillar: Macroeconomic Pillar:Environment,Environment for the purpose of knowing how stableour Macroeconomic Environment are over a periodof 7years as this would help know where moreefforts need to be applied in order to achievedbetter growth and development.3 rd Pillar: Pillar: Macroeconomic Environment
  3. 3. The 12 Pillars of GCI Institutions Infrastructure BASIC Macroeconomic Environment REQUIREMENTS Health and Primary Education Higher Education & Training Goods Market Efficiency Labor Market Efficiency Financial Market Development Technological Readiness EFFICIENCY Market Size ENHANCERS Business Sophistication Innovation INNOVATION & SOPHISTICATION FACTORS
  4. 4. The stability of the Macroeconomic Environment is importantfor business and, therefore, is important for the overallcompetitiveness of a country. It is also recognized thatmacroeconomic instability harms the economy. The governmentcannot provide services efficiently if it has to make high-interestpayments on its past debts.Running fiscal deficits limits the government’s future ability toreact to business cycles and to invest in competitiveness-enhancing measures. Firms cannot operate efficiently wheninflation rates are out of hand. In sum, the economy cannot growin a sustainable manner unless the macro environment is stable.It is important to note that this pillar evaluates the stability ofthe macroeconomic environment, so it does not directly takeinto account the way in which public accounts are managed bythe government. This qualitative dimension is captured in the1st Pillar: Institutions.
  5. 5. There were 5 indicators used in measuring thestrength of Nigeria’s Macroeconomic Environment: Government budget balance Gross national savings Inflation, annual General government debt Country credit ratingIndicators 1 to 4 were measured in percentage while Country Credit rating wasmeasured on a scale of 0 – 100.
  6. 6. Definition of Terms:Government budget 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 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: Annual percent change in year average consumer price index.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: 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.
  7. 7. Nigeria Ranking & Scores 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% Effort = 1 – C3/C2Nigeria’s best effort was made in 2009 with a 84.96% performance,the value experienced a deep for the next 2years (2010, 2011). Ithas however experienced a revamp as its current performance is at72.92%. As at today, Nigeria ranks 39th of 144 countries , this so farhas been the best shot at getting to the Top20 mark.
  8. 8. Scores here are measured on percentage (%) basis except for thelast indicator, Country Credit Control which was measured on ascale of 0 – 100.Indicators 2006 2007 2008 2009 2010 2011 2012Macroeconomic Environment 4.83 5.58 5.70 5.43 4.25 3.96 5.25Government budget balance 10.70 9.80 5.60 0.90 -5.20 -7.19 1.08Gross national savings 33.42 52.00 44.90 38.00 22.10 31.10 28.36Inflation, annual 17.90 5.47 11.24 12.36 13.72 10.84General government debt 14.70 14.30 16.35 17.86Country 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%.
  9. 9. Amongst the 12 Pillars, Nigeria performed best in theMacroeconomic environment scores and rankings showing a stableenvironment worth Investors’ exploration.However, this is hampered with some not too corroboratingindexes as reflected in the Institutions pillar. Needless to say, that ifall challenges are surmounted, such as Wasteful Gov’t spending,Trust in public servants/services, Good use of public funds and thelikes, Nigeria remain a country to beat in terms of economicdevelopment.Another point of call is rising Inflation rate as well as weak creditrating. With such a rating; lending of money for the execution ofprojects are hampered and in turn grassroot developments thatcould translate into so growth in the economy are highly hindered. Nigeria currently ranks 39th of 144 Nations in Macroeconomic environment.
  10. 10. 2006 7 6 2012 5 2007 Nigeria 4 3 2 1 Average2011 2008 2010 2009
  11. 11. Data source:- The World Economic Forum The Global Competitiveness Index 2012-2013 data platform Freely share, freely use and freely acknowledge the source – © Wale Micaiah Analysis by: Wale Micaiah e: m: 08078001800 b: w. StatiSense ® - Wale Micaiah ©