National Competitiveness Council of Nigeria (NCCN) Challenges WEF competitiveness ranking

The World Economic Forum (WEF) 2015 Global Competitiveness Index (GCI) rankings which placed Nigeria 127 of the 144 countries assessed is based on lagging indicators, according to the National Competitiveness Council of Nigeria (NCCN).

“The underlying analytical framework of the GCI is based upon lagging indicators that do not reflect one of the most fundamental changes for Nigeria: the rebasing of our economy,” said Chika Mordi, CEO of the NCCN, in a statement made available to BusinessDay.

“It is instructive to note that Nigeria’s rebased GDP, which the WEF report declared as Africa’s largest economy, was not used in their computations, with negative consequences for our scores,” said Mordi.

Nigeria rebased her GDP statistics earlier this year, showing it had

leapfrogged South Africa to become Africa’s biggest, with an economy valued at $503 billion.

GDP per capita was boosted by the rebasing moving up to $3,000, while the budget deficit to GDP and public debt to GDP is estimated at 1 percent and 11 percent respectively.

The country will run a post rebasing current account (C/A) surplus this year, estimated at five percent of GDP, compared to South Africa’s estimated current account deficit of 4.5 percent.

The Nigerian economy will expand by 6.2 percent in 2014, accelerating from a 5.5 percent expansion last year, the National Bureau of Statistics (NBS) office said last week.

“We are deeply concerned by the assertion that Nigeria had poorer public financing in the 2013/4 survey period. This is in direct conflict with the reality of fiscal restraint, solid macroeconomic essentials and more diversified government revenue,” Mordi said.

Analysts say there exists a perception gap between the way some ranking agencies view Nigeria and the reality on the ground of improving trends.

For example, Nigeria’s foreign direct investment (FDI) remains the largest in Africa in nominal terms.

A recent Wall Street Journal list of multinational CEOs ranked Nigeria first among emerging market investment destinations.

“We have seen significant pick-up in interest from foreign and local business minds, despite variables such as inadequate infrastructure, political instability, corruption, access to finance and crime,” said Abiodun Keripe, Head, research and strategy at Elixir Investment, in a response to questions.

“These investors in my opinion are able to leverage on the strength of the Nigerian economy and also rightly set up ‘customised’ structures to deal with these challenges of doing business locally.”

The NCCN is developing its own ‘National Competitiveness Report’ with input from leading competitiveness index designers which will provide greater insight into the path to improve competitiveness in Nigeria, according to Mordi.

“We note that while a ranking is a “good to have”, it remains an opinion.The most important opinion is that of the investment community and they vote with their wallets and that is why Nigeria remains the destination of choice for FDI to Africa,” said Mordi.

The NCCN was created a year ago by the Federal Government to develop a clear competitiveness agenda and implement vibrant competition strategies to help boost collective prosperity in Nigeria.

The Global Competitiveness Report’s rankings are based on the Global Competitiveness Index (GCI), which was introduced by the World Economic Forum in 2004.

Defining competitiveness as 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 – institutions; infrastructure; macroeconomic environment; health; primary education, higher education and training; goods market efficiency; labour market efficiency; financial market development; technological readiness; market size; business sophistication; and innovation.

BusinessDay