Nigeria drops to 127th in World Economic Forum’s Global Competitiveness Index

NIGERIA has dropped three places to the 127th position from 124th in the latest 2016/17 World Economic Forum’s (Wef) Global Competitiveness Index out of 138 countries surveyed.

 

In the report released yesterday, Nigeria only performed better than Madagascar, Yemen, Venezuela, the Democratic Republic of Congo, Liberia, Sierra Leone, Burundi, Mozambique, Chad, Mauritania and Malawi. It showed that Nigeria ranked lowest in health and primary education and was greatly affected by a weaker macroeconomic environment.

 

A Wef spokesman said: “Nigeria is among the African economies hardest hit by the reduction in commodity prices, falling three places to 127th overall, almost entirely due to its weaker macroeconomic environment (down 27 places) and financial sector (down 10 places). Although still relatively low, the government deficit has almost doubled since last year and national savings have significantly suffered, worsening the current account position.

 

“Banks are less solid, reducing the availability of credit and 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% of children enrolled in primary school and the poor quality and quantity of higher education and training (125th.)"

 

In addition, the report also indicated that sub-Saharan Africa’s competitiveness slightly weakened year-on-year, mainly as a consequence of deteriorating macroeconomic environments across the region. It added that 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, according to the report, help to explain why growth on the continent has dropped from over 5% two years ago to only 3.5% in 2015 and was projected to fall further, to 3%, in 2016. It added that slower growth and falling commodity prices have already started to affect the African financial sector, reducing liquidity and tightening credit conditions.