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NCCN Statement: Nigeria Falls 7 Places in the Global Competitiveness Index 2015

The World Economic Forum (WEF) released the 2015 Global Competitiveness Index (GCI) rankings today and Nigeria ranked 127 of the 144 countries assessed. In light of these results, the National Competitiveness Council of Nigeria (NCCN) recognises the fundamental importance of continuing in its mission to improve Nigeria’s international competitiveness and address constructive portions highlighted in the Index.

However, it is increasingly clear that a perception gap exists between the way some ranking agencies view Nigeria and the reality on the ground of steadily improving trends. The NCCN has begun taking steps to redress this misalignment between perception and reality both internally and externally.

For example, Nigeria’s foreign direct investment (FDI) remains the largest in Africa. A recent Wall Street Journal list of multinational CEOs ranked Nigeria first among emerging market investment destinations. The country also outperformed peers like South Africa and Ghana in macroeconomic stability, this is reflected in stable exchange rates, single digit inflation, fiscal restraint, low debt levels and lower poverty levels.

The most disturbing aspect of the WEF report is the appraisal of security. Nigeria’s security situation is one of the main reasons cited for the drop in rankings, meanwhile, Ukraine moved up six positions from last year and its deteriorating security position adjudged to be “localized”. Even the coup that precipitated the crisis was deemed positive in high “expectations associated with its transition”. To put the situation in context, Russia annexed Ukraine’s Crimean region and a full-scale civil war is raging in most of East Ukraine where Russia is a proxy combatant. It is confounding that while the Ukrainian economy — which required an IMF bailout, is buckling under the cost of the crisis, gas shortages and limited commercial flights — is deemed improved, Nigeria, with its truly localized crisis in portions of three of thirty six states and a commercial capital isolated from the crisis, is downgraded for security reasons and poorer public finances.

Moreover, the underlying analytical framework of the GCI is based upon lagging indicators that do not reflect the present or near-future. Two of the most fundamental changes for Nigeria: the rebasing of our economy and much lower poverty levels than projected.

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. While we respect the WEF, 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.

The NCCN, since commencing full operations in January, has already taken –and is continuing to take — steps that will translate to continued improvements in Nigeria’s competitiveness standings over the coming years.

Our Vice-Chairman, Tony O. Elumelu, CON, Chairman of UBA and Heirs Holdings, commented, “The creation of the NCCN a year ago signaled our country’s commitment to developing a clear competitiveness agenda and implementing vibrant competition strategies to help boost collective prosperity in Nigeria. It will take time to see the full impact of this, but it is already clear that we are moving in the right direction.”

The NCCN is developing its own ‘National Competitiveness Report” with input from leading competitiveness index designers. The report will provide greater insight into the path to improve competitiveness in Nigeria. The NCCN has mobilised the private sector, with input from government, to address these issues. Its “brain-trust” of 56 of Nigeria’s most accomplished individuals on competitive issues – including Aliko Dangote, CEOs of all the leading multinational consulting firms (McKinsey, Accenture etc.), and more. The council will continue to push through reform to improve Nigeria’s competitiveness and eventually drive the process to move the country up the rankings. 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. Which is why Nigeria remains the destination of choice for FDI to Africa.