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.

1. Nigeria Global
Competitive Index:
Macroeconomic
Environment
2006-
2006-2012
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2. The World Economic Forum (WEF) Geneva,
Switzerland produces a yearly report to measure
countries and regions competitiveness among
Nations of the world using Global Competitiveness
Index (GCI)
This presentation focuses on Nigeria’s GCI rating
from 2006 – 2012 on the 3rd Pillar: Macroeconomic
Pillar:
Environment,
Environment for the purpose of knowing how stable
our Macroeconomic Environment are over a period
of 7years as this would help know where more
efforts need to be applied in order to achieved
better growth and development.
3 rd Pillar:
Pillar: Macroeconomic
Environment

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. 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.
Running fiscal deficits limits the government’s future ability to
react to business cycles and to invest in competitiveness-
enhancing measures. Firms cannot operate efficiently when
inflation rates are out of hand. In sum, the economy cannot grow
in a sustainable manner unless the macro environment is stable.
It is important to note that this pillar evaluates the stability of
the macroeconomic environment, so it does not directly take
into account the way in which public accounts are managed by
the government. This qualitative dimension is captured in the
1st Pillar: Institutions.

5. There were 5 indicators used in measuring the
strength of Nigeria’s Macroeconomic Environment:
Government budget balance
Gross national savings
Inflation, annual
General government debt
Country credit rating
Indicators 1 to 4 were measured in percentage while Country Credit rating was
measured on a scale of 0 – 100.

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. 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/C2
Nigeria’s best effort was made in 2009 with a 84.96% performance,
the value experienced a deep for the next 2years (2010, 2011). It
has however experienced a revamp as its current performance is at
72.92%. As at today, Nigeria ranks 39th of 144 countries , this so far
has been the best shot at getting to the Top20 mark.

8. Scores here are measured on percentage (%) basis except for the
last indicator, Country Credit Control which was measured on a
scale of 0 – 100.
Indicators 2006 2007 2008 2009 2010 2011 2012
Macroeconomic Environment 4.83 5.58 5.70 5.43 4.25 3.96 5.25
Government budget balance 10.70 9.80 5.60 0.90 -5.20 -7.19 1.08
Gross national savings 33.42 52.00 44.90 38.00 22.10 31.10 28.36
Inflation, annual 17.90 5.47 11.24 12.36 13.72 10.84
General government debt 14.70 14.30 16.35 17.86
Country 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. Amongst the 12 Pillars, Nigeria performed best in the
Macroeconomic environment scores and rankings showing a stable
environment worth Investors’ exploration.
However, this is hampered with some not too corroborating
indexes as reflected in the Institutions pillar. Needless to say, that if
all challenges are surmounted, such as Wasteful Gov’t spending,
Trust in public servants/services, Good use of public funds and the
likes, Nigeria remain a country to beat in terms of economic
development.
Another point of call is rising Inflation rate as well as weak credit
rating. With such a rating; lending of money for the execution of
projects are hampered and in turn grassroot developments that
could translate into so growth in the economy are highly hindered.
Nigeria currently ranks 39th of 144
Nations in Macroeconomic environment.

10. 2006
7
6
2012 5
2007
Nigeria 4
3
2
1 Average
2011 2008
2010 2009

11. Data source:
- The World Economic Forum https://www.weforum.org/
- The Global Competitiveness Index 2012-2013 data platform
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source – © Wale Micaiah
Analysis by: Wale Micaiah
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m: 08078001800
b: walemicaiah.blog.com
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