Some analysts say the Global Competitiveness Index (GCI) is a good substitute for the World Bank popular Doing Business report following the suspension of the report used as a valuable tool to examine the business environment of many countries.
The GCI, which is compiled annually by the World Economic Forum (WEF), assesses how countries achieve and maintain economic growth and how the business environment of every country is influenced by competitiveness.
“Apart from the Doing Business report, GCI also does some ranking about businesses and the economic environment. If the Doing Business report is not available, then people should fall back on the GCI report in terms of accessing ease of doing business,” Muda Yusuf, former director-general, Lagos Chamber of Commerce and Industry (LCCI) said.
Similarly, Moses Ojo, a Lagos-based economic analyst said both of the reports have credibility but that one cannot be used as a replacement for the other. “But for the time being that the report is suspended, the GPI can be used in its place pending the time that the suspension will be lifted.”
The GCI report published in 2004 focuses mainly on the assessment of sustained economic growth, prosperity, and global competitiveness across 140 countries. It notes that as a nation develops, wages tend to increase and that in order to sustain this higher income, labour productivity must improve for the nation to be competitive.
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The index is composed of 12 pillars, which are divided into three basic groups: factor-driven, efficiency-driven, and innovation-driven, each implying a growing degree of complexity in the operation of the economy.
The 12 pillars of competitiveness are institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, good market efficiency, labour market efficiency, financial market development, technological readiness, and market size, production of new and different goods using the most sophisticated production processes and Innovation.
In the 2019 edition of the GCI, Nigeria ranked 116 most competitive nation in the world out of 140 countries, moving down by one place to 115 in the previous edition.
Damilola Adewale, a Lagos-based economic analyst noted that although it can suffice to ease of doing business, it reports 75 percent.
“We should know that both reports measure different things, even though they are related. The GCI tells us how each country deploys mechanisms to utilize their productive resources, while ease of doing business report, tells you the atmosphere of the business environment itself,” Adewale added.
On the suspension of the Doing Business report, there are concerns that the suspension of the report could have a negative effect or perception on the economy or by investors since the report has been the selling point of Nigeria over the years particularly in the country’s rush for capital.
“Unfortunately, what is most likely to happen is that the previous ranking will still be in effect. And this is a problem for Nigeria because you cannot cite if things are improving or not. So, policymakers need to find another way to rank how business is improving in the country otherwise they will not be able to cite that when speaking to investors,” Joachim MacEbong, a senior analyst at SBM Intelligence said.
Recall that Nigeria moved up by 24 places on the Doing Business rankings in 2017, and gain, moved up 15 places in 2019. The country was twice named as one of the top 10 most improved economies in the world in the last three editions of the report, one of only two African countries to make this highly prestigious list in 2019.
