The world, they say, is a global village where a competitive landscape emerged several years ago as a result of technological revolution. The technological revolution has compelled firms and nations to introduce new goods and services to the market. The global economy in which goods and services flow freely among nations pressures firms continuously to become more competitive. There are several perspectives on the term globalization. However, it is the spread of economic innovations around the world as well as the political and cultural adjustments that accompany this diffusion. Globalization encourages international integration which has increased for almost 25 years.
Today, nations compete in a global economy that is complex, highly uncertain and unpredictable. The global economy rewards effective performers whereas poor performers are forced to restructure significantly to enhance their strategic competitiveness. Achieving globalization and competitiveness is challenging not only for developed nations but also for those that are still developing. With respect to competitiveness, one may ask why some nations are successful while others fail. Those nations that have failed lack effective leadership, while those with success stories have leaders who continuously scan the global environment, taking right decisions at the right time, aligning competent people behind their vision and empowering citizens as well as opening doors of opportunities for citizens irrespective of economic obstacles.
The global economy is that in which goods, services, people, skills and ideas move freely across geographic boundaries. The global economy provides opportunities and challenges. Nations whose citizens are poor find it extremely difficult to leverage on opportunities within the global economic space. It is the citizens of organized, disciplined and educated nations that take advantage of opportunities offered by the global economy. These are nations whose citizens are regarded as “winners” with the highest standard of living in the twenty-first century. How has this group of nations achieved the status? It is through sustainable people-focused economic policies with the objective of reducing poverty. A nation with majority of its people impoverished cannot be categorized as a rich nation. Indeed, a poor nation cannot compete in a knowledge-based economy.
Nigeria in 2014 was rated by the World Bank as “one of the top 5 countries that have the largest number of the poor. Nigeria was third on the poverty index while India ranked number one with 33 percent of the world’s poor. China is ranked second with 13 percent of the world’s poor followed by Nigeria where 7 percent of the world poor live”. Nigeria equally has the third highest misery index below Venezuela and Iran. Experts say that high inflation rate (9.2 percent), unemployment rate (24.0 percent), prime lending rate (20.0 percent) and real per-capita GDP growth (4.0 percent) are major contributors to Nigeria’s misery index. A country such as Nigeria, with about 70 percent of its people impoverished, cannot compete with countries such as Korea, Hong Kong and Singapore. These are countries which use scarce resources wisely to maintain highest standards of living, adapt to rapid technological changes and have displayed good governance over time.
Crude oil is not used as a measure of a nation’s competitiveness in the global economy. This is why some technology policy experts say that “there is limit to wealth generated by sale of crude oil without science and technology”. A nation’s performance in a global competitive landscape is assessed by the World Economic Forum based on 8 pillars, namely, institutions, infrastructure, macroeconomic environment, health and primary education. Others are goods market efficiency, labour market efficiency, financial market development, technological readiness and market size. The others are business sophistication and innovation (see reports.weforum.org).
Regarding Nigeria, the country’s performance on the global competitiveness landscape is highly discouraging. Nigeria ranked 127th out of 144 countries that were assessed in 2014/2015 in the competitiveness ranking by the WEF, while Singapore was in 2nd position and Hong Kong and Korea occupied the 7th and 26th positions, respectively. South Africa was 56th, Rwanda was 62nd, while Morocco and Botswana took 72nd and 74th positions, respectively. Nigeria is in the same category with countries like the Gambia, Libya, Mali and Pakistan that ranked 125th, 126th, 128th, and 129th, respectively.
A glance at Nigeria’s competitiveness profile shows that the country performed satisfactorily in market size where the nation ranked 33rd out 144 countries. This is because of her population of about 170 million. The country was also adjudged 40th and 67th in labour market efficiency and financial market development, respectively. In institutions, infrastructure and health and primary education, the country came 129th, 134th and 143rd, respectively. Most Nigerians are aware that Nigeria is one of the few countries with weak institutions of governance, while the country suffers serious deficit in terms of infrastructure.
In this column, it was captured in the article titled “Economic diversification – inevitable but pricy” that “Nigeria has an infrastructure gap worth about US$300 billion, while the sum of US$15 billion will be required annually to bring the infrastructure to a reasonable level.” With respect to health and primary education, Nigeria’s performance is below par as it was ranked 143rd out 144 countries. It was not an error that none of Nigeria’s tertiary institutions was rated as among the best in Africa. These are some of the reasons why Nigeria has been categorized as a “low human development” country by the UNDP’s Human Development Report of 2014. There is this popular maxim that “health is wealth”, but when most citizens do not have access to basic health-care facilities, then the people cannot compete.
In a global economy that is knowledge-based, Nigeria must as a matter of priority improve the quality of education and recover its rating in technology readiness where it came 104th in the world. Good governance laced with transparency, accountability and rule of law is very key to achieving an excellent competitive performance in a globalized world. Government must collaborate with the private sector, empower the people through people-focused policies, diversify the nation’s economy and encourage science and technology as a way of life. Like all economic problems, choices cannot be avoided. That is why I align myself with the Nigerian Economic Summit Group in its 2015 summit, that in order to achieve competitiveness, inclusive growth and sustainability, tough choices are to be made by governments at state and federal levels at a time when the price of crude oil is plummeting in the international market.
MA Johnson
