Nigeria has been ranked 158 globally out of 181 countries on macroeconomic stability, institutional strength, openness and human capital, dropping five places from last year, and now behind 28 other African countries in 2018.
Mauritius, Botswana and Rwanda are the topmost in Africa in terms of future growth promise on account of the measured indicators, according to a newly released report by audit and financial advisory firm, KPMG, titled ‘Growth Promise 2018 released.’
Although, Rwanda, Mauritius and Botswana have a higher overall GPI ranking than Nigeria, they are behind on macroeconomic stability, which shows government deficit, government debt ranking with Nigeria 7.45.
Although, the report does not reveal the details about Nigeria, it shows that the country’s macroeconomic stability is the third best in the world and ahead of the top ranked African countries, Egypt, Morocco, Cape Verde, Ghana, Algeria, and Tunisia.
Nigeria’s 2018 federal budget tagged a ‘Budget of consolidation’ appears to be a response to the fact that Nigeria had just exited economic recession, hence, the need to consolidate on the recovery and spur economic growth to previously attained levels.
The proposed expenditure is in the sum of N8.612 trillion, which is a 16 percent increase over the 2017 figure, while the retained revenue is N6.607 trillion being 30 percent above the 2017 estimates. The deficit is in the sum of N2.005 trillion.
The deficit is 23 percent of the overall expenditure and 30 percent of the retained revenue is 1.77 percent of the Gross Domestic Product which is in tandem with the demands of the Fiscal Responsibility Act.
The debt service of N2.014 trillion, which is 23 percent of the overall 2018 vote when added to the sinking fund of N220 billion (3% of the overall vote) for the retirement of maturing bonds add up to 26 percent of the overall vote. This is above one quarter of the expenditure.
On human development, Nigeria 1.27 ranked the worst only behind seven other globally while openness which refers to the stock of foreign direct investment and total trade measuring trade performance Nigeria again ranked lowest with 0.29 only ahead of Pakistan.
Other metrics used are infrastructure, which refers to availability of financial services, the quality of transport and technology readiness, Nigeria ranked below 20 other Africa countries scoring 2.24 points.
Rwanda is put ahead of most other African countries mainly because of its institutional strength that refers to the quality of regulation, judicial independence, transparency of government policymaking, control of corruption and business and property rights.
“Unpicking trends in the sub-indicators suggests that the real strides have been made via improvements in infrastructure, and in particular in tech-readiness,” said the report that uses Growth Promise Index (GPI) to rank countries with sub-indicators that also include human resources aspects such as education and life expectancy.
But it says that, across the globe, GPI scoring in macroeconomic stability has fallen due to what it called the Great Recession (2008-todate) resulting from the financial meltdown in the US and its turbulent aftermath as well as the decline in commodity prices.
“Most regions fared poorly in this category, cancelling out possible gains in areas such as human development and infrastructure,” KPMG noted.
The KPMG report however notes that Nigeria, including other countries, still have a chance to improve on their finances in 2018.