WEF's Global Competitive Index: Ghana Drops In Ranking

Ghana has dropped two ranks in the latest World Economic Forum’s Global Competitive Index (GC1) 4.0 from 104th in 2017 to 106th in 2018.

The report put together by the World Economic Forum assesses the microeconomic and macroeconomic foundations of national competitiveness, which is defined as the set of institutions, policies, and factors that determine the level of productivity of a country.

It assesses the competitiveness landscape of 140 economies.

Assessing competitiveness
“The Global Competitiveness (GCI) 4.0 assesses competitiveness through the factors that determine an economy’s level of productivity widely considered as the most important determinant of long-term growth and income.

The causal link from productivity to growth and income is firmly grounded in theory and has been established empirically. Beyond income, competitiveness is generally associated with better socioeconomic outcomes, including life satisfaction.”

Benchmarks
The GCI 4.0 framework is organized into 12 main drivers of productivity, or ‘pillars’ under 4 broad components, benchmarks, parameters or measures which are enabling environment, human capital, markets and innovation ecosystem.

Pillars
The 12 main drivers of productivity or pillars comprise; Institutions, Infrastructure, ICT Adoption and Macroeconomic Stability which fall under an enabling environment,

Health and Skills which fall under Human Capital,
Product market, Labour market, Financial System and Market Size which fall under Markets,

Business dynamism and Innovation capability which fall under the Innovation ecosystem component.

The 12 pillars have also a number of indicators under each totalling 98.

Ghana’s performance (pillars)
Ghana ranked 106th out of 140 countries with an overall score of 51 out of a 100. Ghana’s specific performance for pillars such as infrastructure and HEALTH saw a mixed picture but overall an arguably low position.

The country ranked 116th out of 140 countries and 112nd out of 140 countries for infrastructure and health respectively.

The indicators under infrastructure include quality of roads which saw a drop in Ghana’s score from the 2017 report and under health saw an increase in the score for life expectancy but overall rank was at 111 out of 140 countries.

With the financial system pillar, Ghana experienced a general increase in scores of some indicators from 2017 such as financing of SMEs and venture capital availability but these scores on a scale of 0-100 were low.

Non-performing loans still under the financial system also saw a drop in its score as an indicator from last year’s report. Under the financial system pillar, the country ranked 112th out of 140countries. An interesting development here is a pillar such as macroeconomic stability which saw our ranking at 132 out of 140 countries.

The main indicators used were debt dynamics and inflation. Finally, under innovation capability the country ranked 83rd out of 140 countries with a score of 38 out of a 100.

Indicators such as quality of research institutions saw a drop in their score from last 2017 but other areas such as scientific publications and diversity of workforce saw an increase in their scores from last year.

Sub-Saharan Africa
Ghana ranked 7th in the region and a score of 51.3 out if a 100 and fell behind Mauritius, South Africa, Seychelles, Botswana, Kenya and Namibia which ranked 1st, 2nd, 3rd 4th, 5th and 6threspectively with scores of 63.7, 60.8, 58.5, 54.5, 53.7 and 52.7 respectively.

Ghana performed better than its neighbours such as Cote D’Ivoire and Nigeria which ranked, globally, 114th and 115th respectively and 11thand 12th respectively in the sub-region.

General findings
The latest report incorporates a number of ‘new concepts’ and ‘data gathering efforts’ to ensure a more encompassing index that can adequately describe competitiveness if the 1r40 economies.

The results of the GCI 4.0 reveal the sobering conclusion that most economies are far from the competitiveness “frontier”—the aggregate ideal across all factors of competitiveness.

In fact, the global average score of 60 suggests that many economies have yet to implement the measures that would enhance their long-term growth and resilience and broaden opportunities for their populations.

In addition, we find that countries have a mixed performance across the twelve pillars of the index and that long-standing developmental issues—such as the lack of well-functioning institutions— continue to be a source of friction for competitiveness.

Yet there are bright spots—in the form of economies that outperform their peers and present valuable case studies for learning more about methods to implement the factors of competitiveness.