McKinsey Global Institute, a research arm of McKinsey and Company has ranked Nigeria and 10 other emerging countries among the non-outperforming economies.
NewsWireNGR recalls that few days ago, HSBC released a report on the country’s economic outlook, in the report titled Nigeria, Papering Over The Cracks, the bank stated that while higher oil prices had boosted Nigeria’s external position and provided a veneer of macro stability, the economy’s oil dependency and structural shortcomings are evident in a tepid pace of growth and fiscal fault.
In a 168-page report by the renowned institute, it examined the long-term economic track record of 71 developing economies and identified China and India as the leading outperformers.
According to the report
“Emerging economies have been a powerful engine of growth for the global economy during the past half century. Led by China and India, these economies accounted for almost two-thirds of the world’s GDP growth and more than half of new consumption over the past 15 years.”
The research which aims to identify outperforming countries that have experienced strong and sustained growth, identified other outperformers as Hong Kong, Indonesia, Malaysia, Singapore, South Korea and Thailand.
Nigeria in the Mix
Although, the report recognised that Nigeria experienced strong periods of growth between 1965 and 2016, the report noted that Nigeria did not make the cut because its growth was volatile and was followed by sharp downturns following the booms.
“Some other countries including Brazil and Nigeria, which have also experienced strong periods of growth, did not make the cut because their growth hAve been more volatile, with sharp downturns following booms.
“The third subgroup of middling performers, including Algeria, Angola, Argentina, Brazil, Iran, Kenya, Mexico, and Nigeria, have experienced volatile boom-and-bust growth that has not lifted them up the World Bank’s ladder of affluence.”
The report also named 18 countries that not only showed exceptional average economic performance, but also demonstrated consistency by exceeding the benchmark growth rate in at least three-fourths of the 50 and 20 years, respectively.
In the sub-Saharan region, only Ethiopia was named among the recent outperformers out of the 15 countries examined.
Need to diversify commodities
The report attributed the unimpressive performance in this region to poor infrastructure and lack of diversity in export.
“In general, infrastructure to other regions is poor and exports from countries in sub-Saharan Africa lack diversity. For example, more than 90 percent of goods exported from Nigeria and Angola are oil-related. Improving infrastructure and continuing to build out government effectiveness to attract foreign investment remain important opportunities for the region.”
With the exception of Nigeria, the research also ranked other resource-driven economies as outperforming countries because of their savings culture and huge investments.
“Elevated savings and investment rates have given these economies an average capital contribution to annual GDP growth of 5.8 percent, compared with Nigeria’s 2.8 percent and Russia’s one per cent.”
McKinsey Global Institute helps leaders in the commercial, public, and social sectors develop a deeper understanding of the evolution of the global economy and to provide a fact base that contributes to decision making on critical management and policy issues.