ECONOMIC FREEDOM INDEX:NIGERIA RANKED 120 OUT OF 177 NATION

President Goodluck Jonathan

                                     

 Nigeria has been ranked 120 out of 177 countries, according to the latest scores from the 2013 Index of Economic Freedom, published annually by The Wall Street Journal and The Heritage Foundation.
According to the Index, after a slight improvement in her previous ranking, Nigeria obtained an overall mark of 55.1 points and slipped by 1.2 points from the 56.3 of 2012, and was ranked as mostly unfree in the economic freedom ranking. The sub-Saharan Africa’s overall level of economic freedom “remains weaker than that of any other,” the Index editors wrote.

Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on its aggregate score, each of 177 countries graded in the 2013 Index was classified as “free” (i.e., combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).

A majority of countries in the sub-Saharan region either fell into the category of “mostly unfree” or “repressed” categories. Indeed, 15 of the world’s 33 “repressed” economies are in sub-Saharan Africa, and 22 are in the next lowest, “mostly unfree” category.

According to the index, sub-Saharan Africa continues to lag far behind the five other regions of the world in overall economic freedom. “It is dead last in seven of 10 measures of economic freedom and collectively scores about 13 points behind average world scores in business freedom and more than 10 points behind in property rights and freedom from corruption.

“Nigeria continues to rank low in the Index of Economic Freedom because of the increasing role of government within the economy,” said the Director, Initiative for Public Policy Analysis, Mr. Thompson Ayodele.

“Government spending has increased. We have continued to spend unearned money. Government borrowing has also crowded out private borrowing in the economy while debts owed local contractors have ballooned. Ironically, government seems to think that more borrowing is the answer to our economic problem.

“The private sector, particularly small business, still remains engine of growth in the economy.  Since the beginning of this administration Nigeria has resorted to more borrowing while other loans are in the pipeline. We cannot borrow our ways to prosperity. Should we continue in this trend, Nigeria is surely on the road to Greece,” Ayodele said.

The world average score of 59.6 was only one-tenth of a point above the 2012 average. Since reaching a global peak in 2008, according to the Index, economic freedom has continued to stagnate. The overall trend for last year, however, was positive: Among the 177 countries ranked in the 2013 Index, scores improved for 91 countries and declined for 78.

In many countries, average government spending scores improved. Unfortunately, this was matched by a decline in regulatory efficiency, as a number of countries hiked minimum wages and tightened control of labour markets.

Mauritius remained in the top 10 in annual worldwide rankings - the only one of 48 sub-Saharan countries to do so. But while it is first for the region, its Index score declined slightly from last year. Second-place Botswana, however, moved from “moderately free” to “mostly free” by adding one full point to its score. At third place, Rwanda halted two consecutive years of progress by shaving eight-tenths of a point off its score.

Burkina Faso slipped to “mostly unfree.” Sào Tomè & Prìncipe and Ethiopia are now considered “repressed.” But several countries showed improvement, with Zimbabwe reporting the best increase by moving up 2.3 points to 28.6. Benin and Seychelles, meanwhile, both added almost two full points to their Index scores; Gabon added 1.4. Yet all three remain mired in the “mostly unfree” category, which shows how far the region has to go.