<<Print>>Ghana’s desire to turn around the dwindling fortunes of the country has been dealt a further negative blow as the country slipped eight places in the latest Global Competiveness Report. Ghana went down from 111 in 2014 to 119 in 2015, out of 140 countries assessed in the 2015 report. Ghana has gone down from the 59th position with a score of 3.82 on the ranking in 2004 to 119 with a score of 3.6 this year, representing a drop of a whopping 60 places within 11 years.
This means that Ghana will not feature on the priority list of big-time investors to attract the much-needed foreign direct investment to boost economic growth to create the needed jobs for the teeming unemployed youth. On the African continent, Ghana was ranked 17 out of the 32 countries, as Mauritius remains the region’s most competitive economy (46th), closely followed by South Africa (49th) and Rwanda (58th). Côte d’Ivoire (91st) and Ethiopia (109th) are this year’s largest improvers in the region overall. Most problematic factors for doing business in Ghana According to the report, access to financing tops the most problematic factors for doing business in Ghana with a score of 19.2; inflation - 12.9; foreign currency regulations - 12.4; tax rates - 10.5; corruption - 9.9; inadequate supply of infrastructure - 9.9; inefficient government bureaucracy - 5.9; and policy instability - 4.7. The rest are complexity of tax regulations - 3.8; poor work ethic in labour force -3.6; inadequately educated workforce - 2.4; crime and theft - 2.0; insufficient capacity to innovate - 2.0; restrictive labour regulations - 0.4; government instability/coups - 0.3; and poor public health - 0.3 The massive drop only goes to confirm that Ghana consistently failed to address challenges of weak institutions, poor infrastructure, weak macroeconomic environment, poor healthcare and primary education, weaknesses in higher education and training, deficits in goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation. In the 2015 report, Ghana’s performance out of 140 countries surveyed, according to the 12 pillars used in the ranking, are institutions - 72; Infrastructure - 72; Macroeconomic environment - 136; Health and primary education - 118; Higher education and training - 104; Goods market efficiency - 87; Labour market efficiency - 94; Financial market development - 76; Technological readiness – 96; and Market size - 74. Businesses have been under severe pressure from the power crisis, cedi depreciation, high cost of credit and difficulty in getting bank credit, among others.
Ghana’s peers lend at rates below 20% while lending rates in Ghana exceed 30%. Based on the Global Index (GI) score of 1 to 7, Ghana scored 3.6. Countries that are closer the 7 are considered better. Survey questions asked for responses on a scale of 1 to 7, where an answer of 1 corresponds to the lowest possible score and an answer of 7 corresponds to the highest possible score. For each survey question, individual responses are aggregated at country level in order to produce country scores. The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum, together with its network of Partner Institutes (leading research institutes and business organisations). SECTORAL BREAKDOWN OF GHANA’S RANKING Infrastructure The quality of overall infrastructure was ranked 120; quality of roads, 101; quality of railroad infrastructure, 86; quality of port infrastructure, 94; quality of air transport infrastructure, 88; available airline seat km/week, millions* ranked 78; quality of electricity supply placed 127; mobile telephone subscriptions/100 population was 67 position while fixed-telephone lines/100 population ranked 123. Macroeconomic environment Under macroeconomic environment, government budget balance, % GDP* ranked 136, gross national savings, % GDP* was at 97 position, inflation, annual % change* placed 136, general government debt, % GDP* ranked 106 while country credit rating placed 95. Financial market development On financial market development, availability of financial services placed 98; affordability of financial services was 96th position; financing through local equity market came 53rd, ease of access to loans emerged 59th; venture capital availability ranked 81; soundness of banks - 106; regulation of securities exchanges placed 104; and legal rights index was at 24. Technological readiness When it comes to Ghana’s technological readiness, availability of latest technologies was at 121; firm-level technology absorption placed 95; FDI and technology transfer ranked 90; individuals using internet - 104; fixed-broadband internet subscriptions/100 population came 117; international internet bandwidth, kb/s per user - 125; and mobile-broadband subscriptions/100 population - 45. Market size In the category of market size, Ghana placed 74 for domestic market size index; 75 for foreign market size index; 74 for GDP (PPP$ billions); and 70 for exports as a percentage of GDP. Business sophistication In this area, local supplier quantity was at 92nd position; local supplier quality placed 103rd; state of cluster development - 76; Nature of competitive advantage - 68; Value chain breadth - 54; control of international distribution - 76; production process sophistication - 74; extent of marketing - 61; and willingness to delegate authority - 57. Innovation The breakdown of ranking for innovation are capacity for innovation – 56; quality of scientific research institutions - 77; company spending on Research and Development (R&D) - 44; University-industry collaboration in R&D - 77; government’s procurement of advanced tech products - 56; availability of scientists and engineers - 97 while PCT patents, applications/million population was 103. Institutions On performance of institutions, out of the 140 countries assessed, property rights ranked 72; intellectual property protection - 74; diversion of public funds - 72; public trust in politicians - 61; irregular payments and bribes - 109; Judicial independence - 49; favouritism in decisions of government officials - 77; wastefulness of government spending - 49; burden of government regulation - 67; efficiency of legal framework in settling disputes - 43; and efficiency of legal framework in challenging registration - 47. The rest are transparency of government policymaking - 87; business costs of terrorism - 101; business costs of crime and violence - 95; organised crime - 98; reliability of police services - 71; ethical behaviour of firms - 71; strength of auditing and reporting standards - 108; efficacy of corporate boards - 81; protection of minority shareholders’ interests - 68; and strength of investor protection - 55. Health and primary education In the areas of health and primary education, Malaria cases/100,000 population placed 66; business impact of malaria ranked 59; Tuberculosis cases/100,000 population was at 78th position; business impact of tuberculosis ranked 100; HIV prevalence, % adult population placed 115; business impact of HIV/AIDS ranked 90; Infant mortality, deaths/1,000 live births was 121th position; life expectancy, years* - 120; quality of primary education - 104; and primary education enrolment, net %* ranked 106. Higher education and training The ranking for higher education and training include secondary education enrolment, gross %* - 107; tertiary education enrolment, gross %* - 108; quality of the education system - 76; quality of math and science education - 72; quality of management schools - 48; internet access in schools - 105; availability of specialised training services - 72; and extent of staff training - 64. Goods market efficiency In the category of goods, market efficiency intensity of local competition placed 86; extent of market dominance - 59; effectiveness of anti-monopoly policy - 86; effect of taxation on incentives to invest - 53; total tax rate, % profits - 54; procedures to start a business - 93; number of days to start a business -79; agricultural policy costs - 97; prevalence of non-tariff barriers - 84; trade tariffs, % duty - 104; prevalence of foreign ownership - 66; business impact of rules on FDI - 84; burden of customs procedures - 93; Imports as a percentage of GDP - 68; degree of customer orientation - 86; as well as buyer sophistication - 92. Labour market efficiency In labour market efficiency, co-operation in labour-employer relations ranked 91; flexibility of wage determination - 128; hiring and firing practices - 59; redundancy costs, weeks of salary - 133; effect of taxation on incentives to work - 31; pay and productivity - 90; reliance on professional management - 51; country capacity to retain talent - 54; capacity to attract talent - 73; women in labour force, ratio to men -10. The Global Competitiveness ranking is based on the Global Competitiveness Index (GCI), which was introduced by the World Economic Forum in 2004. Defining competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country, GCI scores are calculated by drawing together country-level data covering 12 categories – the pillars of competitiveness – that collectively make up a comprehensive picture of a country’s competitiveness.