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Nigeria ranks low in Mara Group’s global entrepreneurship index

28 Nov 2016
Financial Nigeria

Summary

Nigeria ranks 70th out of a group of 85 countries, globally, and 13th out a group of 25 African countries.

Ashish J. Thakkar, Founder, Mara Group & Mara Foundation

The Mara Foundation and Optimum Research released their maiden global entrepreneurship index today, showing that Nigeria ranks 70th out of a group of 85 countries. The index – called the Ashish J. Thakkar Global Entrepreneurship Index – also ranked Nigeria 13th out a group of 25 African countries.

Nigeria’s poor ranking is due to the country’s underperformance against a set of five criteria that constitute the global entrepreneurship index. These criteria are finance (access to credit, tax rate, competitiveness, etc); entrepreneurial environment (inequality, opportunities for entrepreneurs, openness to new technology); education (literacy rate, gender balance, quality of education), infrastructure (electricity, access to Internet, urbanization, smartphone penetration, etc); and policy (ease of starting a business, labour market flexibility, public sector performance, etc).

Namibia is the highest ranking African country although the country ranks 42nd on the global index. Other top ranking African countries are Rwanda (43rd), Botswana (44th), South Africa (46th), Zambia (55th), and Morocco (56th). The index providers said Namibia and Botswana received a higher ranking because they are stronger on the education pillar given their comparatively higher levels of literacy and quality of education. Rwanda scored highly on the policy and finance pillars driven by government initiatives to increase the ease of doing business. Zambia scored particularly well on the finance pillar due mainly to the availability of credit and a low total tax rate.

“With young and growing populations, rapid urbanisation, and improving economic and policy conditions, many African countries are primed to become centres of entrepreneurship,” the index report said. “However, Africa is not yet meeting its entrepreneurial potential. Significant challenges exist in terms of political stability, underdeveloped infrastructure, poor education and under-diversified economies.”

Singapore was ranked as the best environment for entrepreneurs in the world given the country’s strong policy framework, modern infrastructure, and supportive financial environment. Other top ranking countries are New Zealand (2nd), Denmark (3rd), Canada (4th), and United Kingdom (5th).

The index report urged countries to ensure that entrepreneurship succeeds in their respective environments. On policy, the report recommended that countries should be committed to open markets, rule of law, labour market flexibility, and improving ease in registering businesses. Infrastructure can be improved by expanding mobile phone penetration, providing electricity and transport networks, and supporting business apprenticeship programmes.

As for education, government were urged to improve literacy rates, invest in business schools, and support tech-related learning programmes amongst students. To boost the entrepreneurial environment, the report advised governments to encourage trade fairs, open up public procurement to SMEs, develop entrepreneurship as a career path, and celebrate entrepreneurial achievements.

The report posited that governments can create a supportive finance environment by providing start-up loans for young entrepreneurs, creating a simplified tax system for SMEs, easing requirements for accessing primary and secondary capital markets, and ensuring an open, competitive market environment devoid of monopolistic businesses.

“Through the work of Mara Group over the past 20 years, I have come to recognise the immense contribution that entrepreneurs make to economies and societies around the world – particularly in relation to job creation,” said Ashish J. Thakkar, Founder, Mara Group & Mara Foundation. “In recent years, however, it has become more and more apparent that governments and the private sector are simply not doing enough to support entrepreneurs in their endeavours. With the creation of this Index, we hope to provide some solid policy recommendations that will help guide discussions and improve entrepreneurial environments globally.”


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