Utilizing the Blended Ranking Model for construction consultancy practices in Africa.

30 November 2023
Written by Mckayla Gunter & Zama Nqulunga
Written by Mckayla Gunter & Zama Nqulunga

introduction

The Blended Ranking Model aims to provide an overall assessment of African countries based on numerous factors like GDP, population, GDP per capita, infrastructure, political environment, and ease of doing business, with a key focus on its applicability for construction consultancy. The model provides a comprehensive view of each country’s economic performance, development potential, and business environment. Our blog aims to discuss each factor and its relevance in the ranking model as applicable to each country.

  1. GDP (Gross Domestic Product): GDP is a measure of the total economic output of a country. It reflects the size and strength of an economy. Considering GDP in the ranking model helps identify countries with larger economies that may offer more opportunities for investment and business growth.
  2. Population: Population plays a significant role in determining a country’s market size and potential consumer base. It indicates the scale of economic activity and can influence market demand and business opportunities. Larger populations can offer greater market potential, although factors such as income distribution and purchasing power should also be considered.
  3. GDP per capita: GDP per capita provides an indication of the average economic well-being and living standards within a country. It helps assess individuals’ purchasing power and disposable income, which can be important for businesses targeting specific consumer segments or high-value markets.
  4. Infrastructure: Infrastructure is a crucial factor for economic development and business operations. Countries with well-developed infrastructure, including transportation, energy, telecommunications, and logistics networks, tend to attract more investment and support efficient business operations. Adequate infrastructure facilitates trade, connectivity, and overall economic growth.
  5. Political environment: A country’s political stability, governance, and regulatory environment impact business operations and investor confidence. A stable political environment with transparent policies, effective governance, and a favourable legal framework promotes business growth and attracts foreign investment. Assessing the political environment helps identify countries with conducive conditions for doing business.
  6. Ease of doing business: The ease of doing business index evaluates factors such as business regulations, contract enforcement, property rights, and administrative efficiency. It measures the ease with which businesses can be established, operated, and scaled up in a particular country. A favourable business environment promotes entrepreneurship, innovation, and economic growth.

In the Blended Ranking Model, each factor can be assigned a weight based on its relative importance. These may vary depending on the specific objectives of the model to assess its possible influence on the construction consultancy industry. The weights reflect the significance of each factor in contributing to the overall assessment of a country’s economic performance and business environment. By aggregating the scores across these factors, the model generates a blended ranking that provides a holistic perspective on the countries in Africa.
It is important to note that while the Blended Ranking Model can provide a useful comparative analysis, it should not be the sole basis for decision-making. Additional factors, such as sector specific considerations, market dynamics, and cultural aspects, may also need to be considered when making investment or business decisions in specific African countries.
Developing a comprehensive blended ranking model for all African countries requires extensive data analysis and consideration of multiple factors. Below follows an outline of the process and factors to consider when creating such a model.

  1. Define the Objectives: Clearly define the objectives of your ranking model. Determine the specific dimensions or aspects you want to assess for each country in Africa.
  2. Select Indicators: Identify a set of indicators that capture the different dimensions of the ranking model. These indicators should be measurable, comparable across countries, and relevant to your objectives.
  3. Data Collection: Gather reliable and up-to-date data for each selected indicator across all African countries.
  4. Data Normalization: Normalize the data to ensure fair comparisons. Depending on the indicators, you may need to scale or standardize the data to a common range or index.
  5. Weight Assignment: Assign weights to each indicator based on their relative importance to the overall ranking. The weighting can be subjective or determined through stakeholder consultation or data-driven approaches.
  6. Scoring and Ranking: Calculate scores for each country based on the normalized data and assigned weights. Aggregate the scores across all indicators to obtain an overall score for each country. Subsequently, rank the countries based on their overall scores.
  7. Sensitivity Analysis: Perform sensitivity analysis to assess the robustness of the rankings. Evaluate how the rankings change when varying the weights or indicators and consider the impact of different scenarios.
  8. Validation and Refinement: Validate the ranking model by comparing it with existing rankings, expert opinions, or real-world data. Refine the model as necessary based on the insights gained from the validation process.
  9. Communication and Visualization: Present the rankings in a clear and accessible manner. Use visualizations such as charts, graphs, or maps to facilitate understanding and interpretation of the results.

It is important to note that creating a comprehensive ranking model requires careful consideration of indicators, data quality, weights, and the subjective nature of the model. Moreover, regular updates and reviews should be conducted to keep the ranking model relevant and reflective of the changing dynamics in African countries.

statistics/data

GDP

Kamer, 2022, African countries with the highest Gross Domestic Product (GDP) in 2021:

POPULATION
The AfDB Statistics Pocketbook 2023 (June 2023):

GDP Per Capita

Kamer, 2022, African countries with the highest Gross Domestic Product (GDP) per capita in 2022:

Infrastructure

The African Development Bank created the Africa Infrastructure Development Index (AIDI) which serves several key objectives. These include:

  • To monitor and evaluate status and progress infrastructure development across the continent.
  • To assist in resource allocation within the framework of ADF replenishment.
  • To contribute to policy dialogue within the bank and between other development organization

The AIDI consists of:

  1. ADIE Index
  2. Transport composite Index
  3. Electricity composite Index
  4. ICT composite Index
  5. WSS composite Index

Political Environment (PE)

Construction of the political stability index (The Global Economy).

The index is a composite measure as it is based on several other indexes from multiple sources including the Economist Intelligence Unit, the World Economic Forum, and the Political Risk Services, among others. The underlying indexes reflect the likelihood of a disorderly transfer of government power, armed conflict, violent demonstrations, social unrest, international tensions, terrorism, as well as ethnic, religious, or regional conflicts. The methodology of the overall index consistent, so that the numbers are comparable over time. You may also want to have a look at the following indicators: rule of law, political rights, and corruption perceptions.

Ease of Doing Business (EDB)

Ease of doing business index ranks economies from 1 to 190, with first place being the best. The ranking of economies is determined by sorting the aggregate ease of doing business scores. A high ranking means that the regulatory environment is conducive to business operations.

methodology

The data seen above for GDP, Population, GDP per Capita, Infrastructure, Political Environment, and Ease of doing business was listed and points were given to each country according to their indexes.
The points were then weighted according to the below.

  1. Population – 15%
  2. GDP – 15%
  3. GDP per Capita – 5%
  4. Infrastructure – 30%
  5. Political Environment – 15%
  6. Ease of doing business – 20%

results

Consequently the following results were obtained:

The above map and list shows countries in Africa which are most favourable to work in as construction consultants based on the Blended Ranking Model developed.

sensitivity analysis

A sensitivity analysis was performed by changing the weightings to the following:

  1. GDP – 20%
  2. Population – 5%
  3. GDP per Capita – 5%
  4. Infrastructure – 35%
  5. Political Environment – 15%
  6. Ease of doing business – 20%

The top 5 countries remained the same in the same order, with the top 10 countries being:

conclusion

A blended ranking model was created to provide an overall assessment of African countries based on numerous factors such as GDP, population, GDP per capita, infrastructure, political environment, and ease of doing business – with an objective of testing the favourability of the countries to construction consultancy. The Blended Ranking Model shown could provide a useful comparative analysis, but the findings are to be validated with existing rankings, expert opinions, or real-world data. Additionally. factors such as sector-specific considerations, market dynamics, and cultural aspects, will also need to be considered when making business decisions in specific African countries.

references

AfDB, 2023. The AfDB Statistics Pocketbook 2023 (June 2023). Volume 23.
Tramplin, 2023. What is Gross Domestic Product (GDP)? Finance Strategists. https://www.financestrategists.com/wealth-management/macroeconomics/gross-domestic-product/?gclid=CjwKCAjwp6CkBhB_EiwAlQVyxTI60UwGLgV391zNvLpEhQyqJlgPfRfE-IIr6w8RHix_qZ73uyLBLRoC5L4QAvD_BwE [Accessed: 13 June 2023].
Kamer, 2022a. African countries with the highest Gross Domestic Product (GDP) in 2021. https://www.financestrategists.com/wealth-management/macroeconomics/gross-domestic-product/?gclid=CjwKCAjwp6CkBhB_EiwAlQVyxTI60UwGLgV391zNvLpEhQyqJlgPfRfE-IIr6w8RHix_qZ73uyLBLRoC5L4QAvD_BwE. [Accessed: 13 June 2023].
Kamer, 2022b. African countries with the highest Gross Domestic Product (GDP) per capita in 2022. https://www.statista.com/statistics/1121014/gdp-per-capita-of-african-countries/. [Accessed: 13 June 2023].
Statista Research Department, 2023. Africa infrastructure development index in 2021, by country. https://www.statista.com/statistics/1198287/africa-infrastructure-development-index-by-country/. [Accessed: 13 June 2023].
The Global Economy, Political stability – Country Rankings. https://www.theglobaleconomy.com/rankings/wb_political_stability/Africa/#:~:text=Political%20stability%20%2D%20Country%20rankings&text=The%20average%20for%202021%20based,available%20from%201996%20to%202021. [Accessed: 13 June 2023].
The World Bank. Ease of Doing Business Rank. https://data.worldbank.org/indicator/IC.BUS.EASE.XQ?end=2019&locations=ZG&most_recent_value_desc=false&start=2019&view=bar. [Accessed: 19 June 2023].
Kazaz, A., Talat Birgonul, M., Acikara, T., Er, B. 2016. Evaluation of Consulting Firms Selection in Construction Projects by Using Fuzzy Logic. Journal of Construction Engineering and Management, Vol. 111 (3), pp. 231-243.
A.Watt, Resource Planning.

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