Articles, Essays

Pest Analysis: Nigeria, China, US And UAE

No two countries in the world are exactly alike. The differences are based on various demographics, legal systems, economic/political frameworks, etc. A tool enabling comprehensive analysis of countries’ differences is PEST. The PEST framework analyzes the ‘Political, Economic, Social and Technological’ facets of a country.


Four different countries were chosen based on their differing systems of government and economic frameworks which are summarized in the following PEST analysis:

3.1 Nigeria


According to Khan S.A (1999), CIA (2010) and EDC Economics (2009);

Democracy with intermittent military rule in periods with elections at all government tiers.

Suffers entrenched/institutionalized corruption as well as polarization between the North and South for positions within government.

Unrest in the oil producing region of the country has led to instability and safety concerns

Favourable fiscal regime with CIT of 30% except for oil sector which has a different regime.

NEEDS policy aims to attract investment however, strategic sectors still neglected.


According to CIA (2010);

Oil dependent economy with oil revenue as 80% of total revenues and 95% of export earnings causing Dutch disease – a steady decline in other sectors.

GDP increased to 5% to $357.2 billion in 2009 making GDP per capita about $2400; one of the lowest worldwide culminating in 70% of the population below the poverty line.

Debt/GDP is 18% inflation rate of 11.5%.


According to CIA (2010);

Young population of 152 million. 250 ethnic groups distributed religion wise as 50% Muslim, 40% Christian and 10% traditionalists.

High interest in new foreign technologies (about 70 mobile million users in 2008)

Influenced by foreign trends and fads which determine the local scene.


Despite research institutions, R&D is still sub-par. (Federal Government Public Service Rules (2008)

Low automation due to -1.8% growths in industrialization.

3.2 China


According to CIA (2010);

Communist state headed by a President who is elected by the legislature which is elected by lower level legislatures.

The effects of China’s civil war have given rise to the contention of Taiwan’s sovereignty.

Policies centre on socialist ideals with state ownership and soviet codes.


According to CIA (2010);

Experienced rapid growth after opening up economy by “liberalization of prices, fiscal decentralization” and foreign trade.

GDP of $8.8 trillion but a low per capita GDP of $6,600.

China experienced growth of 8.7% in 2009.

It has poverty rate of 2.8% and low income disparity.

China’s debt/GDP is18.2% and had deflation of -0.8%.


According to CIA (2010) and Kwintessential (2010);

Ageing population of 1.3 billion.

Religion distribution dominated by Taoism/Buddhism while Christianity/Islam account for 4-6%.

The ethnic make-up is 91.5% Han Chinese and 8.5% various minorities.

The languages are Mandarin and Cantonese.

Interactions heavily influenced by Confucianism which stresses obligations and collectivism. Chinese are very in-tune with and influenced by Chinese culture.


Very industrialized however relatively poor in energy efficiency as power generation uses 40% more energy than required. (Itamar Meideros, 2006)

Technology/Innovation is dominant in China with 30% expenditure increase. Strong emphasis and R&D in environment/climate change, biotechnology, nanoscience, space science etc. (Hepeng Jia, 2010)

3.3 United States of America


According to CIA (2010);

Federal government steeped in democratic practice with elections held every four years.

High political stability due to defined succession procedures. However, anti-west sentiment is directed largely towards the US and has seen it become susceptible to terrorist acts which prompting protective warfare outside its shores.

Relatively high tax rates though softer fiscal regime (lower tax/higher spending) has risen out of the economic crises.


According to CIA (2010);

“The US has the most advanced economy in the world” with a GDP of $14 trillion and per capita GDP of $46,000 and a 2.9% decline caused by the recession.

With a budget deficit of about $1.5 trillion, it is no wonder that the debt/GDP 52%. Inflation rate of -0.7% brought about by tight credit and decreased purchasing power.


Aging population of 310 million broken down ethnically as white 79.96%, black 12.85%, and Asian 4.43% and religiously as 78% Christian, 12% unaffiliated and others. (CIA, 2010)

Cultural mix of domestic innovation and European import and is divided across liberal and conservative and the in-betweens. The key values are military and scientific competitiveness, meritocracy, defined political structures, risk taking and free expression (Everyculture, 2010).


The US is considered the most technologically powerful and industrialized nation in the world. Industries include power generation, computer systems, auto, automated, aviation, steel digital etc. (Naomi R. and Kenneth L., 2007)

Furthermore, the list of US inventors and patents is reflective of the prevalence of innovation. From 1964 to 2009, the US has granted 4,548,072 patents on utility innovations alone. (uspto, 2009)

Strong R&D culture with spending as high as 3% of GDP. The government is responsible for about 27% while industries are 69%. (Aps, 2000)

3.4 United Arab Emirates


According to CIA (2010);

Loose federal state with seven member emirates enjoying relative autonomy and an autocratic government.

Due to its inherent monarchy, stability is ensured as succession is defined while the president (appointed by 7 member monarchical council) selects all cabinet members including Prime Minister. Government policies are geared towards growth a move from the oil based economy through diversification.

Foreign investment is also encouraged through the designation of tax free zones and lenient business laws.


According to CIA (2010);

High diversification from oil as only 25% of GDP output is oil based. GDP and per capita GDP are $201.4 billion and $42,000 respectively.

The global financial crisis as well as reduced international credit led to a 4% fall in GDP. Debt/GDP is 47.2% and inflation is 1.5%.


According to CIA (2010);

The population of 5 million is 81% non nationals: 19% Emarati, 23% Arab/Iranian, 50% South-Asian, and 8% others. Religion is 96% Muslim and 4% others. Official language is Arabic.

“The country is a unique blend of traditional values merged with a modern, advanced society.” UAE is very conservative arab/muslim society with activities like social drinking, inappropriate dressing, and gender mingling frowned upon. However, with the migration of expatriates, such behaviors have become more common in urban areas.

Despite reservations, there is a taste for foreign goods and services.


According to CIA (2010);

Strong communication and technology infrastructure which has positioned UAE as a leading industrial centre in the Middle-East. Prevalence of Dubai Internet City for e-Commerce and heavy investments in IT infrastructure.

Government priority is to promote innovation and automation for higher industrialization making UAE not only a leader in the Middle-East but competitive at a larger scale.


A combination of political/economic systems culminates in differing nations. In this instance, the major difference in the comparative analysis of the four aforementioned countries lies in the economic state of each nation with different figures and composition for macroeconomic indicators.

Social environments also depict differing values and demographics for all countries. Political systems also range from autocratic to democratic with communist in between. Understanding the nuances of countries is a great facilitator of international trade and relations; two factors that nations need to engage in to prosper.

Related Post