Africa: Northern Region Leads in Competitiveness Index
By Eric Sande
North Africa region emerged tops in Africa in the just released Global Competitiveness Reports. It occupies the upper half of the rankings, led by Tunisia (32nd), with most Gulf States continuing their upward trend of recent years. In sub-Saharan Africa, South Africa (54th) and Mauritius (55th) feature in the top half of the rankings, followed by second-tier best regional performers Namibia (74th), Botswana (76th) and Rwanda (80th).
Africa’s assessment of East Africa’s largest economy indicates that Kenya went down in ranking eight places in this year’s Global Competitiveness Index pinioned by burdensome business regulations and diversion of public funds, high crime rates and theft.
Still, at number 106, Kenya remains as the most competitive economy in the world, defying weaknesses in its governance institutions to score high marks on innovation, financial services and business sophistication , signalling the positive role that the private sector continues to play in the economy.
“We could see a significant rise in Kenya’s future competitiveness if the issues of governance are dealt with,” Dr Jennifer Blanke, the chief economist of the World Economic Reform said at a briefing in Nairobi that brought together top government officials and the private sector.
“Policy-makers are struggling with ways of managing the present economic challenges while preparing their economies to perform well in a future economic landscape characterized by uncertainty and shifting balances,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. “In such a global economic environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.”
“Amid concerns about the outlook for the global economy, policy-makers must not lose sight of long-term competitiveness fundamentals amid short-term challenges. For economies to remain competitive, they must ensure that they have in place those factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place.” Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, and co-author of the report, added.
World Economic Forum by Sala-i-Martin and introduced in 2004 developed The Global Competitiveness Report’s competitiveness ranking which is based on the Global Competitiveness Index (GCI). The index, which measures a country’s competitiveness based on 12 benchmarks, including effectiveness of public institutions, basic infrastructure, macroeconomic and financial market development, has been expanded from last year’s 133 countries to cover 139 economies that account for 98 per cent of the world’s annual output or GDP.
The rankings are calculated from both publicly available data and the Executive Opinion Survey, comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the study. This year, over 13,500 business leaders were polled in 139 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.
The report contains an extensive data section with a detailed profile for each of the 139 economies featured in the study, providing a comprehensive summary of the overall position in the rankings, as well as data tables with global rankings for over 110 indicators.
This year’s report also features discussions on selected regions and topics. These include an analysis of the competitiveness of the European Union countries (guest-authored by European Commissioner Joachim Almunia); a review of Latin America’s infrastructure challenges, with a special focus on Brazil; a timely discussion on the relationship between macroeconomic stability and longer-term competitiveness; and the results of the EU Joint Research Centre’s analysis of the GCI, highlighting the statistical robustness and soundness of the index.