Much to celebrate as key African nations makes big climbs reverse declines in latest WEF Competitiveness Index and Mauritius tops the list for the Sub-Sahara region.
Mauritius remains sub-Saharan Africa’s most competitive economy, ahead of South Africa in 49th. It boasts the region’s best infrastructure, most healthy and educated workforce, and most efficient goods market.
The most comprehensive annual assessment of national competitiveness worldwide has been released. The World Economic Forum’s Global Competitiveness Report 2015-2016 assesses the competitiveness landscape of 140 economies, providing insight into the drivers of their productivity and prosperity.
This year there is a lot for some African nations to celebrate.
Although the continent’s star performer, Mauritius, experienced a halt in its decade-long improvement and fell seven places to 46th, there were plenty of other African countries hot on its heels with some impressive climbs due to improvements.
The decade-long improvement of Mauritius comes to a halt this year with a fall of seven places to 46th. Small improvements in the basic factors for competitiveness— institutions (34th, up one), infrastructure (37th, up five), and higher education (52, up two) are offset by declines in the efficiency of labor (down by five places to 57th) and the financial market (down by eight places to 34th).
Despite this, Mauritius remains sub-Saharan Africa’s most competitive economy, ahead of South Africa in 49th. It boasts the region’s best infrastructure (37th), most healthy and educated workforce (63rd on health and 52nd in higher education and training), and most efficient goods market (25th).
However, as the country transitions moves up the development ladder, more needs to be done to unlock the areas of competitiveness conducive to a knowledge-driven economy: higher education, especially its quality; the use of ICTs and ability to absorb new technologies (65th), where it has steadily declined over the past decade; the capacity to innovate, about which business leaders are particularly concerned; and an inadequately educated workforce.
South Africa has dramatically reversed its four years downward trend, quickly catching up to Mauritius, and climbing seven places to reach 49th. This was attributed largely to the increased uptake of ICTs and improvements in innovation.
This country also hosts the continent’s most efficient financial market and benefits from a sound goods market, which is driven by strong domestic competition and an efficient transport infrastructure. It further benefits from strong institutions, particularly property rights and a robust and independent legal framework.
Rwanda is continuing its five-year upward trend, placing 58th. It has improved in business sophistication and financial markets, with confidence increased by improved regulation of securities exchanges and the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders. The country benefits from strong public and private institutions and efficient markets: a flexible labor market and high female participation in the labor force help Rwanda to rank 8th overall in labour market.
Africa’s largest economy, Nigeria, also showed an upward trend, improving by three positions to 124th. This was in part attributed to improvements in property rights, the efficiency of the legal framework to settle and challenge disputes, and the accountability of the private sector in lifting the country’s institutions.
Both Egypt and South Africa get notable mentions for reversing downward trends.
In Egypt’s case, this is the first time the country has moved up rankings since the Arab Spring. This reflects a more positive assessment of the country’s institutions, in particular higher levels of physical security, a more efficient judiciary in settling business disputes, and better protection of property rights.
Smaller improvements are registered on the macroeconomic environment and financial market development. The upward movement also reflects recent reforms, including a reduction of energy subsidies, tax reforms, and a strengthened business environment, as well as greater political stability after years of turmoil.