New Markets Investor

Q3 2015WEF Africa 2015Africa CompetitivenessReportAfrican economies’ prospects for longterm,sustainable growth are under threatfrom weakness in the core conditionsnecessary for competitive and productiveeconomies, despite outwardlyhealthy-looking growth rates in manyparts of the region, according to the AfricanCompetitiveness Report, released atthe WEF Africa in Cape Town.The biennial report, themed “TransformingAfrica’s Economies”, is jointly producedby the African Development Bank,the Organisation for Economic Cooperationand Development, the World Bankand the World Economic Forum, andcontains the detailed competitivenessprofiles of 40 African economies, andcomprehensive summaries of the driversof competitiveness in each. These profilesare used by policy-makers, business strategistsand other key stakeholders with aninterest in the region.This year’s report combines detailed datafrom the Forum’s Global CompetitivenessIndex (GCI) with studies on three keyareas of economic activity; agriculturalproductivity, services sector growth andglobal and regional value chains.The data points to low and stagnatingproductivity across all sectors: agriculture,manufacturing and services, partlyas a result of ongoing weakness in thebasic drivers of competitiveness, such asinstitutions, infrastructure, health andeducation. This shortfall masks a betterperformance in other areas of the economy;specifically, better functioning oflabour and goods markets.In view of Africa’s young and growingpopulation, labour-intensive sectorsmust play a larger role in the continent’stransformation: the growth in services –both in terms of GDP and employment– cannot propel Africa’s growth alone andeven here development remains uneven,with too many people employed in lowproductivity services.“In recent years we have seen some ofAfrica’s leading economies make verypromising progress in terms of drivinggrowth through the enabling of markets.However, sustainable growth mustbe built on a solid foundation, and thismeans strong institutions, good infrastructureand targeted investments inhealth, education and skills,” said CarolineGalvan, Economist, World EconomicForum, and co-author of the report.Key findings from the report’s analysisinclude:• Improving agricultural productivity:Agriculture provides an importantsource of income for the majority of Africancitizens, but productivity remains toolow and based on small-scale subsistenceproduction. Improvements such as betterleveraging of technology (both informationand communications technologies,as well as development of high-yieldcrops and better irrigation), more clearlydefined land property rights and promotionof rights and opportunities forwomen, who represent a significant shareof the agricultural workforce on thecontinent, are all needed to address this.Moreover, enabling greater market accessfor small-scale farmers would help ensureinclusiveness, while the development ofregional value chains would serve as auseful stepping stone, enabling them toNew Markets Investor27