Rwanda leads EA region economic competiveness

12 pillars

According to the report, Africa needs to improve competitiveness across the 12 GCI pillars to achieve sustainable growth and reap the demographic dividend.

The 12 pillars are further compressed into three structures based on the critical areas for each economy. These include the lowest level of `basic requirements’ for economies where competiveness is still predominantly dependent on factor endowments such as unskilled labour and natural resources. Most East African economies are at this stage.

As the economy advances and starts to depend on more efficient production processes for rising product quality, it enters the arena of `efficiency enhancers’ which depends on higher education and training, goods market efficiency, and labour market efficiency. Competiveness of economy in this stage also depends on financial market development, technical readiness, and good market size. Few Africa countries are in this stage.

The last category is where competiveness depends on `Innovation and Sophistication’ factors. These include business sophistication and innovation.

In a preface to the report the African Development Bank Group President, Akinwumi Adesina, the World Bank President, Jim Yong Kim, and the World Economic Forum Executive Chairman, Klaus Schwab, warn that the 2017 edition of The Africa Competitiveness Report comes out at a challenging time for the continent.

They note that there has been a subdued growth in recent years after more than a decade of solid expansion and blame it on global low commodity prices and the reduced growth in emerging markets such as China, and in advanced economies.

But, they say, this adverse situation has also given impetus to reforms and economic diversification.

“The strong economic performance of a number of African countries demonstrates Africa’s resilience and brings optimism about Africa’s future growth prospects.

“Looking ahead, the continent’s young and increasing population presents an unprecedented opportunity to spur rapid development. A growing labour force and a large and emerging consumer market hold the promise of significant growth opportunities. Yet challenges to reaping these potential gains and achieving greater shared prosperity remain.”

According to the competitive index, Mauritius, South Africa, and Botswana are the best performing economies. The worst performing economies are Mauritania, Burundi, and Madagascar.

In the East African region, South Sudan is not ranked. However, among the remaining five member states, Rwanda is the best performing, followed by Kenya, Uganda, Tanzania, and Burundi comes last.

This is the third year in a row that Rwanda is leading the East African region and the order of performance is unchanged for the other countries.

Rwanda leads in institutional competitiveness, infrastructure, health and primary education, and goods market efficiency, labour market efficiency, and financial market development.

Kenya leads in innovation, business sophistication, market size, technological readiness, and higher education and training. Tanzania leads in microeconomic environment.

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