Transforming Africa`s Economies Into Competitive Powerhouses?
By admin June 12, 2015



Advancing Africa`s competitiveness along agriculture, service industries and value-chain continuums reveals that these are key drivers in translating African economies from inefficient labour markets marred by a lack of competitiveness, into globally competitive powerhouses.

Insufficient institutions, infrastructure, health and education are stunting Africa`s potential for competitiveness not just within the region, but also in surrounding areas. The recent World Economic Forum (WEF) Biennial Report, `Transforming Africa`s Economies` utilizes data derived from the WEF`s Global Competitiveness Index (GCI) and couples it with studies based on three key areas of economic productivity: agricultural productivity, services-sector growth and global and regional value chains (GVCs).

The data derived from this report reveals patterns of low and continuously stagnant productivity across the spectrum of the three key areas: agriculture, manufacturing and services. This competitiveness shortfall is due to weak institutions, infrastructure, health and education –the key elements which primarily drive a country`s competitiveness.

In Africa, labour intensive markets have the potential to transform African economies, in terms of GDP and employment. However, this acts or serves to further undermine the shortfall in that service-driven sector is not solely enough to propel GDPN and mitigate unemployment levels. Why is this the case? A large majority of African`s find small-scale subsistence from low-productivity, under developed sectors.

Caroline Galvan, Economist at the WEF remarked that “in recent years, we have seen some of Africa`s leading economies make very promising progress in terms of driving growth through the enabling of markets. However, sustainable growth must be built on a solid foundation, and this means strong institutions, good infrastructure and targeted investments in health, education and skills”.

However this is not the sole piece of the puzzle. The WEF Report has gathered that this shortfall can be abated in view of leveraging or advancing Africa`s competitiveness by way of three things. Firstly, in order to improve agricultural productivity by bettering investment in and use of technologies related to information and communication. For instance, by investing in irrigation systems. More tentative and clearly defined land and property rights and opportunities of women who contribute significantly to the continental Agricultural workforce.

Secondly, and adding on to the way in which Africa`s competitiveness can be leveraged is through the leveraging of services. What this pertains to is exports that are tied to services are pertinent for African economies. The development of cost-efficient, high quality services has the capacity or potential to promote the development of services in view of a wider growth area. The development of services can thus be viewed as an important catalyst for growth.

Thirdly, what for GVCs and what do they have to offer for the growth of African economies? The diversification of economic activities and an enhanced productivity has the potential to create pivotal gains that will allow for greater participation in the global and regional value chains. It is noted that in order to make these chains sustainable, there has to be a broad-set of policies, with specific emphasis on trade facilitation, investment transport, infrastructure and access to finance. Such policies will transcend the basic integration of GVCs and have significant impact in other far-reaching economic areas.


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