13 June 2007
African businesses can become far more competitive, but African governments and their international partners will need to improve access to finance, rebuild infrastructure and strengthen institutions.
This is according to the Africa Competitiveness Report 2007, which was released this week at the 17th World Economic Forum (WEF) on Africa, which takes place in Cape Town between 13 and 15 June.
The report, jointly compiled by the WEF, the African Development Bank and the World Bank, analyses many aspects of Africa’s business environment and highlights the key issues that hinder improvements in Africa’s competitiveness and job growth.
According to a statement issued by the WEF this week, the report includes the rankings of 29 African countries in the Global Competitiveness Index, detailed competitiveness and investment climate profiles, the effect of gender disparities on employment and competitiveness and the role of new technologies in fostering a more dynamic business environment.
“Africa has the potential to become a far more competitive player in the global economy,” said the World Bank’s Africa region Vice President, Obiageli Katryn Ezekwesili.
“The study finds that, while a number of governments have significantly improved the business climate in their countries, the region as a whole has much more to do to make Africa a competitive location for enterprise. These changes in the business climate, together with greater access to finance and new investment in infrastructure, should come together to advance Africa’s drive to develop, create jobs and reduce poverty.”
The common themes that emerge from the report are the requirement for sound government policies, the current lack of access to financial services, the need for an improved regulatory environment, poor transportation and energy infrastructure and business having to deal with corruption.
The report also points to the growing number of success stories in the region that show the steps countries can take to improve business conditions.
Trade and investment is vital
According to WEF founder and executive chairman Klaus Schwab, the report is an attempt to place the continent in a broader international context and to cast light on the important aspects of development in the region.
“The key to the future of African economies is trade and investment and, therefore, the business climate. This is achieved by rallying investors to look at opportunities in African countries differently,” said African Development Bank President Donald Kaberuka.
“But we must vigorously now deal with the other set of barriers – physical – that means infrastructure. It is crystal clear today that energy shortages, poor roads and inadequate communication between countries and regions constitute a real impediment to the private sector and economic growth and, in the case of energy shortages, threaten to roll back economic achievements of the last six years,” he said.