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Africa Competitiveness Report 2013: Public-Private Collaboration Can Make Africa Globally Competitive

STORY HIGHLIGHTS
  • Growth in Africa has yet to translate into widespread poverty reduction
  • A new report on Competitiveness in Africa suggests that collaboration between the public and private sectors is critical to shared prosperity
  • Access to capital for entrepreneurs and infrastructure development must also improve

WASHINGTON, May 9, 2013—Africa’s economies have been experiencing annual growth rates well above 5% in the last decade. There is widespread optimism about the Region’s prospects for steady growth amidst a global economic downturn. However, as The Africa Competitiveness Report 2013 cautions, serious challenges remain.

Africa’s Competitiveness Challenge

Overall, high economic growth rates have not translated into better living standards for Africans. World Bank estimates show that 48.5%of sub-Saharan Africa’s population still struggles to survive on less than $1.25 a day.  Job creation has not kept pace with the booming population, which has reached the 1 billion mark – or 15% of the world’s total – and is projected to increase to 20% by 2030. And with falling labor productivity figures and a manufacturing sector that has remained largely stagnant since the 1970s, many African economies trail the rest of the world in competitiveness.

The Private-Public Path to Inclusive and Sustainable Growth

The Competitiveness Report, launched May 9 during the World Economic Forum in Cape Town, shows that 14 out of the 20 least competitive economies are in Africa. To get on a path of sustainable growth and shared prosperity, Africa’s economies need to improve their public institutions and infrastructure, deepen regional integration and provide their citizens with quality education. Private and public sector collaboration is a key element in the drive towards competitiveness.

By instituting the right legal, regulatory and economic frameworks, governments can lay the foundations for a business-friendly environment that allows firms to grow and regional integration to take place.  More investments in science and innovation, as well as a focus on skills development and training, will give young Africans the skills they need to compete in the global economy - an urgent need in a continent that is home to 200 million people between the ages of 15 to 24.

Investing in Infrastructure

Better roads, efficiently run ports, reliable electricity and other improvements in infrastructure can make countries more attractive to job-creating investors.  The continent also lags in technological readiness. ICTs, which enable efficiency and innovation, have become critical tools in today’s economy. Going forward, African economies need to not only invest in ICT infrastructure, but empower citizens with the knowledge they need to put these technologies to productive use.

The private sector also has an important role to play. Businesses can support and advocate for reforms that can enhance competitiveness at the national level, and lend their support to initiatives that facilitate trade beyond national borders. Public-private partnerships can also lead the way in creative approaches to competitiveness.

“As African countries focus on increasing their competitiveness, they are testing new approaches -- such as growth poles -- to spur investment and sustainable growth,” says Gaiv Tata, Director of Finance and Private Sector Development in the World Bank’s Africa Region. “Broadening access and entry into Africa’s regional markets can support job creation.”

Currently, the World Bank is working in countries such as Burkina FasoMauritius and Niger to develop Growth Poles, centers of industry that can become magnets for investment in specific sectors.

Financial institutions such as Banks can also expand their services so that entrepreneurs can get the capital they need to grow their businesses. According to the report, access to finance is the biggest concern of business leaders throughoutsub-Saharan Africa, who also expressed concern about inadequate infrastructure.

The Way Forward

Africa’s decade of economic growth has energized the continent with a sense of optimism about its future.  But as the Africa Competitiveness Report 2013 shows, if the region is to live up to its promise, the public and private sector must work together on reforms that will allow Africa to compete with the rest of the world and create prosperity for its citizens.