BENCHMARKS FOR AFRICAN COMPETITIVENESS

Very few African businesses are internationally competitive. The costs of doing business is often too high and the incentives for enterprises to flourish are too low.

Good governance – political and economic – is a prerequisite for Africa to prosper. This requires appropriate legal and institutional frameworks, as well as efficient public financial management systems that increase transparency and minimize corruption.

Effective and accountable government and competitive markets are mutually reinforcing. Political stability and progress in terms of human rights, the rule of law and the protection of property rights are also necessary.

Policies must be grounded in analysis

African leaders must take action and include the relevant stakeholders from civil society, the labour market and the private sector in these necessary reforms.

None of the above is new to the debate. The necessary policies must be grounded in detailed analysis, based on benchmarking against international standards and the particular circumstances of each country.

This will help identify the greatest constraints and opportunities, and in so doing build on previous initiatives that have been undertaken.

An index will identify key constraints and spur action

What is needed is a global index that will benchmark the competitiveness of African countries against each other – and most importantly – relative to international standards.

This index should focus critical attention on improving the business environment across the continent. Such a measure would help identify the constraints to competitiveness and the best means to resolve them. It would act as a spur to entrepreneurship and promote growth and employment.

Poverty reduction will require making African countries better places to do business: less expensive, less risky, and more open to trade according to the standards set by worldwide best practices. Benchmarking African countries’ competitiveness internationally can help spur and improve national debate on necessary reforms.

Partnership with World Economic Forum

The World Economic Forum Global Competitiveness Index stands out, in analytical terms, as the most sophisticated index. It is comprehensive and covers several dimensions of competitiveness such as institutions and governance, health, education, innovation, infrastructure and market efficiency (including doing business indicators).

The framework is especially useful because it will enable distinctions to be drawn within the large group of African countries that sit between the top performers and those struggling at the bottom.

The Africa Commission intends to partner with the World Economic Forum to maintain and extend the coverage of African countries in the Global Competitiveness Index.