Oliver Cann, Director, Media Relations, Tel.: +41 79 799 3405; Email: Oliver.Cann@weforum.org
Cape Town, South Africa, 4 June 2015 – African economies’ prospects for long-term, sustainable growth are under threat from weakness in the core conditions necessary for competitive and productive economies, despite outwardly healthy-looking growth rates in many parts of the region, according to the World Economic Forum’s African Competitiveness Report, which is published today.
The biennial report, themed Transforming Africa’s Economies, combines detailed data from the Forum’s Global Competitiveness Index (GCI) with studies on three key areas of economic activity; agricultural productivity, services sector growth and global and regional value chains. The data points to low and stagnating productivity across all sectors: agriculture, manufacturing and services, partly as a result of ongoing weakness in the basic drivers of competitiveness, such as institutions, infrastructure, health and education. This shortfall masks a better performance in other areas of the economy; specifically, better functioning of labour and goods markets.
In view of Africa’s young and growing population, labour-intensive sectors must play a larger role in the continent’s transformation: the growth in services – both in terms of GDP and employment – cannot propel Africa’s growth alone, and even here development remains uneven, with too many people employed in low productivity services.
“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,” said Caroline Galvan, Economist, World Economic Forum and co-author of the report.
Key findings from the report’s analysis include:
“Business cannot continue as usual in Africa’s agriculture sector. It is imperative that productivity be significantly boosted through tailored agriculture research, harnessing ICT and strengthening linkages between small-scale farmers and commercial producers while better integrating them into regional and global value chains” said Steve Kayizzi-Mugerwa, Ag. Vice President, African Development Bank.
“The service sector is rapidly becoming much more prominent on the development agenda across Africa and for the World Bank. In many countries across the region, services are the most rapidly growing sector, creating new jobs and economic activities, and providing critical inputs to boost production in other sectors. Yet productivity of the service sector remains low. To be more competitive, governments must lower trade barriers as well as enact complementary regulatory reforms. These reforms are also necessary for Africa to deepen its integration into global value chains,” said Anabel González, Senior Trade and Competitiveness Director, World Bank, Washington DC.
“To consolidate the progress achieved and make new gains that will allow sub-Saharan Africa to fulfil its full potential, we need to promote further investment in infrastructure, adopt swifter trade procedures, increase regional integration and build more effective institutions. Faster structural transformation is also needed to boost productivity, enhance job creation and improve social cohesion,” said Angel Gurría, Secretary-General, Organisation for Economic Co-operation and Development (OECD), Paris.
The biennial African Competitiveness Report is jointly produced by the African Development Bank, the Organisation for Economic Cooperation and Development, the World Bank and the World Economic Forum. It contains the detailed competitiveness profiles of 40 African economies, and comprehensive summaries of the drivers of competitiveness in each. These are used by policy-makers, business strategists and other key stakeholders with an interest in the region.
There will be more than 1,250 participants at the 25th World Economic Forum on Africa in Cape Town, on 3-5 June 2015. The theme of the meeting is Then and Now: Reimagining Africa’s Future. The Co-Chairs of the World Economic Forum on Africa are: Antony Jenkins, Group Chief Executive, Barclays, United Kingdom; Phumzile Mlambo-Ngcuka, Undersecretary-General and Executive Director, United Nations Entity for Gender Equality and the Empowerment of Women (UN WOMEN), USA; Patrice Motsepe, Founder and Executive Chairman, African Rainbow Minerals, South Africa; Paul Polman, Chief Executive Officer, Unilever, United Kingdom; and Sir Michael Rake, Chairman, BT Group, United Kingdom.
Notes to Editors
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