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Africa’s Ten Most Competitive Economies in 2007

Last Updated: 6/13/2008 1:43:07 PM

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Competitive economies offer more opportunities for its citizens to create wealth and achieve more sustainable and higher levels of prosperity. ClickAfrqiue looks at the most competitive economies on the African continent.....

The more competitive economies produce higher levels of productivity and income
The more competitive economies produce higher levels of productivity and income

The World Economic Forum releases an annual Global Competitiveness Report which analyses over 100 factors to find the world’s most competitive economies.

Competitiveness is defined as the set of institutions, policies, and factors that determine the level of productivity of a country. The productivity is then used to determine the sustainable level of prosperity that can be earned by an economy. Hence the more competitive economies tend to be able to produce higher levels of income for their citizens.

The level of productivity also sets the rates of return achieved by investments in an economy. Because the rates of return are the fundamental determinants of the growth rates of the economy, a more competitive economy is one that is likely to grow faster over the medium to long run.

The report is a valuable tool to help understand the key factors which determine economic growth, and explain why some countries are much more successful than others in raising income levels and opportunities for their respective populations. By providing detailed assessments of the economic conditions of nations worldwide, the report offers policymakers and business leaders an important tool in the formulation of improved economic policies and institutional reforms.

ClickAfrique takes a look at the 2007-2008 report to find Africa’s best performers for 2007

1. Tunisia

Global Rank: 32
Tunisia is one of the top nations in the world when it comes to providing institutional framework that stimulates economic growth and providing primary and health education. However it would need to work on macroeconomic stability, labour market efficiency and financial market sophistication to remain the number one competitive economy on the continent.

2. South Africa

Global Rank: 44
While South Africa performs averagely or above average in most indexes, it performs very poorly when it comes to providing primary and health education. . The country has one of the highest levels of income inequality, which acts as a deterrent to growth. The labour market also suffers from very high unemployment and a lack of labour market flexibility.

3. Mauritius

Global Rank: 60
While Mauritius main weakness arise from macroeconomic stability and the small size of its local market acts as a deterrent to economic growth, it outperforms most African nations when it comes to financial market sophistication.

4. Morocco

Global Rank: 64
Morocco’s major problems include access to finding for businesses, a high tax rate, rigid tax regulations and corruption. However it fares a lot better with government and policy stability. The country’s low crime rate also helps to foster economic growth.

5. Botswana

Global Rank: 76
As one of Africa’s most stable countries, Botswana has worked on providing less rigid tax policies and effective foreign currency regulations. It however faces huge challenges with its ineffective and poorly educated workforce, restrictive labour regulation, government bureaucracy and poor access to funding.

6. Egypt

Global Rank: 77
Inefficient government bureaucracy, poor access to funding, a poorly educated workforce, plus a lack of adequate infrastructure are some of the key issues that Africa’s second largest economy would need to address.

7. Algeria

Global Rank: 81
Algeria has the best track record on the macroeconomic stability on the continent but it main weaknesses arise from really poor access to funding, inefficient government bureaucracy and corruption.

8. Libya

Global Rank: 88
Since having the UN and US sanctions lifted against it, Libya’s economy has been on the rebound. The government has worked hard on controlling inflation and easing regulation on foreign currency. Its main challenges include inefficient government bureaucracy, inadequate infrastructure, policy instability and an inadequately educated workforce.

9. Namibia

Global Rank: 89
Poor distribution of wealth, poor work ethic in an already poorly educated workforce and restrictive labour laws are hampering growth in this southern African state. It however scores well in inflation control, policy and government stability.

10. Nigeria

Global Rank: 95
Nigeria scores well when it comes to macroeconomic stability, labour laws and a workforce that is better educated than most on the continent. However its economic growth in hindered by inadequate supply of infrastructure, access to financing, corruption and policy instability.


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