Competitiveness: South Africa makes U-turn, Rwanda keeps improving and Guinea loses

Port Louis, Mauritius. The island state maintains its position as Africa most competitive economy for the third year in a row.

Port Louis, Mauritius. The island state maintains its position as Africa most competitive economy for the third year in a row.

The World Economic Forum’s recently released Global Competitiveness Report 2015-2016 reveals how 37 African economies compete globally. Only three countries – Mauritius, South Africa and Rwanda – made it into the top half of the index.

The index measures the competitiveness of 140 economies by their institutions, policies and other factors that determine levels of productivity.

It scores countries on 12 pillars: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

Below are some key highlights from this year’s report.

Mauritius falls seven points, but still leads

Mauritius maintains its position as Africa’s most competitive economy for the third year in a row. However, after steadily rising up the ranks for the last decade, the island state dropped seven points – from 39th position last year to 46th this year.

Reasons for the drop include declines in the financial market development pillar (down eight places to 34th position globally) and labour market efficiency. It nevertheless still has Africa’s best infrastructure, most efficient goods market and a healthy and educated workforce. It ranks second on the continent in terms of its institutions.

South Africa jumps into top 50

Despite a troublesome two years of strikes, power outages and a falling rand, South Africa has jumped up seven points in this year’s ranking – now at 49th position from 56th last year. This places it in the top 50 most competitive economies in the world after a four-year downward trend.

According to the WEF, this is partly due to improved scores in ICT use. South Africa has also gained five places in the innovation category, establishing itself as Africa’s most innovative country, and 38th globally. In addition it boasts the continent’s most efficient financial markets (ranked 12th globally).

However, its quality of electricity supply (116th), burden of government regulations (117th), health and primary education (126th) and quality of education (120th) need to be addressed if the country is to improve competitiveness.

Rwanda slow and steady up the ranks

For the past five years Rwanda has been steadily making its way up the index, now placing as the 58th most competitive country in the world, and third in Africa. It has improved in seven of the index’s 12 pillars.

It is the most competitive on the continent in terms of its institutions, ranking fourth in the world in public sector performance and fifth in security. Rwanda also ranks eighth globally for its labour market efficiency, due to high participation of women in the workforce (third) and a flexible labour market (12th).

However, improvements need to be made in electricity and telephony infrastructure (112th), the workforce’s health (108th) and higher education (120th).

Guinea takes last place, again

The last six positions on the index were taken up by African economies, with Guinea at the bottom for the second year in a row.

The West African economy, which suffered under last year’s Ebola outbreak, also ranks last globally in terms of its transport infrastructure, quality of electricity supply, fixed-telephone lines, quality of higher education and training, amongst others.