The Southern African Development Community (SADC) only has five countries inside the top 100 of the 2019 Global Competitiveness Index, highlighting how the region is struggling economically.
During the 39th SADC heads of state and government summit in Tanzania in August, SADC Chairperson John Magufuli highlighted how the region has been struggling for economic growth.
Magufuli took to the podium and criticised the SADC Secretariat for not finding answers as to why over the past 10 years the region’s Gross Domestic product GDP) growth has been decreasing and was irregular.
The last time the SADC GDP grew by more than 5% was in 2008, whereby it grew by 5.7.
Prior to 2008, the GDP recorded positive growths in the year 2005, 2006 and 2007 recording 6.6%, 7.3% and 8.0%, respectively. However, since then, the region’s economic growth has never grown by more than 5%: 2009 (0.6%), 2010 (4%), 2011 (4.0%), 2012 (4.4%), 2013 (4.3%), 2014 (3.4), 2015 (2.2%), 2016 (1.4%), 2017 (3.0%) and last year 2018 (3.1%).
In the Global Competitiveness Report released last week, only Mauritius was ranked 52. South Africa (60), Seychelles (78), Botswana (91) and Namibia (94) are in the top 100 out of 141 countries covered by the report.
“Namibia has moved up six positions in the Global Competitiveness Report rankings for 2019, from number 100 to 94 now. It is good to recognise that our reforms are getting traction,” Finance Minister Calle Schlettwein said.
SADC’s fast growing economy, Tanzania, is ranked at 117 followed by Zambia and Eswatini ranked at 120 and 121, respectively.
Zimbabwe and Malawi are ranked 127 and 128, respectively, while Lesotho (131) and Madagascar (132) follow each other.
Oil-rich Angola is ranked 136 followed by Mozambique at 137. The Democratic Republic of Congo (DRC) is the last ranked SADC country at 139 just two places above the last ranked country, Chad.
Led by Mauritius (52nd), sub-Saharan Africa is overally the least competitive region, with 25 of the 34 economies assessed this year scoring below 50. South Africa, the second most competitive in the region, improved to the 60th position, while Namibia (94th), Rwanda (100th), Uganda (115th) and Guinea (122nd) all improved significantly.
Among the other large economies in the region, Kenya (95th) and Nigeria (116th) also improved their performances, but lost some positions, overcome by faster climbers.
On a positive note, of the 25 countries that have improved their health pillar score by two points or more, 14 are from sub-Saharan Africa, making strides to close the gaps in healthy life expectancy.
Covering 141 economies, the Global Competitiveness Index 4.0 measures national competitiveness—defined as the set of institutions, policies and factors that determine the level of productivity.
The results of the GCI 4.0 in 2019 reveal that, on average, most economies continue to be far from the competitiveness “frontier”—the aggregate ideal across all factors of competitiveness. Performance is also mixed across the 12 pillars of the index.
The report demonstrates that 10 years on from the financial crisis, while central banks have injected nearly US$10 trillion dollars into the global economy, productivity-enhancing investments such as new infrastructure and skills development in the current and future workforce have been suboptimal.
Founder and executive chairman for World Economic Forum, Klaus Schwab, said as monetary policies begin to run out of steam, it was crucial for economies to rely on fiscal policy, structural reforms and public incentives to allocate more resources towards the full range of factors of productivity to fully leverage the new opportunities provided by the Fourth Industrial Revolution.
He added that the report also looks into the future, specifically the two defining issues of the next decade — building shared prosperity and managing the transition to a sustainable economy — and poses the question of their compatibility with competitiveness and growth.
“There is already a clear moral case for a focus on the environment and on inequality.
“The report demonstrates that there are no inherent trade-offs between economic growth and social and environmental factors if we adopt a holistic and longer-term approach.
“While few economies are currently pursuing such an approach, it has become imperative for all economies to develop new inclusive and sustainable pathways to economic growth if we are to meet the Sustainable Development Goals,” said Schwab.
The World Economic Forum says old leadership and proactive policy-making will be necessary, often in areas where economists and public policy professionals cannot provide evidence from the past.
“The report showcases the most promising emerging pathways, policies and incentives by identifying ‘win-win’ spaces, but also points to the choices and decisions that leaders must make in sequencing the journey towards the three objectives of growth, inclusion and sustainability,” said Schwab.
Source: The Southern Times