AFRICANGLOBE – Closer regional integration will be crucial for addressing underlying weaknesses in Africa’s long-term competitiveness and ensuring that the continent delivers on its massive growth promise, according to the Africa Competitiveness Report 2013.
The report, jointly produced by the African Development Bank, the World Bank and the World Economic Forum, was released on the opening day of the World Economic Forum on Africa meeting in Cape Town on Thursday.
According to the report, despite the impressive growth strides made by many African economies, the continent’s competitiveness as a whole trails other emerging regions – especially in quality of institutions, infrastructure, macroeconomic policies, education and technological adoption – while large gaps persist between its highest and lowest ranked economies.
“Africa’s growth needs to be seen in the wider international context, where encouraging gains in economic growth belie an underlying weakness in its long-term competitiveness,” WEF chief economist Jennifer Blanke said in a statement on Thursday.
“Regional integration is key to addressing this weakness through the delivery of wider social and economic benefits, and should be prioritised by Africa’s leaders as they look to ensure that Africa delivers on its promise.”
Regional integration, according to the report, will be a key vehicle for helping Africa to diversify its economic base and create enough jobs for its young, fast-urbanising population.
Gaiv Tata, Africa region director for the World Bank Group, said that Africa had been enjoying an economic transformation, with growth rates of more than 5% annually over the past decade.
“To turn its economic gains into sustainable growth and shared prosperity, Africa’s public and private sectors must work together to connect the continent’s markets, deepen regional integration, and adopt reforms that enhance national competitiveness.”
According to the report, Africa’s share of world trade remains low, despite numerous regional economic communities and market liberalisation at the domestic level, with intra-African trade being particularly limited.
The report identifies cumbersome and non-transparent border administration, limited use of information communication technologies, and a persistent infrastructure deficit as the major barriers to higher levels of regional integration.
Africa’s infrastructure deficit is identified as a particularly serious impediment, made more pronounced by growth in consumer markets and urbanisation.
“Developing adequate and efficient infrastructure will assist African economies to increase productivity in manufacturing and service delivery, contribute to improvements in health and education, and help deliver more equitable distribution of national wealth,” the report states.
Mthuli Ncube, chief economist at the African Development Bank, said that sustained high economic growth “often occurs in an environment where there is a meaningful infrastructure development.
“It is therefore imperative that planning for both national and regional infrastructure projects is coupled with the requisite legal and regulatory framework that will allow for increased involvement of the private sector in infrastructure development on a public-private partnerships model,” Ncube said.