Initiative: Benchmarking African Competitiveness

Background

African countries must become more competitive if they are to benefit from globalisation. The key challenges are to identify the main constraints to competitiveness, devise the necessary reforms, and then implement them in accordance with international standards and the particular characteristics of each country.

The World Economic Forum’s Global Competitiveness Index that benchmarks countries’ competitiveness is a relevant tool for this purpose. It defines competitiveness as the set of institutions, policies and factors that determine the level of productivity of an economy. The Global Competitiveness Report provides a unique benchmarking tool for businesses, in developing strategies and guiding investment decisions; and for governments and the private sector, in identifying obstacles to economic growth and assisting in the design of better economic policies.

Objective

The objectives are to:

• Increase, sustain and improve the coverage of African countries in the Global Competitiveness Index and related benchmarking reports, including the Africa Competitiveness Report, for a period of minimum five years
• Facilitate follow-up of the Global Competitiveness Index analyses and ensure dissemination and advocacy of the index at country level
• Ensure follow-up and pressure for reform at the highest level through the African Union Commission

The need to improve competitiveness will be kept high on the African agenda to foster policy dialogue and reforms at the country level.

Strategic approach

The World Economic Forum has analysed the competitiveness of African countries since the early 1990s and has produced regional reports on the competitiveness of Africa for over a decade. The World Economic Forum’s competitiveness work uses data from the Forum’s Executive Opinion Survey. The Executive Opinion Survey meets the need for up-to-date and far-reaching data, providing valuable qualitative information for which hard data sources are scarce or nonexistent. It complements the hard data derived from various international sources, such as the World Bank’s “Doing Business” report. The data gathered thus provides a unique source of insight and a qualitative portrait of each nation’s economic and business environment, and how it compares with the situation in other countries.

The feasibility and relevance of increasing the number of indicators that are youth-, gender-and agriculture-specific will be explored for inclusion in the 2010 Executive Opinion Survey, taking into account the importance of agriculture in many African countries.

Governments around the world already pay close attention to the annually-released Global Competitiveness Index results and use them to track progress over time. The World Economic Forum will disseminate the findings of the report and facilitate a system for following-up on the findings nationally or regionally to enhance reform processes. This will help develop structures that would enable not only debates on the necessary reforms, but also permit African governments and other stakeholders to analyse the data and use these findings to develop a substantive reform agenda. This initiative will help facilitate the outreach of the Global Competitiveness Index and link-up with existing institutions and processes at the national level.

Over the next five years, this initiative will secure the inclusion of an increasing number of countries in the Global Competitiveness Index.

Activities

Activities will include:

• Data collection and analysis by the World Economic Forum and partner institutions in African countries
• Outreach and dissemination of the results of the Global Competitiveness Report at regional meetings and in African countries to achieve maximum policy impact. The African Union will play a key role in this process. An economist from the World Economic Forum’s Global Competitiveness Network will attend workshops in selected countries each year to present the findings to a private-public stakeholder gathering
• In selected countries, further country-specific analytical work will be undertaken to inform policy dialogue between government, the private sector, labour market organisations and civil society. Where appropriate, this will be achieved via mechanisms that facilitate the dissemination and sharing of good practices. Such mechanisms, existing or newly established, will be tasked with drawing up national action plans
• Support for the development of modalities for a possible competitiveness review mechanism integrated into the existing African Peer Review Mechanism

Expected output

The initiative is expected to produce the following output over the next five years.

• Launch of reports at regional meetings
• Four to five workshops will be held in selected African countries, including leaders from business, government and civil society, with a goal of initiating a process of review and policy reform for improved competitiveness
• Additional policy research carried out in a number of selected countries which have influenced and contributed proposals for policy reforms
• A competitiveness review mechanism integrated into the existing African Peer Review Mechanism

These activities should put competitiveness higher on the agendas of the target countries and spur debate among policy makers, media, the private sector and other stakeholders. The results are expected to include better policies and more competitive African economies that will have moved higher up on the Global Competitiveness Index.

Setup (management and organisation)

The World Economic Forum will be responsible for: Data collection; writing the report; launching the Global Competitiveness Report globally and the Africa Competitiveness Report at regional meetings; and participating in the national-level launching workshops.

The African Union Commission will be responsible for activities at the Pan-African level.

An African partner policy research organisation with the relevant capacity will be engaged to prepare and organise the national-level workshops and facilitate follow-up in a number of selected countries.

Overall budget

A tentative budget for this initiative is estimated at USD 2. 7 million for five years.