African countries must resist pressure to erect trade
barriers
Masahudu Ankiilu Kunateh, Ghanadot
Accra, June 10, Ghanadot - A call
has gone out to African countries to resist pressure to
erect trade barriers, which are inimical to the development
of the African continent.
Instead, African governments and their international
partners will need to improve access to finance, upgrade
infrastructure, improve healthcare and educational systems
and strengthen institutions.
According to, The Africa Competitiveness Report 2009, which
reflects research efforts of three institutions – the World
Economic Forum, the African Development Bank and the World
Bank.
The report indicated that limited access to financial
services remains a major obstacle for African enterprises,
but underdeveloped infrastructure, limited healthcare and
educational services, and poor institutional frameworks also
make African countries less competitive in the global
marketplace. The report also points to a number of success
stories in the region that highlight steps countries can
take to improve the business environment.
The jointly produced report was released ahead of the World
Economic Forum on Africa, taking place from 10 to 12 June in
Cape Town, South Africa. It is the second report on the
region’s business environment to leverage knowledge and
expertise within the three organizations. The report also
presents an integrated vision of the policy challenges
African nations face as they build a foundation for
sustainable growth and prosperity.
The report highlights two short-term and three longer-term
policy themes for improving the competitiveness of African
economies. The two short-term themes are:
Increasing access to finance through market-enabling
policies: Africa’s financial systems have been deepening and
broadening in recent years, but the current global crisis
threatens to reverse this trend and undermine recent
progress. It is now even more important to upgrade the
necessary frameworks for sound, efficient and inclusive
financial systems.
Keeping markets open to trade: Protectionist forces are
emerging in response to the global economic crisis. Yet,
such measures will further reduce demand and restrict
growth. Africa’s leaders must resist domestic political
pressures to erect trade barriers that would make the
region’s recovery even more difficult.
The three longer-term themes are: Infrastructure remains one
of the top constraints to businesses in Africa: Energy and
transportation are among the main bottlenecks to
productivity growth and competitiveness in Africa.
Investment in upgrading infrastructure would both place
Africa on a higher growth trajectory as well as serve as a
fiscal stimulus at a critical time.
Inefficient basic education and healthcare systems constrain
Africa’s productive potential: This is perhaps the most
urgent area in need of attention. Unless educational and
healthcare systems are upgraded in Africa, firms will
continue to be constrained in their move up the value chain,
and economic development will be hindered.
More examples of good governance and strong and visionary
leadership are needed: Strong and transparent institutional
environments have contributed to the success of Africa’s
most competitive economies. Much has been done in recent
years to improve these structures, yet in many parts of the
region, institutions need to be more business-friendly to
foster competitiveness. This is particularly important at
present when the current global economic crisis threatens to
induce reversals in governance reform.
“This year’s Africa Competitiveness Report is the second
comprehensive effort by our three organizations to place the
continent in a broader international context and to shed
light on the important aspects of development in the region,
which are so critical particularly at this time of global
economic crisis,” said Klaus Schwab, Founder and Executive
Chairman of the World Economic Forum.
“Investment in infrastructure with a regional focus would
help cushion the impact of the crisis and position Africa to
take advantage of the rebound of the global economy when it
occurs,” indicated Obiageli Katryn Ezekwesili,
Vice-President of the Africa Region at the World Bank in
Washington, D.C. “The countries that will reap the most
benefit and limit the adverse impact of the crisis would be
those that sustain reforms, strengthen governance, modernize
local capital markets and make the investments needed to tap
the immense resourcefulness and creativity of their people."
“The most critical issue for us at this stage is how we
strike the balance between short-term crisis response, while
remaining focused on the long-term issues, key for
sustaining Africa’s growth, such as the development of
infrastructure, and a skilled labour force, as well as
economic integration,” said Donald Kaberuka, President of
the African Development Bank.
In addition to assessments of the competitiveness and costs
of doing business on the continent, the report also includes
an analysis of the depth and sophistication of the region’s
financial markets, the effective measures that the
relatively smaller economies on the continent have
introduced to promote their competitiveness, and the extent
to which African countries have put in place factors
facilitating cross-border trade.
Also included in the report are detailed competitiveness and
investment climate profiles, providing a comprehensive
summary of the drivers of competitiveness in each of the
countries covered by the report.
Instructively, The Africa Competitiveness Report 2009 is an
invaluable tool for policy-makers, business strategists and
other key stakeholders, as well as essential reading for all
those with an interest in the region.
Ghanadot
