Africa Competitiveness Report 2009

This report highlights short and long-term reforms for improving the competitiveness of African economies. Short term reforms include:

Increasing access to finance through market-enabling policies

• African economies must bolster their institutions, deepen bond markets and improve crisis preparedness.

Keeping markets open to trade

• Africa’s leaders must resist domestic political pressures to erect trade barriers that would make the region’s recovery even more difficult.
• Measures to reduce the cost of exporting must be accelerated – such as custom reforms, improvement in infrastructure, and streamlining procedures.

Long-term reforms are necessary in the areas of infrastructure, health, education and governance.

Infrastructure remains one of the top constraints to businesses in Africa

• Investment in upgrading infrastructure would both place Africa on a higher growth trajectory as well as serve as fiscal stimuli at this critical time.
• Africa needs to do more to improve its energy generation and distribution through improving its institutional and legal framework; encouraging private sector involvement; and exploiting the enormous potential of renewable energy sources.
• Creating a major road network has been advocated for years but has not happened. At the same time, high transport cost can be reduced by fostering competition.

Lack of basic education and poor healthcare systems constrain Africa’s productive potential

• In addition to increasing resources directly to schools to ease the burden on households, African governments need to enhance public information on the rights and benefits of schooling, better deploy teachers across rural and urban areas, build schools closer to rural communities, and encourage private sector participation in education at all levels.

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. In many parts of Africa, however, these institutions need to be more business-friendly to foster competitiveness.