Rwanda ranked the most improved nation in sub-Saharan Africa
The Global Competitiveness Report 2016-2017, which was published on Wednesday September 28, has ranked Rwanda the most improving nation in Sub-saharan Africa.
The report, published by the World Economic Forum, says Rwanda has risen 6 places to 52- closing in on the region’s traditionally most competitive economies; Mauritius and South Africa, despite the two countries registering more modest improvements, climbing to 45 and 47 respectively.
In 2014-2015 report, Rwanda improved its world ranking to 62nd position in the world, up from 66th last year. In Africa, Rwanda retained 3rd position and number one in the East African Community. This improvement comes particularly from labor market efficiency and institutions pillars where Rwanda ranked 9th and 18th in the world respectively.
Lower down the ranking, Kenya climbs to 96, Ethiopia holds steady at 109 while Nigeria slips three to 127.
Two countries in Latin America and the Caribbean make it into this year’s top 50. Chile, the outlier in the region on 33, climbs two places although the gap is closing with the second highest ranked economy, Panama (up 8 places to 42). Next comes Mexico which performs strongly with a 6-point climb to 51. Argentina and Colombia, the third and fourth largest economies in the region, ranked 104 and 61 respectively. According to the rankings, Rwanda is followed by Botswana (64), Namibia (84) and Kenya (96).
The report is an annual assessment of the factors driving productivity and prosperity in 138 countries. The degree to which economies are open to international trade in goods and services is directly linked to both economic growth and a nation’s innovative potential.
The trend, which is based on perception data from the Global Competitiveness Index (GCI)’s Executive Opinion Survey, is gradual and attributed mainly to a rise in non-tariff barriers although three other factors are also taken into account; burdensome customs procedures; rules affecting FDI and foreign ownership.
It is most keenly felt in the high and upper middle income economies.
“Declining openness in the global economy is harming competitiveness and making it harder for leaders to drive sustainable, inclusive growth,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.
The report also sheds light on why quantitative easing and other monetary policy measures have been insufficient in reigniting long-term growth for the world’s advanced economies.
The report finds that interventions by economies with comparatively low GCI scores failed to generate the same effect as those performed in economies with high scores, suggesting that strong underlying competitiveness is a key requirement for successful monetary stimulus.
The report offers insight into how priorities may be shifting for nations in earlier stages of development. While basic drivers of competitiveness such as infrastructure, health, education and well-functioning markets will always be important, data in the GCI suggests that a nation’s performance in terms of technological readiness, business sophistication and innovation is now as important in driving competitiveness and growth.
The Global Competitiveness Index in 2016 for the eighth consecutive year, Switzerland ranks as the most competitive economy in the world, narrowly ahead of Singapore and the United States.
Following both countries is Netherlands and then Germany. The latter has climbed four places in two years. The next two countries, Sweden (6) and the United Kingdom (7) both advance three places, with the latter’s GCI score being based on pre-Brexit data.
The remaining three economies in the top ten; Japan (8), Hong Kong Special Administrative Republic (SAR) (9) and Finland (10) all move backwards.
While European economies continue to dominate the top ten, there remains no end in sight for the region’s persisting north-south divide. Spain improves by one point climbing to 32, however Italy drops back one place to 44 and Greece reverses 5 places to 86.
France, the Eurozone’s second largest economy, climbs one place to 21. For all economies in Europe, maintaining and improving prosperity levels will depend heavily on their ability to harness innovation and the talents of their workforces.
There is some sign of convergence in the competitiveness of the world’s largest emerging markets. China, on 28, remains top among the BRICS grouping although another surge by India – which climbs 16 places to 39 – means there is now less of a gap between it and its peers. With both Russia and South Africa moving up two places to 43 and 47 respectively only Brazil is declining, falling six places to 81.