Francis Ayieko
12 October 2008
Nairobi — Kenya has shrugged off the negative effects of the post-election violence that rocked the country in January-February to become one of the most competitive economy in East Africa.
According to the Global Competitiveness Report 2008/09 released last week by the World Economic Forum, Kenya has improved its global ranking among the most competitive economies, moving from position 99 in the 2007/08 survey to 93 currently.
The country has posted the best performance among the four East African Community states -- Kenya, Uganda, Tanzania and Burundi -- which participated in the 134-nation survey. It is not clear why Rwanda is the only EAC country missing from the report.
Based on 12 pillars, the Global Competitiveness Reports aim at providing benchmarking tools for business leaders and policy makers to identify obstacles to improved competitiveness, stimulating discussion on strategies to overcome them.
The World Economic Forum defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country.
The level of productivity, in turn, sets the sustainable level of prosperity that can be earned by an economy.
Kenya is the only EAC country that registered an improved economic competitiveness rating in the past one year.
The report shows that Tanzania's ranking plummeted from position 104 last year to 113 this year. Uganda, on the other hand, dropped eight points from number 120 last year to 128 this year.
Burundi, which together with Rwanda formally joined the EAC family last July, dropped two points from position 130 last year to 132 this year.
Overall, the US, which is currently facing a serious financial crisis, is ranked as the most competitive economy in the world.
At position 45, South Africa is the highest ranked country in sub-Saharan Africa. But this is a one-point drop compared with the 2007/08 rankings, which placed it at position 44.
Its competitiveness is being driven by the large size of its economy, which the report says has "a very stable performance."
But the news for Kenya would be the revelation that its improved competitiveness came from its traditional growth drivers.
"Notwithstanding the post-election political and social turmoil earlier in the year, Kenya -- ranked 93rd overall -- has moved up six places this year, with its key strengths found in the more complex areas normally reserved for countries at higher stages of development," the report says.
One such area, according to the report, is the country's innovative capacity, which put Kenya as the 42nd most innovative country, driven by high company spending on research and development, and "good scientific research institutions collaborating well with the business sector in research activities."
Supporting this innovative potential is the country's educational system. The report puts the quality of the country's education at position 33.
However, the report says the country is still educating a relatively small proportion of the population compared with most other countries. Its primary, secondary and tertiary enrolment rates are ranked 116th, 108th and 126th, respectively.
Financial markets have also scored highly, putting the country at position 44, based on their sophistication relative to international standards.
Giving the financial markets high grades was the easy access to loans and share issues on the local stock market.
However, despite the overall good ranking, the report points accusing fingers at government bodies which it says are eroding Kenya's overall competitive potential.
It mainly blames inefficiency, bureaucracy and rampant corruption in government offices.
"The country's public institutions continue to be assessed as highly inefficient (100th), plagued by undue influence (111th) and high levels of corruption (101st)," the report says.
The report also singles out the security situation in Kenya, describing it as "extremely worrying."
The country is ranked 126th in terms of crime and violence, 129th on the potential of terrorism and 118th on the prevalence of organised crime. According to the report, health -- ranked 117th -- is another area of serious concern, due to poor health indicators in the country.
Interestingly, the security situation and health concerns also remain the biggest obstacles to South Africa's competitiveness.
"The poor security situation remains an important obstacle to doing business in South Africa. The greatest concern, however, remains the health of the workforce, ranked 129th out of 134 countries, due to high rates of communicable diseases and poor health indicators more generally," the report notes.
The annual rankings, which have been done since 1979, are calculated from both publicly available data and an executive opinion survey, conducted by the World Economic Forum together with its partners, mainly research institutions and business organisations, in the countries covered by the report.
Be the first to Write a Comment!
Copyright © 2008 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
