20 September 2013

Namibia: Surprising Findings From Global Competitiveness Report

Windhoek — Namibia maintained her score of 3.9 out of 7 in the World Economic Forum's (WEF) Global Competitiveness Report (GCR) 2013/14, but improved her ranking by two places to rank 90 out of 148 countries. The improvement is owed to a better ranking in the second of the three pillars, namely the efficiency enhancers (rank 99 instead of 105).

The decline in the first pillar (basic requirements) from rank 82 to 85 is caused by a drop in ranking from 120 to 125 in primary education and health - a trend that has continued since GCR 2009-10. However, the country scores quite well in categories such as institutions (rank 48) and infrastructure (rank 60).

Despite improvements compared to last year, the score is still below previous years' performances. Within these categories, auditing standards (rank 30) and quality of ports (rank 27) top the list. Namibia performed quite well regarding efficiency enhancers with all indicators except 'good markets efficiency' improving including higher education and training (from 119 to 115). Highlights in this category include: total tax rate (16), soundness of banks (23) and legal rights index (28), while the business impact of HIV/AIDS (145), tuberculosis cases (145) the degree of customer orientation (140) and number of days to start a business (136) clearly point at areas that need attention. The country improved slightly in the third pillar (innovation and sophistication) moving from rank 103 to 102.

"Some findings are rather surprising, such as the rating of railroad infrastructure (rank 45), while others are not. Namibia features in the bottom part of the ranking for some indicators, such as the market size (121) since the indicator is based on total GDP and not GDP per capita and hence this naturally disadvantages smaller economies. Likewise, the country ranks low in terms of availability of airline seats, which does not account for population size," explained Klaus Schade, a research associate at the Institute for Public Policy Research.

Schade added that despite the need to review the usefulness of some of the indicators, the report provides useful feedback on how Namibia compares on a global level. "There are a number of areas where improvements are easier to achieve than in others, such as the number of procedures and days to start a business (rank 116 and 136 respectively). Initiatives by the Ministry of Trade and Industry of a one-stop shop or single window for investors, once implemented, will result in improved ease of doing business in Namibia," he said. Commenting on the report this week, Minister of Trade and Industry, Calle Schlettwein, said his ministry has already started working on the single window approach, which he said will drastically improve the timeframe to start a business in the country.

According to Rowland Brown, the chairman of the Economic Association of Namibia, other areas that warrant attention include 'hiring and firing practices' (rank 135) and 'pay and productivity' (rank 103) as well as 'customer orientation' (rank 140). Analysts expect that the fourth National Development Plan (NDP4) priorities as well as the new government initiative of 'Growth at Home' should have a positive impact in the near future on some of the indicators, mainly on 'Value Chain Breadth' (rank 130) and 'Local Supplier Quantity' (rank 134).

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