According to the WEF, the index “contains a detailed country/economy profile for each of the 125 economies featured in the study, providing a comprehensive summary of the overall position in the Index rankings as well as a guide to what are considered to be the most prominent competitive advantages and competitive disadvantages of each.”
The annual report, like the economic indexes published by other organizations throughout the year, confirms that Cameroon’s economy is relatively stagnant, in spite of recent regulatory improvements in line with requirements of donor institutions. The economy is still burdened by over-regulation, weak institutions, the absence of the rule of law, and corruption.
The report uses about 100 indices, which have been bundled into nine “pillars”, to gauge each country’s level of competitiveness: (1) Institutions (2) Infrastructure (3) Macroeconomy (4) Health and primary education (5) Higher education and training (6) Market efficiency (7) Technological readiness (8) Business sophistication (9) Innovation
Cameroon was at the bottom of the pile in eight of the pillars all nine pillars (120th for infrastructure, 117th for institutions, 115th for market efficiency, 113th for technological readiness, 104th for health and primary education, 103 for higher education and training, 101 for business sophistication, and 97th on innovation). However, it earned a remarkable 40th place for the macroeconomy pillar.
African Economies Lagging
Cameroon’s performance was nonetheless in line with that of the majority of countries in Sub-Saharan Africa. According to the report,
“Although sub-Saharan Africa has experienced high growth over the past few years, the results of the Global Competitiveness Index suggest that this trend may not be sustainable. In terms of competitiveness, the region lags far behind the rest of the world. Nineteen of the 24 countries from sub-Saharan Africa included in this year’s sample rank among the 25 weakest performers occupying ranks of 100 or lower… Only a few countries are taking advantage of the global boom in commodity prices to build a basis for long-term growth.”
The reason for this abysmal performance can be found in an explanation given by Augusto Lopez-Claros, Chief Economist and Head of the WEF’s Global Competitiveness Network. Although the explanation is specifically for Nigeria, it applies to other countries in Sub-Saharan Africa:
“There are also serious gaps in the quality of its institutions – especially public ones – as the country remains afflicted by perceived graft and security problems, as well as insufficient protection of property rights.
“As in other developing countries, infrastructure has not received sufficient policy prioritisation and school enrolment rates are very low by international standards.
“Finally, more needs to be done to reduce trade barriers, to increase competition, improve labour-employer relations and counter the loss of human capital through brain drain.”
In all, 14 African countries were included in the report with Tunisia leading the pack at number 30, an improvement from its 37th position in 2005. South Africa dropped by five places from last year and is now ranked 45, Mauritius retained its 55 ranking, Egypt dropped from 52 to 63, but Morocco improved in its ranking from 76 to 70. Algeria improved its standing to 76 from 82 last year, Botswana moved from 72 to 81, Namibia also dropped from 79 to 84, Kenya from 93 to 94, Gambia gained from 109 to 102, Tanzania from 105 to 104, Benin from 106 to 105.
The report argues that in order for African economies to see substantial and sustained growth, countries in the region need to place “a greater emphasis on the basic requirements for the factor-driven stage of development, namely better macroeconomic management, infrastructure, education, and institutions.”
The Leading Economies
According to the report, Switzerland, Finland and Sweden are the world’s most competitive economies. Denmark, Singapore, the United States, Japan, Germany, the Netherlands and the United Kingdom complete the top ten list, but the United States shows the most pronounced drop, falling from first to sixth.
“The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy for boosting competitiveness in an increasingly complex global economy. Business activity in these countries benefits from a well-developed institutional framework, characterized by the rule of law, an efficient judicial system and high levels of transparency and accountability within public institutions. Excellent infrastructure is an additional positive feature of the business environment. Our indicators point to the rapidly growing importance of higher education and training as engines of productivity growth. Countries that, like the Nordics, are investing heavily in education are likely to see rising levels of income per capita, growing success in reducing poverty and an increasing ability to establish a presence in the global economy,” said Augusto Lopez-Claros, Chief Economist and Director of the World Economic Forum’s Global Competitiveness Network.”
A lesson for SSA countries, if they hope to become full-fledged players and stakeholders in the global economy.