Switzerland, for the fourth consecutive year, tops the overall rankings in The Global Competitiveness Report 2012-2013, released today by the World Economic Forum. Singapore remains in second position and Finland, in third position, overtaking Sweden (4th).
The report confirms that Africa’s competitiveness has been improving in recent years, although the region continues to be characterized by wide regional disparities. South Africa (52nd) and Mauritius (54th) continue to lead the rankings, followed by Rwanda (63rd), Seychelles (76th) and Botswana (79th).
Top 10 African Competitive Economies on
Tunisia (44 on World map)
South Africa (54)
Kenya is ranked number 11 in Africa and 106 worldwide. Here is the full list
However, 14 of the 20 overall lowest-ranked economies are from Africa. The region has been improving in recent years in specific areas, such as educational attainment and goods market efficiency, but a persistent infrastructure deficit and health concerns continue to be significant bottlenecks.
This year’s Global Competitiveness Report introduces five additional sub-Saharan African economies: Gabon (99th), Guinea (141th), Liberia (111th), Seychelles (76th) and Sierra Leone (143rd). Looking forward, countries in Africa continue to require comprehensive efforts across the board to improve their competitiveness.
Despite growing its overall competitiveness score, the United States continues its decline for the fourth year in a row, falling two more places to seventh position. In addition to the burgeoning macroeconomic vulnerabilities, some aspects of the country’s institutional environment continue to raise concern among business leaders, particularly the low public trust in politicians and a perceived lack of government efficiency.
On a more positive note, the country still remains a global innovation powerhouse and its markets work efficiently.The report suggests that Switzerland and countries in Northern Europe have been consolidating their strong competitiveness positions since the financial and economic downturn in 2008. On the other hand, countries in Southern Europe, i.e. Portugal (49th), Spain (36th), Italy (42nd) and particularly Greece (96th) continue to suffer from competitiveness weaknesses in terms of macroeconomic imbalances, poor access to financing, rigid labour markets and an innovation deficit.
The large emerging market economies (BRICS) display different performances. Despite a slight decline in the rankings of three places, the People’s Republic of China (29th) continues to lead the group. Of the others, only Brazil (48th) moves up this year, with South Africa (52nd), India (59th) and Russia (67th) experiencing small declines in rankings.
Download the full Global Competitiveness rankings
Behind Singapore, several Asian economies are performing strongly, with Hong Kong SAR (9th), Japan (10th),Taiwan, China (13th) and the Republic of Korea (19th) all in the top 20.
In the Middle East and North Africa, Qatar (11th) leads the region while Saudi Arabia remains among the top 20 (18th). The United Arab Emirates (24th) improves its performance while Kuwait (37th) declines slightly. Morocco (70th) and Jordan (63rd) improve slightly.
In Latin America, Chile (33rd) retains the lead and a number of countries have improved their competitiveness, such as Panama (40th), Brazil (48th), Mexico (53rd) and Peru (61st). Read more highlights of the report.
“Persisting divides in competitiveness within regions, between regions and among emerging markets are harming productivity, and this is jeopardizing our future prosperity,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum. “We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path.”
Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, said: “The Global Competitiveness Index provides a window on the long-term trends that are shaping the competitiveness of the world’s economies. In this light, we hope it offers insight into the key areas where countries must act if they are to optimize their economic development.”
JOHANNESBURG/LAGOS - Beer sales in Africa are surging because of economic and population growth, a trend rubbing against the grain of another demographic factor defining the region: intense religiosity.
By almost any measure, Africa is an exceptionally devout place and the major growth area for Christianity and Islam.
This should have implications for investors, especially in the fast-growing retail and beer sectors: they must navigate sacred sensitivities in areas such as marketing and factor the faithful into forecasts and demographic profiles for the continent's population of just over a billion.
Brewing executives have said they tone down their advertising campaigns in Africa, and these do tend to be conservative.
In Nigeria for example, scantily-clad women tend not to feature on billboards promoting beer brands. Instead, a man in a suit is portrayed sipping a refreshing cold lager, or more often than not the ad shows just a giant bottle and glass.
According to a 2010 report by the Pew Forum on Religion & Public Life, the number of Muslims living in Sub-Saharan Africa rose 20-fold from 1900 to 234 million.
Christianity has grown at an even more blistering pace, with numbers soaring almost 70-fold over the same period of time to 470 million from just 7 million.
And in the case of Christianity, much of this growth has been concentrated in Pentecostal churches and other evangelical denominations which, like Islam, tend to frown on alcohol.
The Pew survey also questioned people in 19 African countries about their views on alcohol consumption and found that majorities in all but 3 countries - Cameroon, Chad and Democratic Republic of Congo - found it morally objectionable.
"Views on this issue are related to how religious a person is," said Neha Sahgal, a Pew research associate.
"What we found is that in most of the countries those who pray several times a day are more likely to find drinking alcohol morally objectionable than those who pray less," she told Reuters in a phone interview.
RELIGIOUS AND THIRSTY
Against this backdrop of piety, the conservative approach to advertising seems to be working.
Home to some of the world's fastest growing economies, Africa's thirst for beer and spirits is surging: analysts estimate beer volumes rose around 7 percent last year. Excluding the mature South African market, growth reached more than 10 percent.
Drinks companies want to maintain the momentum.
SABMiller is investing up to $2.5 billion over the next five years to build and renovate breweries on the continent. African sales of rival Diageo, the maker of Guinness, have risen by an average 15 percent in each of the last five years, accounting for 14 percent of the group's total.
Nigeria's 160 million people are now the world's second biggest consumer of Guinness, after Britain, and analysts expect it to take the number one slot within a couple of years. Cameroon, with a much smaller population of around 20 million, is the fifth biggest.
In Nigeria, Africa's most populous country, which is evenly divided between Islam and Christianity, church and mosque numbers are exploding alongside beer consumption.
Beer turnover in Nigeria is growing faster than its economy.
"At the moment, beer consumption is about 19.5 million hectoliters in 2012 and growing at about 8-9 percent per annum," said Esili Eigbe, an analyst at Stanbic IBTC, who covers the brewery sector.
A number of factors could explain this.
Africa's population is young and many of the region's converts find their religious zeal only as they grow a little older. In any case, most people's drinking peaks in their 20s.
And a lot of Africans, like a lot of people on other continents, are both religious and thirsty.
"People's sense of morality sometimes doesn't correspond with their behaviour. This is not unique to Africa," said Sahgal, an expert on polling on religious issues.
Some Africans are perfectly comfortable with this fact.
"Islam advises against alcohol but does not force you. I drink to help me relax after a hard day's work," said Wasiu Abudu, a 42-year-old auto mechanic who lives in Lagos.
The vice president of Forbes media says the launch of the Forbes Afrique magazine is a sign of better business possibilities in Africa. Christopher Forbes said his organization is celebrating free enterprise and the entrepreneurial spirit following the official launch of the Forbes Afrique magazine.
“We are at a unique moment in time [and] there [are] a lot of exciting things happening in Africa. And also things aren’t going so well in the rest of the world that we can’t keep pointing fingers saying we know best,” Forbes said in Brazzaville.
“The moment is right for a magazine like Forbes to be launched here, where we celebrate free enterprise and the entrepreneur spirit because we are seeing that emerge in francophone Africa and in fact throughout Africa.”
He said some African countries are becoming less volatile, which he said is a better environment for business development.
“There is greater stability here, the rest of the world have realized that we didn’t always get it right doing some of the other things that we’ve done. There are natural resources here, but there is also a change in mindset here,” said Forbes.
Some analysts say Forbes Afrique could face stiff competition from other French language magazines with deeper roots in the francophone countries of Africa.
Forbes magazine has an African English version published in South Africa. But, Mr. Forbes said it was appropriate that French-speaking African countries to have a magazine that addresses business aspects in francophone Africa.
“French speaking Africa needs the capitalist tool as well,” Forbes said.
Officials of the magazine say Forbes Afrique’s readership will include policy makers and business people and everyone whose ambition drives them to reach positions of responsibility in the business world.
But Forbes also warned potential investors to make sure they work with reputable businesses in Africa.
“Choose your partners carefully,” he said. “We are very lucky in our partner Mr. [Lucien] Ebata. I think that’s a key thing. Get the best advice and get to know people on the ground.”
“It isn’t [only] that these resources can be useful for the rest of the world, they’ve got to be useful for the people living here [in Africa] as well and being enjoyed by a much broader spectrum of the population.”
He said Forbes Afrique magazine is in Africa to stay.
“When my grandfather started the [Forbes] magazine in 1917, his very first editorial was that business isn’t about pilling up millions, it’s about creating happiness,” said Forbes.
“As long as this generation of entrepreneurs will increasingly … realize that it’s not just about realizing their visions, but their visions enriching the lives of others; that is a very important part of real capitalism.”
Forbes said the business climate is getting better in African countries, which he said is encouraging to local and international partners looking to invest on the continent.
China’s official news agency hit back on Friday at suggestions by U.S. Secretary of State Hillary Clinton that Beijing is only interested in Africa for its natural resources, adding a further layer of tension to already testy Sino-U.S. ties.
Speaking in Senegal earlier this week, Clinton did not name China, but said Washington wanted a “partnership that adds value, rather than extracts it”, adding the days of outsiders taking Africa’s wealth for themselves should be over.
Xinhua news agency hit back at Clinton’s comments, saying her Africa trip was a “plot to sow discord between China (and) Africa”.
“Whether Clinton was ignorant of the facts on the ground or chose to disregard them, her implication that China has been extracting Africa’s wealth for itself is utterly wide of the truth,” it wrote in an English-language commentary.
“Ironically, it was the Western colonial powers that were exactly the so-called outsiders, which, in Clinton’s words, came and extracted the wealth of Africa for themselves, leaving nothing or very little behind.”
Clinton’s trip is partly aimed at promoting United States trade and political ties to African nations as an alternative to China, whose influence has been growing fast as Beijing works to win access to the continent’s rich cache of minerals, timber and oil.
Chinese President Hu Jintao last month offered $20 billion in loans to African countries over the next three years, boosting a relationship that has been criticised by the West and given Beijing growing clout in the resource-rich continent.
But critics say China supports African governments with a no strings approach to aid despite dubious human rights records as a means to get access to resources, a charge denied by Beijing.
Xinhua said Clinton’s “hidden agenda” in Africa was plain to see.
“As commentators across the world have pointed out, the trip is aimed at least partly at discrediting China’s engagement with the continent and curbing China’s influence there. Her remarks betrayed an attempt to drive a wedge between China and Africa for the U.S.’ selfish gain.”
While such commentaries are not official statements, they may be read as a reflection of Chinese government thinking on important issues.
West African countries - Mali, Niger and Ivory Coast have slashed or removed taxes on a range of imported basic foods as they try to contain rising food prices, which led to protests in a number of countries when they last spiked five years ago. Grain prices hit record highs on international markets in July as drought scorched crops in the U.S. midwest and Russia, prompting the UN's Food and Agriculture Organization to warn that it was concerned about prices although it did not yet see a repeat of the 2007/08 crisis.
Russia's heatwave has fuelled speculation about export restrictions in the Black Sea producer, while U.S. corn and wheat prices at times rose by 50 percent in the last six weeks and remain close to highs.
High food prices sparked riots in countries such as Egypt, Cameroon and Haiti five years ago, although the UN has pointed out supplies of staple rice are more comfortable this time.
Global food price pressures come as many in West Africa celebrate the Muslim holy month of Ramadan, which traditionally drives up prices, and as a food crisis affecting some 18 million people across the Sahel peaks with the onset of annual rains.
"I know we are in a period of rising prices, especially when it comes to basic foods like sugar. But I call on businesses to respect promises that they made with the ministry of trade," Niger's President Mahamadou Issoufou said in a speech late on Thursday, referring to meetings between the government and traders last month.
Niger has removed all taxes on imported cereals but figures produced by the country's SIMA agricultural information index showed the price of cereals was 45 percent higher in July than during the same month last year.
In markets in the dusty capital, 100 kg of millet now costs 30,000 CFA francs, up from 25,000 CFA the month before and 19,000 at the same time last year.
The same amount of maize cost 25,000 CFA francs in July, up from 19,000 CFA the month before, according to SIMA.
Saley Saidou, the land-locked nation's trade minister, blamed failed rains in Niger and the high cost of transport from ports in nations to the south, as well as world prices for the increases.
Alarm is growing that an expected fall in U.S. grain exports could cause shortages and further jumps in prices worldwide.
Niger, a uranium-producing nation that straddles the south of the Sahara, saw street protests against the cost of living during the 2007-8 food price spike.
Neighbouring Mali, which is gripped by a political crisis in the south and whose northern desert zone is occupied by a range of Islamist forces, has slashed taxes on imported rice and sugar as it too seeks to keep prices under control.
Customs and value added tax on imported rice were reduced in May to a combined 2.5 percent, down from 31.28 percent. Meanwhile, the tax bill for sugar importers has been brought down from 105 percent to 2.5 percent.
The move is a welcome relief for a country seeking stability after a March coup precipitated the fall of the north to a mix of rebel forces.
"This year I was surprised to buy a kilogramme of sugar even cheaper than the price fixed by the authorities," said Moussa Doumbia, a stonemason. "Long may it continue."
Even top cocoa grower Ivory Coast, which with its ports is spared the same costs of transporting goods hundreds of kilometres north towards the Sahara but is still recovering from months of post-election violence last year, has been forced to act.
The government this week temporarily suspended all taxes on rice imports, estimated at some 900,000 tonnes a year, denying the government some 7 billion CFA in revenues.
"This decision was taken as the government wants to maintain the price of rice at a level that corresponds to the purchasing power of the Ivorian population," government spokesman Bruno Kone said after a cabinet meeting on Wednesday.