Sick workers, bad roads to hurt Rwanda’s competitiveness – Report

Low secondary school enrollment remains one of the main challenges. (file photo)

The global competitiveness report has warned that an unhealthy workforce along with poor infrastructure will hurt Rwanda’s competitive­ness ambitions.

According to the report, “The greatest challenges facing Rwan­da in improving its competitive­ness are the state of the country’s infrastructure, its low secondary and university enrollment rates, and the poor health of its work­force.”

Despite the damning verdict, the 2012/2013 global competi­tiveness report ranks Rwanda as one of the best in the world, Af­rica and the best in the region.

Rwanda’s ambition to be the first choice for investors in Africa will take great lessons from the new report which saw it move seven steps to be ranked 63rd in the whole world.The new rank­ing has effectively placed Rwan­da the third most competitive economy on the continent after South Africa and Mauritius who have been ranked 52nd and 54th respectively.

“We are delighted at the feat and though it is almost impos­sible to beat those two, we are not saying we cannot,” said Finance Minister John Rwangombwa.

The impressive ranking does not however reflect the rest of the East African Region which has been portrayed as largely uncom­petitive.

In ranking the economies, the GCI uses 12 key indicators, which it then categorizes into three including basic infrastructure indicators, efficiency enhancer’s indicators and innovation and sophistication indicators.

Globally, the index ranks Ke­nya at 106th, Tanzania-120th, Uganda, 124th while Burundi emerged last at 144 as the most uncompetitive economy in the world.

In ranking the economies, the GCI uses 12 key indicators, which it then categorizes into three in­cluding basic infrastructure in­dicators, efficiency enhancer’s indicators and innovation and sophistication indicators.

Under the basic infrastructure indicators, the GCI takes a close and analytical look at a country’s level of institutional soundness, infrastructure, micro-economic environment and health and pri­mary healthcare.

The score still indicates East Af­rica lags behind and that though Rwanda still is the best, its own score is not impressive.

The index ranks Rwanda at 70th with Tanzania settling for the 122nd rank in second position for the region. Kenya is at 123, Uganda at 132 while Burundi is placed second last over all glob­ally and last regionally at 142nd rank.

The general impression given by the GCI is that the East Afri­can region has a lot to do to im­prove the basic conditions for in­vestment in order to sustain their economic growth and also give the five-state integration an at­tractive outlook for investment.

This will call for more efforts to grow institutions, invest in in­frastructure and primary health­care for their people which will in turn ensure stable macro-eco­nomic conditions.

When it came to the second category of the GCI pillars, effi­ciency enhancer’s indicators, the index analyzed the economies’ higher education and training standards, level of goods mar­ket efficiency, labour market ef­ficiency, financial market devel­opment, technological readiness and market size.

This time, Rwanda (94th)was beaten by Kenya (76th) while Burundi (144th) emerged over all last.Uganda was 104th

There’s even a huge gap be­tween Singapore which was ranked first under this category and Africa’s best, South Africa at 34th and Mauritius 62nd.

The third and final category which concerns innovation and sophistication factors also indi­cates that East African econo­mies are still in a slumber.

Kenya emerges best in East Af­rica at 56th rank globally, Rwan­da 60th, Tanzania 92nd, Uganda 101stwhile Burundi is placed at 142nd rank.

Rwanda’s strong points, the index notes, are its strong and relatively well-functioning insti­tutions, with very low levels of corruption, and a good security environment.

The index also praises its la­bor markets as efficient with its financial markets as relatively well developed.

However, the index raises se­rious health concerns charac­terized by a high prevalence of communicable diseases contrib­uting to the low life expectancy of less than 57 years and reduc­ing the productivity of the work­force.

Uganda’s corruption levels and weak macro-economic poli­cies have been identified as a major threat to its competitive­ness ambitions.

Burundi will need the help of everyone to improve as it ranks last in all three categories of the 12 key pillars.

Posted by Kenneth Agutamba on Sep 10 2012. Filed under Business, Daily News, National. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.