The Africa Competitiveness Report 2015 comes out at a promising time for the continent: for 15 years growth rates have averaged over 5 percent, and rapid population growth holds the promise of a large emerging consumer market as well as an unprecedented labor force that — if leveraged—can provide significant growth opportunities. Moreover, the expansion of innovative business models, such as mobile technology services, is indicative of the continent’s growth potential.
However, Africa continues to be largely agrarian, with an economy that is underpinned by resource-driven growth and a large and expanding informal sector.3 Indeed, more than a decade of consistently high growth rates have not yet trickled down to significant parts of the population: nearly one out of two Africans continue to live in extreme poverty, and income inequality in the region remains among the highest in the world. What is more, across sectors—from agriculture to manufacturing and services — productivity levels remain low. It will be necessary to raise productivity across all sectors of the economy to achieve higher growth and create quality employment, and turn this progress into sustainable and inclusive growth.
This year’s Report leverages the expertise and research that has been carried out by its partner organizations—the African Development Bank, the Organisation for Economic Co-operation and Development, the World Bank, and the World Economic Forum—to explore how best to transform Africa’s economies. It is based on the assumption that increased competitiveness—by definition—is a critical driver for structural transformation and broad-based growth. By competitiveness we mean all of the factors, institutions, and policies that determine a country’s level of productivity. Productivity, in turn, sets the sustainable level and path of prosperity that a country can achieve.
Against this backdrop, the Report begins with an overview of the region’s current economic structure and moves on to outline the competitiveness challenges it now faces.