The Botswana Institute of Development Policy Analysis (BIDPA) has expressed grave concern about the deterioration of Botswana’s rankings in the 2011/12 Global Competitive Report of the World Economic Forum. The country has plummeted four places from last year: in 2010/11 it was ranked 76 and in the 2011/12 rankings it slipped to 80. From 2008 to date, Botswana has dropped 24 places.
“This is of concern given the importance for attaining competitiveness to spearhead the attainment of major key initiatives that should transform the economy into an efficiency-driven one,” writes Dr. Grace Tabengwa in the upcoming edition of BIDPA Policy Brief.
The country was ranked against 142 countries on the 12 pillars of institutions, infrastructure, macroeconomic environment and health and primary education as basic requirements; higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness and market size as efficiency enhancers; and, business sophistication and innovation as innovation and sophistication factors.
Tabengwa says that competitive requirements for innovation and efficiency which cover pillars on labour and goods market efficiency, technological readiness and market size are crucial for attracting foreign direct investment and facilitating
“Long-term sustainable development in Botswana and diversification hinge on the diversity of exports and growth factors which depend, to a larger extent, on investment opportunities that can be realised through promoting factors that improve efficiency enhancers, technology, innovation and business sophistication,” she says.
“Botswana’s performance on the pillars for technological readiness, market size, innovation, infrastructure and higher education and training ranked about 100 each in a total of 142 countries showing the need to prioritise factors that adversely affect their competitiveness,” she notes.
Botswana does not fare very well when compared to other countries in the region such as South Africa and Mauritius. The two countries surpass Botswana’s competitiveness on technological readiness, business sophistication, infrastructure and goods market efficiency. While both countries have continued to improve in their overall competitiveness, Botswana’s competitiveness deteriorated due to a lack of improvement in the scores and ranks for technological readiness, business sophistication and innovation factors.
South Africa moved up by four places to attain 50th position this year, remaining the highest-ranked country in sub-Saharan Africa and the second-ranked among the large economies (Brazil, Russia, India and China - BRICS). The country benefits from the large size of its economy, particularly by regional standards. Mauritius is ranked 54th in 2011, up one place since last year, the second-highest ranked country in the region after South Africa.
“What is to be drawn from the comparative analysis is the need for Botswana to understudy and explore ways and mechanisms from countries that have succeeded on efficiency enhancers and innovation pillars in refining and re-focusing the
strategies and reforms for making Botswana a competitive economy,” Tabengwa says.
However, she asserts that Botswana can improve its ranking if it does a few things right.
She says that the formation of a “one-stop shop service centre” by the Botswana Export Development and Investment Authority (BEDIA) would positively contribute towards reducing time taken to starting a business and reduce the fragmentation in processes for doing business in the many institutions and government ministries; that the setting up of the Competition Authority would address issues regarding factors that affect competitiveness in the market; that technological readiness rankings can improve if Botswana puts greater focus and emphasis on the strategies towards technology advancement; and, that the creation of hubs such as the Innovation Hub, can play a leading role on ways to address some of the innovation challenges Botswana faces and speeding up the implementation of the Human Resource Development Strategy to tackle the constraints posed by lack of trained human resources and inadequately trained workforce to promote productivity and attaining a friendly investment and business environment.
“Overall, enhancing productivity and competitiveness requires a concerted effort on the part of government to provide the enabling conducive environment, the private sector and stakeholders as well as employees and employers who play a role on labour and goods market efficiency through their production process,” Tabengwa says.
BIDPA is co-founded by the Botswana Government and the African Capacity Building Foundation.