Global Competitiveness Report (GCR) 2014-15 has been released and Botswana’s ranking remained stable at 74th place out of 144 countries and, fourth in the region behind Mauritius (39), South Africa (56) and Rwanda (62). Though the country’s position has not changed, it has improved in quality scores from 4.1 last year to 4.2 this year out of a maximum of score of 7. The comparative rankings are 74th for 2013/14; 79th for 2012/13; and 80th for 2011/12.

This Report is one of several Competitiveness publications produced by World Economic Forum in collaboration with the Botswana National Productivity Centre (BNPC). The report was released under the theme ‘Accelerating a Robust Recovery to Create Productive Jobs and Support Inclusive Growth’.

The Global Competiveness Index is a composite of 12 pillars. These are pillars on institutions, infrastructure, macroeconomic environment, health and primary education, high education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation. Out of these we have improved in four (4), namely, macroeconomic environment, labour market efficiency, technological readiness and market size, while we have not made any significant improvement in the areas of goods market efficiency and innovation.

As in the previous report, Botswana’s strong performance is on the macro-economic environment. This is mainly due to a balanced fiscal budget. The report reveals that there is still relatively more efficient government spending, low levels of corruption and efficient legal framework for settling disputes and challenging regulations in the country.

There has been a marked improvement in the labour market efficiency component ranked 36th from 47th last year. This is mainly due to an improvement in the labour-employer relations, flexibility of wage determination and the country’s capacity to attract talent which has been made easy by adjustments of some immigration regulations.

Improvement in the mobile broadband subscriptions from 16.6% to 74.1% resulted in a huge improvement in the technological readiness pillar. This is mainly attributed to the provision of up to date data by relevant authorities.

Despite the above achievements, the country is still in the transition stage from factor-driven economy to an efficiency driven stage of development. This is partly explained by the continued reliance on primary exports and below-average performance in areas such as goods market efficiency (97th), infrastructure (101st), business sophistication (116th) and innovation (102nd).

The health and primary and higher education and training are other areas of concern, particularly for a middle-income country in transition to becoming an efficiency-driven economy. Education enrolment rates at all levels remain low by international standards, and the quality of the education system is ranked low. According to this report the biggest challenge facing Botswana in its efforts to improve its competitiveness remains its health situation: the country registered one of the highest rates of HIV and one of the lowest life expectancies in the world.

Efforts to address poor work ethic in the national labour force have not borne much fruit yet, as the issue is still considered the most problematic factor for doing business in the country. On a positive note, however, the intensity of the problem has declined. The percentage of respondents rating poor work ethic as the most problematic factor for doing business declined from 20.7% to 18.5%.

Overall, Sub-Saharan Africa continues to register impressive growth rates close to 5%. Maintaining the momentum will require the region to move towards more productive activities and address the persistent  competitiveness challenges. Overall, the biggest challenges facing the region is in addressing human and physical infrastructure requirements that continue to hamper productive capacity and competiveness.

It also highlights talent and innovation as two areas where leaders in the public and private sectors need to collaborate more effectively in order to achieve sustainable and inclusive economic development.

(By Dorcas Makgato-Malesu,  Minister of Trade and Industry)