Top 10 African Countries - Business

Which Are Africa’s Most Competitive Countries?

Africa is known in the world as the continent of contrasts. Its population is particularly impressive with more youths than most other continents. But this also means that the people getting into the workforce on a daily basis are also numerous. This would require the continent’s level of development to keep up so as to provide opportunity to these youths.

There are certain countries that have made it a full-time job to raise productivity and competitiveness in their spaces. Some have in fact made it to impressive positions on the global competitiveness report. They have provided better facilities for the growth of their populace and helped them increase in knowledge and thrive as a result.

The following are the top 10 economies on the continent according to the global competitiveness index for 2017:

Country GDP for 2017 (in millions) Rank
South Africa 761,826 1
Rwanda 24,717 2
Botswana 39,054 3
Morocco 300,556 4
Algeria 634,746 5
Namibia 27,451 6
Tunisia 136,797 7
Kenya 164,340 8
Ivory Coast 95,887 9
Gabon 36,999 10

The top country South Africa is actually ranked in the 47th position in world economy ranking. This is clear evidence of the fact that the continent is lagging behind in productivity levels in spite of sustained growth over the past decade.

However, the fact that South Africa is able to set itself apart from its counterparts is proof that it can be done. It clearly shows that the country’s leader have identified to obstacles that stand in the way preventing the rest of the continent from moving at the global pace. While many countries worsened in the wake of the monetary meltdown during the first decade of the century, South Africa established its position – mainly as an outcome of the country’s careful monetary and fiscal policies.

This country has shown remarkable consistency and has held the continent’s top position for a reasonable period now. Its progress can be attributed to the efforts made to build a steady infrastructure to encourage trade, streamlining the local and international market for goods and focusing on the health of its workforce. The country has a stable political environment, plentiful natural resources, a strong production base, and a managed banking system.

Rwanda and Botswana have also shown a remarkable level of resilience and growth. Judging from their previous year’s performance, they have both taken a few steps forward. Taking a closer look at these two countries reveals a keen interest in technology, greater attention on institutions and stability in the financial markets.

Rwanda is rated as the most competitive country in the East African Community. Its past record on the world economy ranking shows that it has been making steady steps in the right direction. It has been gradually moving up by a few steps every year suggesting that it must be doing something right.

Its greatest improvement was recorded on the innovation aspect. It also has good security, very low corruption levels, low government wastefulness in terms of spending and is renowned for being one of the easiest places to start a business. This is a sharp contrast to most of the African continent where corruption is rampant and has seeped into every aspect of life. Rwanda offers clear lessons for all countries that are keen on moving forward.

Based on the World Economic Forum’s report of 2017, Botswana is ranked in the 64th position worldwide. Good governance and well managed finance resulted in a notable budget surpluses. The investment friendly policies attract a huge foreign businesses and investments. The reasons behind continuous economical success of Botswana are the developed financial sector, an entirely independent central bank, strong property protection rights, and competitive tax rates.

An Overview of the African Economy 2017

Overall, the year 2017 has shown improved economic performance for the African continent. The GDP in 2016 was 2.2%, and this has seen a marked improvement to 3.0% in 2017. Analysts predict that the momentum should hold for the coming year placing the 2018 GDP at 3.7%. The previous year’s predictions did not materialize as the expected GDP was 3.4% for 2017.

It is an improvement nonetheless and experts have put forth their opinions on likely causes for the growth. One of these is the fact that the global economy experienced a significant recovery during the year. The commodity price bust that rocked 2016 bottomed out and the continent’s export performance improved remarkably. There was also a level of stability in the local demand, higher government investments in infrastructure and increased government revenues reducing the debt burden.

In a few countries however, conditions are still not ideal for economic growth. Nigeria for instance should be at the top of the charts. But due to regulation rigidity surrounding foreign exchange liquidity, the country’s financial sector is struggling. Cocoa prices have affected West African countries like Ghana and Cote d’Ivoire which should have performed a lot better.

East African countries on the other hand have grappled with drought for most of the period. This has led to famine in South Sudan and Somalia and decreased the productivity of Kenya severely impacting its economic growth. Inflation remains a key problem in Mozambique, Nigeria, Angola and the East African countries as a result of the aforementioned drought.

A Look at the Education Sector

The fact that education systems differ from one country to another makes it hard to compare performance. However, education is the most important factor to prepare global competitiveness report. There are a few basic standards that a literate population needs to meet. Literacy is one of the key features of any promising economy. It leads to economic success, personal development and social progress. This is the only route to growth since individuals are able to increase personal or household income and raise their families from the pits of poverty.

The relationship between education and overall development is clearly evident from a number of countries on the African continent. Let us take a look at the 10 most educated countries in Africa:

Seychelles

This country not only boasts a 95% literacy level. It also happens to be the only one on the continent that met all of the UNESCO objectives with regard to education. These were:

  • Free primary school education
  • Improved childhood education
  • Improved quality of education
  • Improved literacy levels
  • Gender equality in schools
  • Better education approaches for youths and adults

The country has an impressive track record spanning back as far as the 1980s when adult literacy classes began. The freed education system also began that early and it is therefore no surprise that the country qualifies for top position.

Equatorial Guinea

Equatorial Guinea also boasts a 95% literacy level just like Seychelles. This is rated for both genders for all of its citizens above 15 years of age. But the country has paid particular attention to the youth. In fact, the literacy level for those between 15 and 24 years of age is 98%. Childhood education in the country is also fast gaining momentum with the past year recording over 70% enrolment rates for preschoolers. This means that a decade or two down the line the country might register even more impressive reports.

South Africa

This country also has a 95% literacy rate. However, reports indicate that the younger portion of the populace is experiencing a decline in terms of education. It is surprising that almost 30% of fourth graders are illiterate and almost 50% lack comprehension skills. One of the greatest problems accounting for this deficit is the aspect of multilingualism. The local school curriculum teaches the first three years in indigenous languages. Then when students get to their fourth year they make the switch to English.

At this level, they are not good enough in the local languages and are even worse in English. This makes it very hard for them to achieve literacy. This issue needs to be addressed if the country is to sustain its current literacy levels.

Sao Tome and Principe

This country has a 92% literacy level with all individuals over the age of 15 being able to read, write and comprehend. This is a marked improvement based on the record from a decade back. In 2008, the literacy level was only 69%.

The improvement can be attributed to modifications in the education system. It has been able to do this after the government increased its budgetary allocation for the education system. It also made the primary level of education mandatory and this clearly helped propel it to the top.

Libya

This country has had to take bold steps to get to the 91% literacy level that it currently holds. In the early 1920’s only 2% of its population was literate. But the government made an effort to improve this situation. Basic education was made compulsory for the youth and adult literacy classes were popularized. More than one million Libyan children enjoy advantages from the special free education provided by lots of public schools. Education as a basic human right is compulsory up to 9th grade. Primary education is regulated by strict laws and parents are frequently prosecuted in Libya if their children don’t go to school.

Namibia

Namibia also holds 91% literacy levels. This is a marked improvement from around 89% in 2011. Namibian government has taken several steps to ensure education for every person avoiding gender discrimination. The country offers 10 years free education between 6 and 16 years of ages and it is compulsory. The Constitution contains strict instruction that Namibian people will enjoy free primary education. The local Ministry of Education takes the crown for the improved literacy rate because its National Literacy Program has to be a major factor behind the growth. The country also has a significant budgetary allocation, about 30% being exclusively dedicated to education.

Cape Verde

This country boasts a literacy level of 88%. Its growth has been steadily advancing since the year 1975 when the current educational system came into play. Even though in 1990 the country only reported a 62% literacy level, it has toiled day and night to get to its current position. Primary education is compulsory in Cape Verde for the children ages between 6 and 14 years. Cape Verde also provides free primary education for the children ages between 6 and 12.

Botswana

Botswana also has 88% literacy level thanks to the government’s initiative to commit to the education sector. Education is mandatory for the children of specific age range beginning from five and ending to sixteen. Secondary education is not compulsory and not free in any ways. It also has a National Literacy Program in place that is assisting young and old to join the bandwagon. It has been reaching out to adults in particular since 1977 and has enjoyed great success.

Swaziland

Swaziland enjoys literacy levels of 87% and shows one of the greatest improvements over the past few decades. For instance, in the late 1970s only 55% of adults could read and write. But the figure is now so much higher. Primary education is not compulsory in Swaziland, but is entirely government-funded. School-going children receive textbooks, exercise books, stationary, and meals free of charge.

Zimbabwe

In the list of 10 most educated countries in Africa, Zimbabwe is positioned at 10th place. The African Economist’s report shows that Zimbabwe is leading the African continent with a praiseworthy literacy rate of 87%, it is equal to Swaziland. With an average literacy improvement of 3.79% per year, the country is one of the most educated countries in Africa. Education has been declared as the basic human right after the independence and currently, the government has invested heavily to spread the education all over the country.

What the Future Holds for Africa

The year 2017 has seen a significant slowdown in the global economic scene. It is interesting to note that in spite of this global trend, a few countries in the continent of contrasts have managed to score a win on the global competitiveness index. This shows that there is still hope for long-term growth on the continent.

The foreign investment rate and the repetition of investment are noticeably higher in Africa than other developing parts of the world. Global businesses are surely receiving extended profits from this region and therefore, the investors are giving more attention to African countries.

The current agenda of transformation in a majority of countries is one of the key avenues that will lead this growth. This coupled with the demographic advantage and the slow but sure industrialization process will make a great impact.

Global competitiveness report shows that the continent comes only second to Asia in terms of urbanization rates. This is highly promising as most of its development woes revolve around infrastructural weaknesses. In the next two decades, the region is likely to be predominantly urban and this will mark a major turning point. Already, there is a noticeable change in infrastructural development of many countries.

Urbanization is the only way the continent can hope to improve in terms of industrialization. This is in fact the only region in which the two are not taking place concurrently. However, if the current urbanization trend keeps up, it will only be a matter of time before industrial growth starts to pick up pace. Though this might call for a complete overhaul of the current policy frameworks, the little steps that a few countries like Rwanda are taking are reassuring.

Growth projections for most of the continent are reassuring. The biggest economies of the continent are expected to enjoy accelerated growth right from the first quarter of 2018. Nigeria is expected to bounce back as a result of increased oil production and greater security in the oil-rich zones. Ghana is also expected to benefit from an increase in gas and oil production resulting in better export statistics and more stable electricity production locally.

In countries where natural resources are not as significant, the trend is still expected to remain solid. The agricultural sector in particular should recover as the dry spell comes to an end. The two factors will work effectively for every country – a strong labor force and speedily technological change will help to sustain the current growth. Even the proper use of those will unlock growth and eliminate lots of limitations. Ultimately, African countries will continue with a positive economical, educational, and social change.

Make the Most of the African Economy with WaystoCap

The global competitive report inspires hope in this continent. The countries that have fought to create a name on the global scene are sufficient proof of the unharnessed potential on the continent. But in order to take advantage of this potential you need an experienced partner to take your hand. WaystoCap is here to do that and much more.

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We have been in the business long enough to have a thorough grasp of the continent and its unique trends. So join us on this amazing journey and make the most from all that Africa has to offer.

References:

https://www.weforum.org/agenda/2017/05/africa-most-prosperous-countries/
http://www.rdb.rw/news-pages/news-details/article/rwanda-most-competitive-economy-in-east-africa-3rd-in-africa.html
http://www.worldatlas.com/articles/the-10-most-literate-countries-of-africa.html
https://www.uneca.org/publications/economic-report-africa-2017
http://www.africanbusinessreview.co.za/finance/3033/Africas-economic-outlook-improves-in-2017
“Report for Selected Country Groups and Subjects (PPP valuation of country GDP)”