Strongest economies in Africa

Despite growth averaging more than 5% a year since the turn of the century, sub-Saharan Africa’s economies remain largely noncompetitive: only three of the region’s countries – Mauritius (46th), South Africa (49th) and Rwanda (58th) three – rank in the top half of the 2015-2016 edition of the Global Competitiveness Index, and they occupy 15 of the bottom 20 places.

In general, the region has made progress in efficiency-enhancing market reform, especially in goods market, but has much more to do to improve its institutions, infrastructure, and health and education sectors, all areas in which reforms will take time to reap benefits. With a coming youth bulge – by 2035, more people will be reaching working age in sub-Saharan Africa than in the rest of the world put together – the need to improve education systems is especially urgent.

The recent fall in commodity prices, putting more pressure on many countries in the region, has also accentuated the need to prioritize competitiveness-enhancing reforms.

Mauritius. Although still the top-ranked country in sub-Saharan Africa, Mauritius dropped seven places to 46th (out of 140) in the overall rankings this year – the first fall down the Index after a decade of improvements. This is accounted for important drops in three of the 12 pillars (overall six pillars are losing places) on which the Index is based, labour market efficiency, financial market development and market size. Still, some fundamentals remain strong: Mauritius has the region’s most efficient goods market, best infrastructure and most healthy and educated workforce. To move further up the development ladder it particularly needs to improve the quality of higher education, the rate at which it adopts new technologies and its capacity to nurture innovation.

South Africa. Moving in the opposite direction to Mauritius, South Africa climbs seven places to 49th. It has improved year-on-year in its uptake of ICTs and established itself as the region’s most innovative economy. South Africa also tops the region for the efficiency of its financial markets, a pillar on which it ranks 12th globally. It performs reasonably strongly on the pillars of infrastructure and institutions, although corruption and security remain concerns, but needs to make progress on health and education.