thiopia Moves Up Competitiveness Index

Ethiopia Moves Up Competitiveness Index


Financial Times June 23, 2000


By Tony Hawkins in Durban



Kenya's steep decline and Ethiopia's surprising resurgence are the two main features

of the World Economic Forum's Africa Competitiveness Report published yesterday.


The report, compiled by the Harvard Institute for International Development in

co-operation with the Geneva-based World Economic Forum, is the second of the

series to be published.


Professor Jeffrey Sachs of Harvard University, who masterminded the survey, said

the main determinant of whether countries moved up or down the league table

appeared to be politics.


Countries such as Nigeria, Malawi and Tanzania which had moved up reflected a

general sense of an improved political climate for business, while businesspeople

surveyed for the report had given such countries as Kenya and Zimbabwe the

thumbs down.


The number of countries ranked has been increased to 24 from 23 in 1998, with the

inclusion of Senegal and Madagascar and the dropping of Angola, ranked bottom

two years ago.


There is a change at the top, where Tunisia takes over from Mauritius, but the other

top rankings are unchanged, dominated either by small southern African economies,

Botswana and Namibia, or by North African countries Morocco and Egypt.


South Africa remains in seventh place despite a small decline in its "improvement



The biggest gainer by far is Ethiopia, up six places from 17 to 11. Sub-Saharan Africa's

second largest economy, Nigeria, is up two places at 20. While Malawi also edged



Kenya tumbles nine places to 22 from 13, and Zimbabwe drops three places to 29,

second from bottom and behind both Nigeria and Malawi.


Ivory Coast, also hit by political instability, is down four places at 15 and Burkina

Faso six at 21.


The report notes that Kenya and Zimbabwe are countries where the political

leadership has been in office for more than 20 years. Both countries are fraught with

growing internal dissension and demands for further democratization.


In this assessment, professor Sachs describes the "democratization" of Nigeria as the

most important place of good news in Africa since the 1999 report.


The deepening of democracy in both Senegal and South Africa is "also noteworthy"

he says while the progress, "albeit inadequate" of debt relief is another place of good



But the Africa Competitiveness Report warns that news from much of Africa is

bleaker than two years ago. The "shocking extent" of the impact of HIV/Aids is

becoming clearer, with Africa now home for two-thirds of the world's infected people,

while the region continues to be ravaged by civil strife.


Mr. Sachs warned that Africa would become even more marginalized unless

"switched on" to e-commerce.


The report's improvement index-measures the direction and extent of change between

1996 and 1999 according to businesspeople is led by Tanzania, followed by

Morocco, Mozambique, Nigeria and Uganda.


The losers in this index include some surprises, especially Mauritius and South

Africa, but the biggest decline by far is in Zimbabwe.


Financial Times 22/06/00