The World Economic Forum (WEF) has just released the Global Competitiveness Report 2016/17(GCR). The theme for this year’s Report is “Declining Openness a Major Threat to Global Competitiveness”. The GCR 2016-2017 finds declining openness to be threatening growth and prosperity. It reports that a ten-year decline in the openness of economies at all stages of development poses a risk to countries’ ability to grow and innovate.
In this Report Botswana is ranked at #64 out of 138 countries which is a notable improvement from the previous year where the Country was ranked 71 out of 140 countries. The quality score has also improved from 4.2 to 4.3 out a total of 7. These results are worth celebrating as the country has moved 7 places up and the improvement comes at a time when Botswana is celebrating its 50 years of independence.
The good news about this performance is that, Botswana’s competitiveness has improved in almost all the twelve pillars used by WEF to assess competitiveness. A notable improvement is on the Goods Markets Efficiency pillar, jumping from 95th (in 2015) to 73rd in 2016. The Report indicates that local competition has intensified and anti-monopoly policy is starting to be effective (jumping from 71 to 63). The degree of Customer Orientation and buyer sophistication has also improved modestly.
There has also been some improvement on the Higher Education and Training pillar with a ranking of 88th compared to 100th last year. This is attributed mainly to the improvement in the tertiary education enrolment rates, quality of the education system and internet access in schools.
The establishment of the Innovation Hub is now starting to show some results as the Innovation Pillar has improved from 102 last year to 84 this year. Though the quality score of this Pillar is still low at 3.2 out of 7, the Hub’s efforts are worth celebrating. The Report shows that there has been some improvement in the Capacity to Innovate, Company Spending on Research and Development and University-Industry Collaboration in Research and Development. Initiatives linked to the likes of the Human Resource Development Council Research and Innovation Grant probably contributed to this improvement.
Botswana’s Macro-Economic Environment is still considered among the best in the world ranked in the top 10 countries. In addition Botswana has been doing well in the Institutions pillar for the past 6 years. This year, the latter is ranked 37 as in last year. This may indicate however, that more effort needs to be made to improve this area as it is stagnant. There is some improvement in the infrastructure pillar (from 96th to 90th). This is mainly due to the improvement in the air infrastructure, mainly the completion of the Sir Seretse Khama International Airport and the Francistown International airport.
In the Health and Primary Education pillar, there has been some notable improvements in both the quality score (4.5 to 4.7) and the ranking (119 to 113) compared to last year. Though there has been some great improvement in the life expectancy from 47.4 years to 64.4 years, this is still considered among the lowest in the world. Overall this pillar remains an area of main concern in the Report and has rankings that put the country amongst the lowest performers. Tuberculosis incidence and its impact on business are still very high. HIV prevalence rate (25.2%) and business impact of HIV/AIDS are also still very high.
Although Poor work ethic in the national labour force continues to be the most problematic factor for doing business in the country, the severity of this problem, however has significantly dropped from 19% last year to 16.2% this year. There has also been a significant drop in the intensity of inefficient government bureaucracy from 12.7% to 9.5%. Access to financing has moved up as the second most problematic factor this year followed by inadequately educated workforce.
Beyond 50 years of Independence, Botswana has to leverage on technology and innovation in order to enhance business sophistication. A business sophisticated economy tends to be innovative, productive and competitive in nature. Thus private sector involvement and active participation in the development of Botswana is very important.
For the eighth consecutive year, Switzerland ranks as the most competitive economy in the world, narrowly ahead of Singapore and the United States. Following these two is Netherlands and then Germany. The latter has climbed four places in two years. The next two countries, Sweden (6th) and the United Kingdom (7th) both advance three places, with the latter’s Global Competitive Index score being based on pre-Brexit data. The remaining three economies in the top ten are Japan (8th), Hong Kong SAR (9th) and Finland (10th) all move backwards.
In sub-Saharan Africa, Rwanda is one of the most improved nations moving 6 places to 52nd. It is closing in on the region’s traditionally most competitive economies, Mauritius and South Africa, although both these countries register more modest improvements, climbing to 45 and 47 respectively. Lower down the rankings, Kenya climbs to 96, Ethiopia holds steady at 109 while Nigeria slips three to 127.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.
African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).
AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.
The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.
The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.
To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”
Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.
The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.
“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.
“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.
The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.
About the World Economic Forum Annual Meeting 2023
The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,