By: Global Compact for Migration
By: Global Compact for Migration
By: Richard Karlgaard August 24, 2016
By: Vitor Gaspar & Luc Eyraud April 14, 2016
Driving factors for national competitiveness in Africa as measured by GDP per capita
By Neil Andrews
Source: http://repository.up.ac.za/handle/2263/43965 November 10, 2015
Competitiveness has been part of central, monetary policy making for over 500 years where regions have aimed to improve competitiveness and productivity by focusing on specific factors. The focus of the research was to identify which factors are most relevant for the African continent on determining competitiveness which will allow policy makers to understand how best to direct their investment with the greatest productivity return. The research methodology was quantitative in nature, based on secondary data from the Global Competitiveness Report over the past five years. The sample included 39 of the 54 African countries which are the countries on which the report collected data from. The unit of analysis was GDP per capita. A multivariate Generalized Linear Model with a log link function and Gamma error structure was built. The results showed that the order of importance for Africa was macroeconomic stability; infrastructure; technological readiness; and market size with the other factors not having a material influence. Building a similar model on all the countries have included two additional factors namely health and primary education as well as higher education and training. This indicates that certain structural factors are more important for countries in the developing phase such as Africa.
Africa, human capital, economic growth
“Wachira Kigotho unpacks the African Union’s hard-hitting AU Outlook on Education Report 2014, which accuses governments of not making education a priority, and a related study that charts expansion and reversing of the gender gap in higher education in the Maghreb. – Two aspects of the ‘American Dream’ have been sold abroad – the instrumentalist idea that education provides tools to achieve success (money) and a more liberal notion that stresses a broader view of the value of education, writes Jason Scorza in Commentary. Both are needed to give students a good chance in a competitive world.”
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Africa rising – economic growth : “Underscoring the “Africa Rising” narrative, the AEO 2014, published by the African Development Bank, the OECD Development Centre and the United Nations Development Programme, portrays a continent buoyed by the robustness of its critical development indices that have bested global averages in recent years. According to the publication, Africa grew by about 4%, on average in 2013, compared to 3% for the global economy. Growth, however, has been marked by wide variations across regions and income groups. Sub-Saharan Africa performed better posting 5% growth in 2013 and projected to reach 5.8% in 2014. East and West Africa recorded the fastest growth, above 6%, while the low-income countries also recorded growth of above 6%, compared to the below 3% growth recorded by the upper-middle-income countries in North and Southern Africa. “Africa’s medium-term growth prospects have improved, on the back of broader political and social stability at home and recovering economic conditions abroad. In some countries and regions, growth is projected to return to levels last seen before the onset of the 2009 global recession,” the report said.
External financial flows to Africa are also on the rise and expected to surpass US $200 billion in 2014, four times their 2000 level in response to the growing investment opportunities on the continent”
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Transnet SOC Ltd., South Africa’s state-owned ports and rail operator, picked four companies to supply new locomotives as part of a $4.7 billion investment to renew its aging fleet and boost capacity.
rail infrastructure – ” More than two-thirds of Transnet’s capital expenditure will be used to renew and expand the company’s freight-rail infrastructure. The new locomotives, to be deployed on the general freight lines, will cut the average fleet age to 22 years from 33 years.
Domestic Manufacturing – South Africa has general transportable freight of about one billion metric tons a year, including commodities, Gama said in an interview today. The unit is targeting a freight market share of 25 percent by 2022 compared with 15 percent now.
“It’s a game changer for us,” Gama said. “It is going to assist us tremendously not only in road-to-rail strategy, but also helping with building South Africa’s industrial capacity.”
To create jobs and develop expertise, South African state-owned companies in the past favored suppliers who committed to manufacturing major parts of their offerings domestically. The investment is expected to contribute over 90 billion rand to the local economy and create about 30,000 direct and indirect jobs, Molefe said.
GE, based in Fairfield, Connecticut, already built 143 locomotives for Transnet at a South African factory, according to the rail operator. The Export-Import Bank of the U.S. backed a 1.1 billion-rand loan to Transnet to pay for the engines, the company said in September. Transnet in 2012 also agreed to pay CSR Zhuzhou 2.6 billion rand for 95 locomotives. The contract awards will help Transnet in being a supplier of locomotives to the African region, according to its CEO.
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How much longer can major economies like the U.S. engage in historically unprecedented levels of monetary and fiscal stimulus that provides, at best, levels of economic growth so unimpressively marginal?
Economic slowdown – : “International Monetary Fund has cut its forecast for 2013. In July, the IMF projected global GDP growth for the current year of 3.2 percent; this has now been cut back to only 2.9 percent, despite the continuation of massive fiscal and monetary stimulus by sovereigns and central banks throughout the world.
For 2014 the IMF now projects global economic growth of 3.6 percent, a reduction from an earlier forecast of 3.8 percent. These reductions come despite the IMF boosting its projection of economic growth in the UK. Contrasting with so-called “green shoots” that some pundits have pointed to since 2009, there continues to be an avalanche of bad economic data throughout the world; supposed economic recovery in one region or country is offset by worsening news elsewhere. In the meantime, central banks throughout the world, and especially in developed countries, continue to flood the globe with unprecedented levels of liquidity, all conjured out of thin air. Without this radical level of monetary easing, the already anemic levels of economic growth, typically substantially below the proportion of fiscal deficits to GDP in many sovereigns, would almost certainly collapse. – According to the IMF, a slowdown in economic growth in major emerging markets, in particular China, Russia, India and Mexico is creating a drag on overall global economic expansion. This seems almost a reversal from the onset of the crisis in 2008, when the United States was the major driver of the global economic and financial crisis and China viewed as the primary savior. The IMF now sees the U.S. as being the sovereign most pivotal for facilitating global economic growth, in the wake of the slowdown in China and other major emerging economies.”
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