Thursday, September 29, 2022

AfDB economist says infrastructure holding back SADC growth

Although the Southern African Development Committee (SADC) region is one of the fastest growing regional blocks in Africa, there remains a number of critical aspects of competitiveness that need to be addressed in order for the region’s countries to achieve sustained growth.

Africa’s competitiveness is lagging behind Southeast Asia, Latin America and the Caribbean. However, since 2010, these improvements have come to a near standstill across a number of African economies.
The areas in which the gap is most evident are those of quality institutions, infrastructure, education and macro-economic stability.

A World Economic Forum workshop for the SADC region held on Thursday last week observed that infrastructure remains the single most important area for development in Africa if competitiveness has to improve.

The world is eager to do business with Africa, but finds it difficult to access African markets, especially in the interior, due to poor infrastructure.

Experts attending the inaugural workshop concurred that gaps in infrastructure, education, and macro-economic stability are critical issues that needed urgent addressing.

Peter Ondiege a Chief Research Economist with African Development Bank in Tunis, said the issue of infrastructure continues to hold the region back. Air transport is a problem, it is expensive, airports are small, outdated and risky as well as the roads, he added.

He said 15 countries within sub-Saharan Africa are landlocked, and have the added burden of inadequate cross-country rail and road transport infrastructures. Therefore transporting primary products only to the nearest port seriously impacts competitiveness.

Ondiege said Africa’s transport costs are still among the world’s highest.

He said while inadequate infrastructure could be the biggest threat to Africa’s long-term growth it also represented a significant opportunity for investors.

“Though it is a major challenge it should be seen as an investment opportunity because infrastructure helps to expand the political, economic and social space for increased production consumption of goods and services,” said Ondiege.

Bank of Botswana Governor, Linah Mohohlo, said Africa has the potential to be competitive. However there is need for African countries to come good and address the crucial aspects hindering the region’s competitiveness.

“We are capable of competing well with Asia and other blocks if we commit to address the prerequisites of ICT, Infrastructure, education and healthcare,” said Mohohlo.

She challenged managers to work towards addressing the issue of poor work ethic, which Botswana is still grappling with, pulling down its rank over the years.

“Good work ethic rests upon the leaders, if there is no visionary leadership institutions will not progress,” said Mohohlo.

The Assistant Minister of Trade and Industry, Kelesto Rakhudu, said the public sectors across Africa are not carrying their share of burden as such Africa cannot get out of uncompetitiveness.
“The private sector plays its part but the public sector is on a greatest go slow in the region,” he said.

Rakhudu added that of late Africa is locked in some sort of civil war; the different public sectors are pressing governments for more pay completely disregarding the balance.

The SADC countries were persuaded to work with speed in trying to address these issues taking into consideration that countries like Nigeria are threatening to topple South Africa on the Global ranks.

Nkosana Moyo the Founder and Executive chair at the Mandela Institute for Development Studies in South Africa (MINDS) said that the demands of globalisation make it imperative to ensure the African economies competitive.


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