Speaking at the World Economic Forum (WEF) last week, the World Bank’s Vice President of the Africa Region, Obiageli Katryn Ezekwesili called for an annual investment of $80 billion in infrastructure to increase African competitiveness in the global market, especially in light of the current global economic crisis.
The economic crisis has altered traditional capital flows to the region, including foreign investment, remittances, and traditional development aid, explained Ezekwesili, and has exacerbated already existing problems in the region – including unemployment. However, with increased investment in infrastructure, among other improvements, she predicted that African productivity could increase by up to 40%.
This recommendation complements recommendations issued by the African Development Bank, the World Bank, and the World Economic Forum in the African Competitiveness Report 2009, released last Wednesday. The report combined research conducted by all three organizations and concluded that African businesses could experience increased productivity with upgraded infrastructure, fewer trade barriers, improved education and health care systems, and strengthened institutions.
“Investment in infrastructure with a regional focus would help cushion the impact of the crisis and position Africa to take advantage of the rebound of the global economy when it occurs,” said Ezekwesili. “The countries that will reap the most benefit and limit the adverse impact of the crisis would be those that sustain reforms, strengthen governance, modernize local capital markets and make the investments needed to tap the immense resourcefulness and creativity of their people.”
In the short-term, the report urged African government and international partners to keep markets open to trade and increase access to finance to weather the economic crisis. In the long-term, the report suggested that improvements in infrastructure, as well as in education and healthcare systems, could increase competitiveness. The report was confident that with these reforms, as well as more good governance and strong leadership, African businesses can be competitive at the global level.