Rwanda is the third most competitive economy in sub-Saharan Africa and the first in the East Africa Community bloc, according to the World Economic Forum Global Competitiveness Index released this week. Rwanda was ranked 63rd globally, maintaining last year’s position, while South Africa, which was ranked 52nd, topped sub-Saharan countries followed by Mauritius (54th).
Globally, Rwanda moved up seven places this year out of 144 countries surveyed compared to last year’s 70th position.
Switzerland topped the list followed by Singapore and Finland as the most competitive countries in the world. Neighbours Kenya, Tanzania, Uganda and Burundi were ranked 106th, 120th, 123rd and 144th, respectively.
Commenting on Rwanda’s performance, the acting chief executive officer of the Rwanda Development Board, Clare Akamanzi, said the improvement in the ranking was a result of extensive efforts by the government to create a more conducive business environment.
“The government is committed to increasing innovations and improving the skills of our people to enhance the country’s competitiveness globally,” she said in a statement.
The survey measured the countries’ competitiveness based on three main sets of factors, including factor driven requirements (institutions, infrastructure, macro-economic environment, health and primary education), efficiency enhancers like higher education and training, goods and labour market efficiency, financial market development, technological readiness and market size, plus innovation driven factors.
It indicated that Rwanda’s improvement was mainly driven by the fewer days and procedures investors go through to start a business, public trust in politicians, and government investment in advanced technology and women in labour force.
It also lauded the country on the low level of corruption, and political stability.
The country ranks 11th in labour market efficiency, while in the financial market, it ranked 49th.
Akamanzi noted that this meant Rwanda was getting ready to leap out of the set of 38 development-factor-driven economies into the efficiency-driven economies in the world.
Economies that are mainly factor-driven compete based on their factor endowments, primarily low-skilled labour and natural resources. Their companies compete on the basis of price and sell basic products or commodities, with low production costs reflected in low wages.
“As we move towards becoming a middle-income country, we will have to address the challenges that continue to affect our economy,” she said.