Enhancing Competitiveness in Four African Economies: Botswana, Mauritius, Namibia and Tunisia

This paper investigates the competitiveness of the four economies. The second section briefly examines competitiveness through the macroeconomic performance or the ability these countries had to promote, over the past decades, a sustainable external and internal balance. Section 3 is devoted to the analysis of price competitiveness. In an integrated world where the “law of one price” applies, national producers must be able to keep their costs in line with the exogenous world price conditions. To address this question some indicators such as aggregate trade-weighted real effective exchange rates are used. Sector-based relative price indicators are also examined to highlight price or cost competitiveness for the most important primary and manufactured goods. Although relative prices strongly determine the ability to participate to the world integration, “getting the prices right” is not enough. In the Global Competitiveness Report, competitiveness is defined as the set of institutions, policies, and factors that determine the level of productivity of a country. Then, institutions matter whose economic role is examined in section 4. In developing economies with significant market failures, efficient institutions and good public governance help to increase the integration into the world economy. The rules and their enforcement contribute to firm productivity and the attractiveness of the national territory for domestic and foreign investors. To implement this analysis, using bilateral comparisons, the situation of the four countries has been compared to four non-African middle income economies. Although any pair of countries can be criticized as there is no country that strictly looks like another one, the pairs have been formed according to some basic economic criteria that reduce the potential subjectivity. In section 5, the main challenges ahead are reviewed for the four economies in relation with the “efficiency enhancers”. Section 6 reminds the major results and draws the conclusions of the study.