eBusiness Weekly
Dr Gift Mugano
There are approximately forty National Competitiveness Councils or Commissions worldwide in countries such as United States of America, Egypt, Croatia, Saudi Arabia, Ireland, United Arab Emirates, Brazil and South Korea.
In these countries, some of the councils are led by the private sector (US, Egypt and Croatia) while some by the government (Ireland, United Arab Emirates, Saudi Arabia and Vietnam).
However, regardless of who leads, successful councils usually involve stakeholders from Government, the private sector, academia and in many cases trade unions.
On its part, Zimbabwe recently gazetted the National Competitiveness Commission Act which paved way for the establishment of the National Competitiveness Commission (NCC) and the setting up of a board.
This is a welcome development considering the fact that Zimbabwe’s number one enemy after ravaging inflation is now un-competitiveness.
However, of concern is Government’s delay to operationalise the commission especially at a time the country has to be competitive enough to attract investors.
The NCC under the current circumstances should be contributing directly to the mantra “Zimbabwe is open for business” by identifying constraints to productivity and economic growth, recommending practical solutions for these and ensuring that these have been developed with inclusive public-private dialogue that leads to broad support for the Government’s competitiveness agenda.
At the moment Zimbabwe ranks lowly across all global ranking agencies such as World Bank’s Doing Business Report, World Economic Forum Global Competitiveness Index, Transparency International etc.
With respect to the World Economic Forum Global Competitiveness Index, Zimbabwe was ranked 124 out of 137 countries in 2017 for the 2017-2018 issue.
The challenge with this ranking is that investors look at such reports as the first point of call before even listening to charming statements like “Zimbabwe is open for business”. These global rating agencies actually scientifically showcase to investors which countries are open to Zimbabwe and vice versa.
Government is aware of this and hence the reason why it fast tracked the establishment of the NCC which is supposed to be a vehicle for removing the obstacles to business. In our interaction with Government on what could be key objectives of the NCC we agreed on the following:
To contribute to increasing Zimbabwe’s productivity;
To relieve constraints to growth in specific Zimbabwean industries;
To identify cross-cutting constraints to growth and productivity and provide solutions;
To inform policy-making with fact-driven analysis; and
To enable Zimbabwe to articulate its competitiveness strategy globally.
In order to achieve these objectives, inter — alia based on international practices should:
Commission good data to inform government on benchmarking on costs, policies, industry performance and having the mandate to get data from national statistics agencies and international sources as may be needed;
Commission specific analytic pieces as necessary, industry by industry or on cross-cutting constraints to growth and productivity;
Working in collaboration with National Economic Consultative Forum, engage in dialogue with industry, private sector, academia to add get feedback on data and analysis, add qualitative inputs, ensure validity of conclusions and recommendations;
Supervise and produce the Zimbabwe National Competitiveness Report which will annually track progress;
To interact with other National Competitiveness Commissions and National Competitiveness Councils globally and to support the presentation of Zimbabwe’s competitiveness agenda in global forums; and
To make available to Zimbabwe’s universities material that will facilitate research and teaching related to Zimbabwe’s competitiveness and productivity and to encourage such practical research and teaching in close public-private-academia cooperation.
To undertake the activities above, the Commission should have the mandate to:
Commission data and statistics from relevant government departments;
Convene industry working groups;
Commission analytical work to relevant experts, think-tanks or universities; and
Mobilise human, financial and technical resources necessary to its tasks.
In undertaking this mandate, based on international best practices, the output of the commission is normally summarised in a National Competiveness Report (NCR) which is produced annually.
A National Competitiveness Report is a “snapshot” of a country’s actual and evolving competitiveness, presented through credible data and its interpretation.
The World Economic Forum (WEF) describes a competitiveness assessment as a “carefully selected compendium of data and interpretation that informs by analysing a region or nation’s current economic standing and framework and assesses how it performs relative to other countries in selected criteria and measures of competitive prowess.”
A competitiveness assessment benchmarks the country’s performance on carefully selected indicators globally and against selected comparator country economies. The assessment uses current (or as current as possible) and trend data.
It includes the national side of the story by including current, locally available information, and it uses dozens of data source; hence not just Global Competitiveness Report (GCR) and World Bank’s Doing Business data.
The National Competitiveness Report will be a helpful tool towards the effective implementation of the undertaken reforms and how far they have gone in reducing the cost of doing business. In this way, our NCR will now be a national dashboard which re-writes the Zimbabwe story on competitiveness and showcases to the world that Zimbabwe is indeed open for business.
The competitiveness assessment is an excellent tool for building national consensus, promotional tool for investors, and also promotional tool that will generate interest amongst multilateral and bilateral partners.
As we work on operationalising the NCC, it is important to bear in mind the underlying values and assumptions of successful commissions.
These are:
The ultimate goal for the countries which established Competitiveness Commissions was to establish sustainable prosperity of their respective people;
Sustainable increases in prosperity are based on increases in productivity. However, one has to bear in mind that productivity growth is not only doing things better but doing better things;
Competitiveness can be defined as sustainable increases in productivity that results in tangible benefits for the average citizen. And, most importantly, competitiveness is NOT a matter of low wages or cheap raw materials. As a matter of fact, most countries with low wages are uncompetitive.
Achieving competitiveness is partly a matter of identifying cost drivers of production and seeing where these can be reduced or “doing things better”. Rather, competitiveness means using Zimbabwe’s talents and assets for higher value activities or “doing better things”.
What it means is that the NCC should embrace leaders and participants in specific industries are in the best position to identify the opportunities for competitiveness as well as the constraints. Involving the private sector (including enterprises, trade unions and experts) in identifying constraints and opportunities, is the best way to get the analytics right and to formulate and implement lasting solutions. In most cases, based on best practices, inter-ministerial cooperation and coordination is vital to achieving ambitious economic goals;
Beyond just establishing research on cost drivers, identifying opportunities and constraints and addressing them; Zimbabwe, at the right time, needs to articulate its competitiveness agenda to the global community through economic dashboards, websites, investment promotion agencies and other vehicles. This will help in addressing negative international perception which is one of the major cause of uncompetitiveness otherwise we will stand to suffer the same fate of a beautiful lady who dresses up and puts on expensive clothes, makeup and admires herself on the mirror but then stays indoors resulting in her not being seen by the would be lover and ultimately stays single till death!
Asante Sana
Dr Mugano is an Author and Expert in Trade and International Finance. He has successfully supervised four Doctorate candidates in the field of Trade and International finance, published over twenty-five articles and book chapters in peer reviewed journals. He is a Research Associate at Nelson Mandela University, Registrar at Zimbabwe Ezekiel Guti University and Director at Africa Economic Development Strategies. Feedback: Cell: +263 772 541 209. Email: [email protected]
