13 January 2010

African businesses already face stiff and ruthless competition from cheap imported products coming mainly from the Far East.  With poor infrastructure, high cost of electricity, an unskilled work force and un-competitive business environments, it is clear that African goods cannot favourably compete with imported goods. The effects of climate change therefore pose a big threat to the survival not only of African businesses, but even of the nations themselves. The graph on the left shows Africa's declining share of world trade.

Climate change has made an already bad situation for competitiveness of Africa's businesses even worse. Most of the countries of sub-Saharan Africa depend on hydro power for their electricity needs. The fall in levels of lakes and drying up of rivers has meant that the generation capacity has fallen drastically. Many countries have been forced to purchase and operate thermal generators, which has led to an escalation of electricity tariffs. The electricity tariffs in some African countries are much higher than those for many developed countries! The high electricity tariffs alone have led to the collapse of many small and medium enterprises, and those that have survived have been forced to increase the cost of their products. The situation is not much better for the other major in-puts including water and fuels.

With this hopeless scenario can Africa and her businesses ever hope to be competitive on the ever increasingly competitive global situation? Africa must learn from the rest of the world. She must invest her meagre resources wisely and strategically. She must invest in her people, the most important resource, through good quality education, as well as in creating a favourable climate for her businesses, especially the SMEs. The task to make Africa competitive is enormous and requires the concerted efforts of all the governments and the people. The Pan-African Competitive Forum has been created under the auspices of TCI - The Competitiveness Institute as a way to contributing to developing Africa' competitiveness. A programme to promote cluster-based competitiveness, code-named Lighting 1000 Fires has been initiated by the PACF.

Indeed, re-positioning Africa in this highly competitive world is an uphill task. But with programmes like Lighting 1000 Fires, there is light at the end of the tunnel.

Barnabas Nawangwe is the current Dean of the Faculty of Technology, Makerere University, Uganda and the Chairman of the Pan African Competitiveness Forum (PACF) Council. Dr Nawangwe is also a founder member of the National Coordinator of the Innovation Systems and Innovative Clusters Programme for Uganda.