An assessment of Kenya’s international competitiveness
Competitiveness is defined as the set of institutions, policies, and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be reached by an economy. The productivity level also determines the rates of return obtained by investments in an economy, which in turn are the fundamental drivers of its growth rates. In other words, a more competitive economy is one that is likely to grow faster over time. The concept of competitiveness thus involves static and dynamic components. Although the productivity of a country determines its ability to sustain a high level of income, it is also one of the central determinants of its return on investment, which is one of the key factors explaining an economy’s growth potential. As the east Asian developing nations have demonstrated in recent years, development is all about international competitiveness.
The objective of this working paper is to examine the role of competitiveness in economic development and to assess how well Kenya is competing in the global stakes. This paper complements others in the sequence of a Kenyan Trade Law Centre for Southern Africa (tralac) training week programme* by examining competitiveness ‘from the ground up’, as distinct from examining export competitiveness from the basis of the actual export performance. In order to do this, the authors draw heavily from the World Economic Forum Global Competitiveness Report of 2016-2017. They find that although Kenya does not rank highly on a global scale, it does rank highly on an African scale and its ranking in several factors is improving in a meaningful way.
* This working paper was prepared during the week of 24 to 28 April 2017 as part of a tralac Geek Week in Nairobi, Kenya.
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