Reigniting the capacity of developing countries to compete in the global economies

A competitive economy is the one that attracts the most foreign investors and with the potential to grow at a faster rate over time. The African continent is a renowned region richly endowed with natural resources. Records show that at the decolonization period of the 1950s & 60s, African economies grew rapidly awakening the manufacturing activities and the modernization of infrastructure and increased urbanization. However the current development scenario is demeaning, characterized of subsistence production inhibiting savings with low consumption resulting in reduced investments that leads to economic growth stagnation, positioning the region on the periphery of the economic competitive paradigm. Such measures as international trade policies as the “Washington Consensus” and import compression have in the past resulted into deindustrialization, minimal utilization and investment capacities limiting the region to meet world trade requirements curtailing the Sub Saharan Africa (SSA) manufacturers to compete with highly performing industries located in Europe, Asia and North America. Many theories and studies have focused on defining the development strategies for SSA to grow by assessing the economic position of the region as a ‘half glass empty’ rather than a ‘half glass full’. A number of these studies propose development frameworks that are beyond the ability of SSA to realize in respect to its level of production and budgetary allocation. Others copy paste economic policies and strategies from the developed economies archives assuming that, modernization takes a night, a week or even a month to be created. However, none of these researches has ever posed the question; how wealthy is SSA? This thesis picks from the empirical truth that, if the per capita gross domestic product (GDP) and GDP growth of Africa were higher than that of Asia in 1960s, then SSA was and is wealthy. Global competitiveness determines the levels of development growth of a region in the network systems and economic development undergoes phases of growth. Globalization, competitive advantages, location factors, agglomeration and economic networks define development advancement through global economies. The study aims at adding knowledge to the subject of global competitiveness and economic development recognizing that, many economies hold untapped potentials to grow. In addition, it gives an insight on how the level of development advancement determines how a region or country competes in the world economies and outlines recommendations SSA should take to reignite its capacity to compete efficiently with the highly ranked economies of the world. The policy makers ought to prioritize development projects depending on the need and the budgetary allocation of every developing economy. The research uses the data on fDi markets for 2006-2012 to analyze the patterns and trends of FDI flows at global, regional (Europe, S.E Asia and S.S. Africa), continental (West, East, Middle & Southern Africa) and at country (Singapore & Kenya) levels respectively. The capacity of the regions to compete was also computed. Further, analysis on the data resulted in determining the factors of production influencing foreign investments to locate in SSA.