The African Competitiveness Report (ACR) 2009 released last has identified a weak human resource base as the primary factor hindering Botswana's strength against regional and international economic competitors.

But Botswana highly ranked in terms of overall competitiveness, coming third after Tunisia and South Africa.

The report, released last week, is the second of its kind by the World Bank, the World Economic Forum and African Development Bank (AfDB). It highlights areas where urgent policy action and investment are needed to ensure that Africa rides out the global recession and continues to grow for the future.

The report measures competitiveness over 12 pillars, among them infrastructure, the macro-economy, health and primary education, labour market efficiency, higher education and training and innovation.

ACR researchers pointed out that Botswana's Archile's heel is its poor human resource base which dims the country's stellar performances elsewhere such as in macro-economic policy and governance.

They stressed that problems related to market failure of both labour and goods were more serious than those related to political and administrative governance. According to the World Bank's Doing Business Report 2009, the work ethic of national labour force that is inadequately educated ranked as the greatest challenges in Botswana, far superior to the country's inefficient government bureaucracy.

"Botswana's primary weaknesses are related to the country's human resources base," the report says. "Despite high spending on education, educational attainment rates at all levels of the education ladder remain low by international standards and the quality of the educational system receives mediocre marks," the researchers noted.

High spending on education can be seen in the greater enrolment at all levels of education in Botswana. According to the ACR, the Gross Primary Enrolment rate for 2007 was 108 percent while the literacy rate in the population aged 15 years and older was 82.8 percent, higher than average sub-Saharan ratios.

"The quality of labour is one of the constraints to business in Botswana, although the number of years of schooling of a typical worker in a median firm in that country is quite high," it says. "The problem is related to the relevance of the curriculum in formal institutions of learning."

Further weakening the country's human resource base is the impact of HIV/AIDS and malaria. The ACR identifies these two diseases as "the biggest

"Continuing to improve the health and educational levels of the workforce will remain the main priorities for the government for some time", researchers say.

On the positive side, labour productivity in Botswana is high at about US$8 000 per worker, which is more than twice that of low-income countries in sub-Saharan Africa.

However, Total Factory Productivity (TFP) compares unfavourably both with non-African upper middle-income countries and with regional TFP standards in South Africa and Namibia. Labour productivity is the amount of goods and services that a labourer produces in a given amount of time while Total Factor Productivity refers to how efficiently and intensely inputs are utilised in production. In Botswana, labour productivity is influenced by the amount of capital put into business, while TFP remains low by regional and international standards.

The ACR urges Botswana to increase the quality of its human resource to enhance its competitiveness. "Given the current stage of development and the global economic environment, human capital will be a key condition for Botswana to enhance firm productivity, upgrade technologies, and develop high-value added services," it says.

The researchers add that higher education and training need to address labour market needs. Together with other high performing African economies such as Mauritius, Namibia and Tunisia, Botswana will benefit from having greater flexibility in the labour market, they say. "However, such flexibility needs to preserve the social contract that helps those countries avoid violence, crime and endemic corruption."

Botswana was ranked 56 out of 134 countries across the globe in the Global Competitiveness Index, coming third in Africa to South Africa and Tunisia. The 2009 performance was an improvement on 2008 when the country emerged 76th and the 2007 Index when it emerged 57th.

In the 12 pillars on which countries are judged for competitiveness, Botswana ranked highly in macro-economic stability, institutions and financial market sophistication.