Governance in Africa: What do the numbers tell us?

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    Africa’s track record of governance since independence is, at
    best, mixed. Despite the moderate socio-economic and political
    progress made since independence, only a few countries have
    improved their performance relative to those in other parts of
    the world, and these are mostly recent developments confined to
    some of the smallest countries on the continent.

    According to most measures, Sub-Saharan Africa (SSA) remains
    the least competitive region on the planet, stuck between the
    ebbs and flows of commodity cycles and global paradigm shifts.
    Despite enjoying its best decade of economic growth on record
    from 2002 to 2012, African countries continue to populate the
    bottom rungs of the 2016 Human Development Index (HDI), which
    measures key aspects of human progress such as life expectancy,
    per capita income and education. One in two Africans still live
    in extreme poverty, and Africa has overtaken Latin America as
    the most unequal region in the world.

    Countless arguments have tried to explain Africa’s lacklustre
    development record and perennial underperformance on various
    scores and indices. It was the British economist, Richard M.
    Auty, who coined the term “resource curse”, linking the
    endowment of natural resources such as oil and minerals, as we
    see in many African countries, to slow development, corruption
    and authoritarianism.

    Others have blamed the continent’s underdevelopment on
    geography, diseases and the legacy of colonialism. In more
    recent years the development debate has become a sparring
    contest between two opposing camps: One side, championed by the
    economist Jeffrey Sachs and celebrities like Bono, advocate for
    more aid. Others, like famed Zambian economist, Dambisa Moyo,
    insist that development aid is part of a bigger problem,
    crowding out productive capital and undermining good governance
    in Africa. 

    Regardless of which side of the ideological debate or angle of
    the argument taken, at the heart of it, poor governance has
    undermined Africa’s socio-economic progress. By falling short
    on their key obligations, which US political scientist Robert
    Rotberg calls “political goods”, African governments fail to
    deliver on security, political participation, the rule of law,
    and ultimately sustainable economic opportunity and human
    development.

    And through the grand debates, a mixed record of results and a
    sketchy collection of data and facts, Africa’s overall
    governance is difficult to measure. Application for
    policymakers and practitioners seeking an empirical basis for
    comprehensive competitive performance is even trickier. But new
    tools with a decent record of annual averages dating back more
    than a decade can provide better insights through a composite
    collection mixed with practical observations and experiences on
    the ground. The Ibrahim Index of African Governance (IIAG) and
    the GIBS Dynamic Market Index (DMI) are two such measures.

    The IIAG is perhaps one of the most comprehensive and robust
    tools for gauging governance performance in Africa. Funded by
    the Sudanese-British billionaire Mo Ibrahim, and first
    published in 2007, the index measures the quality of governance
    across 54 African countries.

    In its most recent iteration, the 2016 IIAG found that over the
    last 10 years Africa has experienced a very slight overall
    improvement in governance. Notable improvements were in the
    areas of human rights, human development and sustainable
    economic opportunity. But a concerning trend saw safety and the
    rule of law decline sharply over this period. Up to 33 of the
    54 African countries measured experienced a decline in these
    categories, questioning the ability of African states to meet
    the fundamental needs of any society.

    The top three performers on the IIAG were Mauritius, Botswana
    and Cape Verde. Interestingly, this is consistent with other
    indices that measure economic performance. Meanwhile Sudan,
    South Sudan and Somalia took the unenviable bottom spots. Some
    of the most improved countries measured include Côte d’Ivoire,
    Zimbabwe and Rwanda. South Africa, the continent’s most
    industrialised country, saw an overall deterioration, with its
    scores plummeting especially in the areas of safety and rule of
    law.

    The IIAG’s results tend to echo those of the DMI 2016. The DMI
    measures and compares the institutional performance of 144
    countries around the world, using averages between 2007 and
    2014. While the DMI is a global study and not just
    Africa-focused, some of its conceptual pillars do overlap with
    the variables that inform the IIAG. The DMI pillars include:
    Open and Connected, Red Tape, Socio-Political Stability,
    Justice System, Macroeconomic Management and Human Capital. In
    step with the IIAG, the DMI’s findings demonstrate an overall
    (albeit small) improvement in the quality of institutions
    towards good governance. But there was a significant drop-off
    in performance since 2012 and a significant number of African
    countries still lag behind their global peers.

    Most African countries are categorised as “catch-up” markets in
    the 2016 GIBS DMI. These are predominantly low-income countries
    with poor institutional foundations but have demonstrated
    impressive structural improvements since 2007. Similar to the
    IIAG findings, Rwanda and Côte d’Ivoire are among the fastest
    improvers on the DMI, while the Central African Republic (CAR),
    off an already low base in 2007, registered one of the sharpest
    declines in governance on both indices.

    Botswana and Mauritius, which are the top performers on the
    IIAG, are also the only two “dynamic” markets on the GIBS DMI.
    Dynamic Markets are characterised by a relatively high level of
    dynamism in the 2007 base year. More important, they have
    maintained and often improved on a number of institutional
    measures over the period of analysis. Meanwhile, in tandem with
    the IIAG, South Africa performs rather poorly on the DMI
    despite its relatively high base level of institutions in 2007,
    registering no improvement during the period of measure. South
    Africa’s poor performance has been plainly evident in the
    uncertain political and economic environment that has hamstrung
    the country during the last few years.

    There are some notable differences in the results of the two
    indices. For example, East African powerhouses Kenya and
    Ethiopia were among the fastest improvers on the IIAG in the
    last 10 years. But both countries are categorised as “adynamic”
    on their DMI performance. This was largely as a result of
    inadequate progress in Ethiopia’s justice system along with a
    lack of open and connectedness, while Kenya suffered a serious
    setback around recent insecurity, political instability and
    social violence at the end of 2007, which had a lasting impact
    on the data. Simply, while both indices often have broadly
    similar results, they do not necessarily employ the same
    methodologies, and are thus not identical in their findings – a
    useful insight for composite measures and granular details
    needed in analysing the African context.

    An interesting finding, albeit a broad correlation, is that
    between economic performance and the results from the two
    indices. Those countries that recorded an improvement in
    governance on both the IIAG and the DMI over the past 10 years
    are now some of the best economic performers, with either the
    highest growth rates or sustained levels of healthy growth.
    Rwanda and Côte d’Ivoire are such examples, growing at an
    average upwards of 6% over the last five years, and are
    increasingly two of the most competitive countries in Africa.
    Both countries are among a handful of SSA economies to appear
    in the top 100 on the World Economic Forum’s 2016 Global
    Competitiveness Index. This does suggest an important
    correlation between good governance and economic performance,
    where improved governance will lead to economic progress. 

    At a time when Africa seems to be caught in a perfect storm
    comprising the world’s lowest levels of governance and
    productivity, alongside the highest rate of inequality
    globally, individual countries need to get on track with a
    simple solution that will address these challenges and deliver
    growth and development. Measurable good governance is that
    solution. DM

    Prof Lyal White is the director of the Centre for Dynamic
    Markets at GIBS, and Adrian Kitimbo is a senior researcher for
    the Centre.

    Photo: Mo Ibrahim, Founder of Celtel and Satya Capital,
    delivers a speech at the Institute of Directors Convention at
    the Royal Albert Hall, Central London, Britain, 03 October
    2014. EPA/WILL OLIVER

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