Governance Challenges

Next time you pick up a glossy document from one of the global consultancy companies promoting investment opportunities in Africa, count the number of times the word ‘could’ appears. Also the phrase “potential to become…”.

These global megafirms, whose word is life or death to small countries, give the impression that Africa has only just been discovered – a hidden El Dorado of investment opportunity. The worst examples of this grotesque hype have been Renaissance Capital’s book, The Fastest Billion, about “Africa’s Economic Revolution”, and The Economist’s, Hopeful Continent, covered with trite articles written by a tourist.

They should be more careful. There is no doubt that there is wider space for commerce in most African countries than there was 10 years ago, but in no way is it like doing business in Norway. And it will not be for a while. If these organisations blow the bubble up too big and too fast it will burst and we will be back to The Hopeless Continent days.

The Ibrahim Index of African Governance – the Mo Ibrahim Foundation’s annual report on the state of Africa – is an excellent antidote to the sweet dreams of the big consultancies and fleeting visits by economists. The index is compiled from numerous data sources and has been refined over the years to give as accurate a picture as possible of where Africa is at. Scores and rankings are good ways of conveying progress, success and failure. This index is the best you can find.

It rightly identifies governance as the key to Africa’s future. To misquote Bill Clinton: “It’s the politics stupid”. The index amply illustrates this.

Just look at the six bottom countries in the index: Somalia, Central African Republic, Eritrea, Chad, Guinea Bissau and the Democratic Republic of Congo. At one time during or since independence these countries all did well, but since then have been failed by their rulers or by outside political interference and so their economies have collapsed.

But there is little evidence in this report of ‘Africa Rising’ at the rate some commentators suggest. The good news is that 39 countries have improved their governance and only 13 have deteriorated, but the bad news is that, when it comes to safety and the rule of law, 25 have got better, but 27 have got worse. Politics in Africa is fast moving, however, and these figures could change rapidly.

The economic cost of political upheavals is evidenced everywhere. In fact, out of the 728 boxes for all the countries’ categiories, 312 are either negative or static. This is not a picture of continental lift off. Out of the 52 countries in the index this year, 28 African countries have done better and 24 worse.

The most worrying fact that emerges from the Index is that the three African countries with the largest populations, Nigeria, Ethiopia and the Democratic Republic of Congo, are in the bottom half of the index. Between them, they contain about a third of Africa’s population. There is only one, South Africa, in the top quartile. This suggests that whatever the good news, a large proportion of Africans are still trapped in absolute poverty with little chance of finding a way out any time soon.

While only 13 countries have improved their overall governance in the past five years, 23 achieved their best performance so far. And – as night follows day – 28 countries, those with improved governance records, have also improved sustainable economic opportunities for their citizens. But an almost equal number, 24, have deteriorated.

The only clear, almost continent-wide, good news is that human development has improved in 41 countries and only declined in 11. Health has been top of the list of improvements. The African average is now 72.7pc, with improved healthcare leaving education and welfare trailing at around 50 percent.

The low levels of education and poor outcomes from schools and universities will take time to turn around. In the meantime, poor education has produced disillusioned youth whose family capital has been wasted by sending them to school, but with no skills or jobs at the end of it.

This was a key factor in the North African uprisings. Whatever the political fallout, educational failure will be a heavy drag on Africa for years to come.

I do recommend digging around in the rankings and statistics. It is revealing, intriguing, sometimes puzzling, but you will learn a lot and have a better feel for where Africa is at than by reading ten reports from the global consultancy companies.

By Richard Dowden
Richard Dowden is Director of the Royal African Society and author of Africa: Altered States, Ordinary Miracles. This commentary first appeared in African Arguments.

Published on October 12, 2014 [ Vol 15 ,No 754]



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