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Letter from an Economist
John Birchall
13 Oct 2008
In his weekly letter, economist John Birchall looks at the publication of the Ibrahim Index and which African countries have improved the most.
One of the most quoted sayings about Africa was supposedly said by Pliny when he noted "Africa simper aliquid novi" which means that out of Africa there is always something new.
Alas in recent years this phrase has tended to end with bad replacing new. But the publication of the Ibrahim Index is one piece of news that has some encouraging signs within it. The index surveys all African countries recording how well they have been governed and for the majority the findings are that things are improving.
The current index shows that 31 0f the 48 countries surveyed recorded higher scores than last year. Mauritius, one of Africa’s most stable and prosperous nations came top with a score of 85.1 out of 100.The others that appeared in the top five were: Seychelles, Cape Verde, Botswana and South Africa, all of who scored more than 71%.
SA is 7th most dangerous
The latter did not score as highly in the safety and security section as the others in the top group. South Africa is now thought to be the seventh most dangerous country in Africa. The bottom of the league table was occupied by: Democratic Republic of Congo, Chad, Sudan, Angola and Somalia was ranked last.
Critics have asked how accurate the index as a barometer of good governance is across an entire continent. Well, it takes into consideration 58 different criteria and the data is just two years old. It is as accurate as data conventionally used to assess economic and political changes in Africa.
It is now accepted that potential investors use the index before embarking of foreign direct investment projects or expanding any share portfolios they may have. Sovereign Capital Funds also enquire into the current state of governance before discussing the use of their surpluses. They do, of course, look at the rise in commodity prices and the debt relief benefits that have arisen since Gleneagles 2005.
Quality of life
The index covers five main areas. These are: peace and security, corruption, transparency and how the government conducts its affairs. Within these categories attention is also paid to human rights, women’s’ rights and the manner in which elections are conducted.
The final scores also include living standards and the access to meaningful work, poverty, health and -education. So, the conclusions are wide-ranging and relevant to quality of life enjoyed by the average citizen in all of the countries participating in the construction of the index.
It is interesting to note that peace and security are seen as the most important determinants. Within this category the range moves from outright war through the level of personal security in such areas as rape, mugging and theft. The index measures both the numbers arising in each category and their intensity.
No development without peace
There can be no development without peace, which is why those at the bottom of this list find themselves in such a position. It is also worth noting that the country which has moved up the index by the highest number since it was last constructed - is Liberia. This small, West African state saw many years of terrible civil war but is now addressing many of the issues that caused such destruction and moved up five places to 38th with an increase of 10.4 points.
The constant appearance of corruption with the index remains a major worry. But is it part of a wider problem? It flourishes where individuals know that the law will not be effectively applied, that property rights will be ignored or not fairly enforced, that disputes between the individual and the State will not be conducted fairly and that bribes will be taken to stop the force of law being applied.
Human rights
The index also gives considerable weight to the human rights record of individual governments. In most cases there has been an improvement in this category. Within this part of the index the researchers analyse access to free and fair elections, the ability of elected individuals to hold government to account and how effective oppositions are allowed to be. They also monitor a range of civil rights, from press freedom to women’s rights. It is in these categories that the report notes the most progress being made, with two-thirds of African countries doing better.
It is interesting to note that the macroeconomic environment within which these improvements have been recorded. In most cases economic growth (which now averages 6% across the continent), per capita GDP, inflation rates, the reliability of financial institutions and overall business environment are improving for the majority of African countries.
The micro environment does not show such a successful outcome. The very poor are getting poorer – these tend to include the elderly, some tribal groups, abandoned mothers and those suffering from Aids and other debilitating diseases remain destitute even when economic growth in improving.
Too many hungry children
There has been some improvement in life expectancy but too many children are remaining in the undernourished category. Immunisation is up quite considerably and more people now have access to clean drinking water but access to health workers and doctors shows no improvement.
Teacher/student ration numbers have improved and in some countries a noticeable increase in the number of girls finishing primary school. The plight of adult women and literacy remains untouched despite the debt relief post Gleneagles 2005. All of these numbers confirm the belief that those at the bottom of the pile have the least hope of improvement.
There is clearly an enormous amount sill to be done but as Mo Ibrahim said in his post report release interview "Africa is open for business and investors should look at our growth and the global financial situation being as it is - maybe investment in Africa is safer"!
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