Faltering African progress worries investors

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Mo IbrahimFALTERING economic and political progress in Africa is a worrying sign to governments and foreign investors counting on the continent to serve as the next engine of global economic growth, one of Africa’s most prominent businessmen said on Monday.

“Things are stalling,” said Mo Ibrahim, who earned billions of dollars installing some of Africa’s first mobile phone networks. “We can’t pat ourselves on the back and pretend everything is hunky-dory; it’s not.”

An annual index of economic, political and developmental indicators compiled by Mr Ibrahim’s philanthropic foundation and released on Monday showed that the security and business environment in many of Africa’s 54 nations is not improving as rapidly as a decade ago, when the continent was hailed as the next great global economic frontier.

Mauritius topped the rankings as the best-governed country in Africa with a total of 79.9 out of 100 on the index’s scale, followed by Cabo Verde, Botswana, South Africa and Namibia completing the top five. Next were: Seychelles, Ghana, Tunisia, Senegal and Lesotho, however five of the top 10, including Mauritius, had actually declined, scoring lower than last year. The average African nation received a score of 50.1.

At the opposite end of the spectrum, Somalia was last, scoring just 8.5, over 70 points lower than Mauritius, and over 10 points behind next-lowest nation South Sudan, which registered the greatest drop, losing 9.6 points since last year.

He said that rather than being a vague concept, governance can be measured through data, and it is an issue which matters to all Africans: “Governance is not just for those with PhDs to discuss. It’s for the ordinary man and woman on the street.”

He added: “Civil society is very important in Africa. It is not the enemy of government, and we need to defend it.”

Looking at individual successes and failures, Ibrahim highlighted healthcare: “Health in general is improving in Africa and it is one of the most improved categories,” but he acknowledged problems on the continent with gender equality, saying “Gender is a problem in Africa, there is a red flag around that area, but it is improving.”

The index mined 15 years of data from 33 sources, including the African Development Bank, African Union Commission, World Bank and United Nations Children’s Fund, assessing all 54 African countries against four categories: safety and rule of law; participation and human rights; sustainable economic opportunity, and human development.

The index revealed that only six out of 54 countries had made improvements in all four areas: Ivory Coast, Morocco, Rwanda, Senegal, Somalia and Zimbabwe. Two of the four categories had shown overall improvement: human development, and participation and human rights, while safety and rule of law, and sustainable economic opportunity had declined.

This year’s rating of 50.1 on a 100-point scale, while up from 46.5 when the index was first issued in 2000, is down from a peak of 50.4 in 2010. Under the Ibrahim Index of African Governance, 100 represents a prosperous, democratic utopia.

“We really need to work a little bit harder to keep moving forward,” Mr Ibrahim told The Wall Street Journal.

Some of the malaise emanates from slumping commodity prices, which underpin the continent’s biggest economies. Dipping revenues from Nigerian oil, South African platinum and other raw materials are expected to slow economic growth across sub-Saharan Africa to 3.3% this year from 5% in 2014, research firm Capital Economics said.

When commodity prices were high and government coffers were flush, officials in Angola, Zambia and other countries did not invest enough in improving education, health care and roads, said the Mo Ibrahim Foundation’s executive director for research and policy Nathalie Delapalme.

With funds now drying up, even the most well-intentioned of the continent’s governments will have a harder time lifting their citizens out of poverty. “They could have been better positioned to confront the crisis that is in front of them,” Ms Delapalme said.

The torpor affecting Africa’s largest economies and the sinking value of their currencies are tearing at the social fabric, economists warn, especially in countries where life was already often punishing for most people.

The Mo Ibrahim Foundation’s annual report indicates that even the continent’s recent success stories face daunting challenges.

The Democratic Republic of the Congo has climbed more than five points on the foundation’s scale of sustainable economic opportunity since 2011. But huge hurdles remain. The largest cities of Congo, a country the size of Western Europe, still are not connected by roads.

Congo is scheduled to hold national elections next year, and, if a referendum measure is approved allowing President Joseph Kabila to seek a third term in office, his party will be pitted against more than 400 rivals.

The prospect of continued political dysfunction and stalemate has caused some Congolese to talk openly about attacking the country’s parliament and other government buildings, as protesters did last year in Burkina Faso.

Not all is bleak and uncertain on the continent, the foundation’s report suggests. Mid-sized African countries are making strides towards more widespread economic growth and better governance. Ivory Coast, which only four years ago was mired in civil war, climbed furthest in this year’s index.

Kenya’s economy is also growing swiftly. Authorities have made improvements to the rule of law, even as officials confront the menace of al-Shabaab terrorists from neighbouring Somalia.

Still, the portrait of a continent stumbling represents a reckoning for those who assumed Africa’s ascent inexorable, said Ms Leoka.

“The whole Africa rising story is in question.” – BDLive/Africanlawbusiness

 

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