The Ibrahim Index of African Governance (IIAG) has tracked data on countries in Africa since 2000 in order to compile an overall ranking of good governance. The IIAG tracks 94 different indicators across four main categories: Safety & Rule of Law, Participation & Human Rights, Sustainable Economic Opportunity, and Human Development. With governance such an integral part of deciding whether to invest in a frontier market, we decided to take a deeper look at the 2013 Ibrahim Index of African Governance which was released just last week. Here are some highlights from the report:
1. Mauritius was ranked #1 in Africa
With an overall score of 82.9 (vs an average of 51.6 for Africa) and either a 1st or 2nd rank in all four main categories, Mauritius was the undisputed leader of good governance in Africa once again. The country has been in the top 10 since 2000 where it has steadily improved by 7.3 points since then. It’s biggest area of concern is in gender-based indicators.
2. Somalia has the worst governance in Africa (and it’s not even close)
On the other end of the spectrum was Somalia with an overall score of just 8.0, a shocking distance away from second-last Congo DR which scored a paltry 31.3. Not surprisingly, Somalia ranked dead last in every single indicator and has shown little improvement since the IIAG’s inception, having actually fallen by 1.7 since 2000. Although it has developed in the Economic Opportunity and Human Development categories, the Safety & Rule of Law indicators dropped so much that Somalia remains firmly entrenched at the bottom of the rankings.
3. Liberia is rocketing up the rankings
Liberia has come a long way from the days of Charles Taylor and civil war. Although Liberia finished with a score of 50.3 and a rank of 29th (out of 52) in Africa, the country continued to make strides towards good governance by improving another 2.5 points in 2012. This amounts to a 24.8 point improvement since 2000, by far the biggest improvement of any country in Africa. With the civil war ending, the largest gains have been seen in Safety & Rule of Law (+34.1 since 2000), with Economic Opportunities and Health a needed area of improvement for the future.
4. 94% of Africans have experienced better governance since 2000
While there is much room to improve when it comes to good governance in Africa, there is still much to be optimistic about when 94% of the population in Africa resides in countries whose governance scores have improved since 2000. The African average has increased by 4.5 points since 200, and this includes 18 countries (35% of total) that had their best result in 2012.
The biggest improvements have come in Human Development categories (+10.2), with Antiretroviral Treatment Provision, Immunisation, Primary School Completion, and Child Mortality Rates showing large improvements. However, Safety & Rule of Law categories have actually deteriorated slightly since 2000, most notably in Personal Safety, Transfers of Power, Armed Conflict, and Human Trafficking.
5. No Winner of the Ibrahim Prize.. Again
Related to the IIAG is the Ibrahim Prize, the “largest annually awarded prize in the world”, awarded to a departing president to recognize them as a role model for good governance (and to give more incentive to sitting presidents to move on). For the second year in a row, there was no winner of the prize, and only 3 awards have been granted since 2007. While this puts a damper on the overall improvements seen in the region via the IIAG, the dearth of winners is partly due to the strict criteria; only heads of state that have left within the past three years are considered, meaning business leaders or lower level politicians are not considered no matter their resume.
While rankings such as the IIAG are only as good as the data they collect and it is not without its detractors, the rankings still serve as a good starting point for deciding on what markets are worth investing in. Fortunately, the trend is upwards and there remains much hope (and much room to grow) for Africa to develop the proper systems to continue growth.