Is Africa recovering?
Jul 7th 2008
From the Economist Intelligence Unit ViewsWire

The World Bank's latest report on the political state of Africa
The World Bank's governance indicators may be imperfect but they are a 
useful tool for investors. Politicians, donors and businesspeople with 
African investments increasingly claim that conditions on the ground are 
improving: economic policies are improving, economies are growing faster, 
the region is more politically stable and governance is getting better. Some 
of these assertions are broadly or partially correct, but the World Bank's 
2008 report on governance indicators-Governance Matters-suggests that, on 
governance at least, such optimism should be tempered, since African 
aggregate indicators worsened some 7.6% between 1996, when the governance 
indicators were first compiled, and 2000. There has been a modest 
improvement since then, but the total index is still 5% lower now than in 
1996.

Contrary to general perceptions, Africa scores best for political stability 
and the absence of violence followed by "voice and accountability" (the 
extent to which citizens are able to participate in selecting their 
government) and control of corruption. Its worst scores are for the rule of 
law, government effectiveness and regulatory quality. Over time there has 
been a marked improvement in the continent's political stability index (up 
10%), while voice and accountability shows a 3.9% gain. But the regional 
figure for government effectiveness has deteriorated some 17%, as has 
regulatory quality and the control of corruption. Africa's performance as 
regards rule of law has barely changed since 1996.

Liberia leads the gainers
Country performances are very disparate. Most of those in the top ten have 
made handsome gains since 1996, although Benin and to a lesser extent 
Namibia, Tunisia and Lesotho have all lost ground. Similarly, governance has 
deteriorated, usually substantially, in most of the poorest-performing 
countries, although both the Democratic Republic of Congo (DRC) and Sudan 
have made some headway. On the whole, the richer the country in terms of 
natural resources, the worse its governance ranking. Of course there are 
exceptions, such as Botswana and Namibia (both in the African top five as 
far as governance is concerned), but most resource-rich countries are well 
down the table: the DRC, Sudan, Chad, Equatorial Guinea, Congo 
(Brazzaville), Nigeria and Angola are all ranked between 34th and 46th in 
the World Bank's regional rankings.

There is an important lesson here: the more resources a state has, the less 
its government is likely to take governance reforms seriously. This 
conclusion is also supported by the evidence showing that the greatest gains 
have been achieved by Liberia and Rwanda, resource-poor countries emerging 
from political crises. They have certainly outstripped states like Angola, a 
resource-rich country whose governance track record leaves much to be 
desired.

Inadequate and/or wildly inaccurate information clearly complicates the 
process of making informed and intelligent investment decisions in Africa. 
The World Bank rightly warns of the potential dangers of efforts to convert 
such indicators into league tables, but it is being too modest-the benefits 
far exceed the risks. Businesspeople who monitor the governance indicators 
are likely to make better decisions.


 

¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface
at: http://listserv.icors.org/archives/gambia-l.html

To Search in the Gambia-L archives, go to: http://listserv.icors.org/SCRIPTS/WA-ICORS.EXE?S1=gambia-l
To contact the List Management, please send an e-mail to:
[log in to unmask]
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤