By Simon Freemantle, senior political economist, Standard Bank
A decade ago, amidst profound general optimism around Africa’s ‘rise’, we published a series of reports detailing what we believed to be the five structural drivers behind Africa’s renewed and long-term economic promise. These trends looked at demographic (and income) changes; urbanisation; technological leapfrogging; the broadening of financial access and the abundance of the continent’s untapped (and primarily agricultural) resources.
Thus far in this review series, we have focused on revisiting and updating our views on four of the five trends that we outlined, a decade ago, to be behind Africa’s deepening structural allure. To this end, we have reviewed Africa’s demographic and income developments (see here); the opportunities and risks that emerge as a result of the continent’s rapid urban growth rates (see here); and the powerful technological change that is driving progress in key economies on the continent (see here); and the importance of growing financial inclusion (see here).
Trend 5: Peace and stability; democracy; and the rule of law
In this, the fifth and final, report in the series, we consider the vital role played by political and institutional reform in determining Africa’s ongoing socio-economic trajectory. To do so, we focus on shifts in three areas of institutional change in Africa since 2000: (1) peace and stability; (2) democracy; and (3) the rule of law. Our assessment leans on the World Bank’s World Governance Indicators, as well as a wide variety of alternative and complementary data points to tease out trends in political and institutional reform on the continent over the past two decades.
Our reasoning in focusing on this area of change is straightforward: such institutional progress is evidentially vital for Africa’s economic advance to be both sustained and sustainable. According to the Institute for Economics and Peace, for instance, countries with the largest improvements in peace since 2010 have recorded seven times higher per-capita GDP growth than those that saw the most marked deterioration during that same period. Over time, democratic change has been shown to have a robust positive impact on economic growth and the reduction of income inequality, too. And a strong or strengthening rule of law is known to be a critical component of longer-term institutional and economic change. Indeed, in our view, changes in these three areas are foundational elements of Africa’s future socio-economic trajectory and will in many ways determine the divergent fortunes of the continent’s various economies in the decades ahead.
What is immediately clear from our analysis is how divergent Africa’s institutional progress in these areas has been since 2000. Drawing together data on all three measures, exactly half of the countries on the continent have made collective institutional progress since 2000, with the other half regressing. The countries that have made the greatest strides since the turn of the century include Liberia, Sierra Leone, Rwanda, Angola, Côte d’Ivoire, Kenya, Ghana and Senegal. While those suffering the greatest retreats include Mali, Libya, Egypt, Eritrea, Madagascar, Cameroon and Burkina Faso. Since 2010, the continent’s greatest advances have been made by Tunisia, Côte d’Ivoire, Senegal and Rwanda (amongst others), and its greatest declines have been reflected in Mali, Mozambique, Burundi and Tanzania. These divergences are further reflected by changes in the economic impact of violence since 2010: at the extreme end, the impact of violence in Nigeria has increased by USD41 billion (PPP) over the past decade, while it has declined by USD43 billion (PPP) in South Africa.
A closer assessment of each variable yields interesting results, too. Regarding peace and stability: much of the continent remains broadly ‘unstable’ (by global comparison), but this generalisation masks critical and sweeping progress made in deepening political reform and reducing violence since 2000. Since 2000, 21 countries in Africa have seen improvements in their WGI peace and stability scores. And, today, well over half of the continent is regarded as enjoying either a ‘high’ or a ‘medium’ state of peace. Further, while the number of conflicts has risen in Africa since 2000, there has not been a commensurate elevation in the number of countries affected by this same instability. As we explain in this report, there has been a change in the shape of conflict over the past two decades, too: put simply, cross-border terrorist organisations have replaced opposition/rebel groups as the primary counterpart in state-based conflict on the continent. Here, the effect is pronounced for a relatively small cluster of economies, many of which are located in the so-called ‘arc of instability’ (stretching from Mauritania to Somalia). Indicatively, in 2019, nine countries in Africa (Cameroon, Niger, Chad, Nigeria, Libya, Burkina Faso, Mali, Somalia and Mozambique) experienced conflicts with Islamic State within their territories.
Democratic change has been notable – if uneven – too. According to WGI data, over half of the continent has achieved either modest or meaningful democratic gains since 2000. Separately, according to the Centre for Systemic Peace, Africa’s overall polity score has lifted from -5.4 in 1985 to 0.2 in 2000 and 2.6 in 2018. According to this same measure, the number of African democracies has doubled since 2000. Today, 33 African countries are regarded as being fully democratic, democratic, or ‘anocratic’ with a trend towards democracy, while the number of autocracies has declined from 10 in 2000 to three in 2018. Amongst the continent’s most impressive democratic reformers since 2010 have been Tunisia (which has managed, unlike Libya and Egypt, to positively harness the disruptive influence of the Arab Spring), Gambia, Côte d’Ivoire, and Madagascar. In terms of the EIU Democracy Index, four countries in Africa have regressed since 2010, and six have progressed. And, considering Freedom House’s evaluation, seven countries have seen their levels of freedom decline since 2010, and five have seen theirs increase. Importantly, support for democracy in Africa is high, and also increasing: in a recent poll across 36 countries, almost 70% of respondents stated that democracy is ‘preferable’ to other forms of governance.
Much still needs to be done to improve the rule of law across Africa. Still, only a handful of countries (Mauritius, Botswana, Namibia, Tunisia, Ghana and South Africa) provide an internationally competitive defence of the rule of law. Indeed, today all but eight countries on the continent have negative WGI rule of law scores. And progress since 2000 in this area has been more gradual than in the peace and stability and democracy areas. Yet, reforms in some other countries have nonetheless been important: here, the most impressive relative gains since 2000 have been made by Rwanda, Liberia, Sierra Leone, Côte d’Ivoire, Angola, Uganda and Ethiopia.