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'Virtually no progress' in creating economic opportunity in Africa in last decade

Nov 05 2018 07:07
Tehillah Niselow, Fin24
                  

The 2018 Ibrahim Index of African Governance (IIAG) paints a worrying picture of access to economic opportunity for citizens of African countries, despite strong levels of economic growth over the last decade. 

The index, which measures four pillars of governance - Safety and the Rule of law, Participation & Human Rights, Sustainable Economic Opportunity and Human Development – was released in Pretoria on Friday and is the brainchild of Mo Ibrahim, the Sudanese telecoms billionaire and philanthropist.

The Overall Governance score, which takes all the indicators into account, improved modestly in the 2018 IIAG to 49.9 out of 100, up from 49.7 the previous year, however several key pillars saw declines, including economic prosperity. 

“Since 2008 the African average score for ‘Sustainable Economic Opportunity’ has increased by 0.1 point, or 0.2%, despite a continental increase in GDP of nearly 40% over the same period. 

The Sustainable Economic Opportunity pillar scored 44.8 out of 100, having remained under the 45 mark on the index, since 2008. 

Virtually no progress 

“There has been virtually no progress in creating ‘Sustainable Economic Opportunity’, meaning it remains the Ibrahim Index’s worst performing and slowest improving category,” the Mo Ibrahim Foundation commented.

Malanga Mughogho, a former Ibrahim Leadership Fellow at the African Development Bank told Fin24 on the sidleines of the launch that young people across the continent can see things happening, but they don’t experience the benefits, adding that the phenomenon appears to be “jobless growth”.

And the future also appears to be bleak.

Between 2015 and 2050, Africa’s working age population (15-64 years old) is expected to increase by 901.8m people yet the Mo Ibrahim Foundation found the "dismal trajectory of the African average score of the business environment over the decade, contrasts with the increasing continental GDP and also appears to be at odds with population growth”.

Mughogho said these negative economic trends are partly due to financial exclusion and people falling outside the formal banking system. 

The Big Mismatch

Abdoulie Janneh executive director of the Mo Ibrahim Foundation pointed to the “big mismatch” in people studying agriculture with just 2%-5% of young people choosing to pursue this path at tertiary level while many African economies are still dependent on farming as a large segment of GDP.

He said that most jobs for the burgeoning population on the continent will come from the private sector and governments' need to attract the necessary investment by strengthening property rights and improving the business regulatory framework.

Also of concern is the Education Pillar of the index, despite the Human Development scorecard improving. This was mostly due to health outcomes over the last ten years. Education stalled in progress and has now entered a decline.

In 27 countries  (52.8% of Africa’s youth population) in 2017, education scores deteriorated, driven by a drop in indicators measured by meeting the needs of the economy, quality and citizens’ expectations. 

According to the 2018 IIAG, The Rule of Law and Transparency & Accountability improved and there has also been progress in Participation & Human Rights.

South Africa’s own scorecard on Sustainable Economic Opportunity, Safety and Rule of Law as well as the Transparency and Accountability pillars all deteriorated in the last ten years.

The country’s Participation & Human Rights, Gender and Human development scores however, improved during the same period.

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