17 Aug 2021

Efficient Governance and Harnessing Opportunities in Africa

Rahaf Al Khazraji
17 Aug 2021

Efficient Governance and Harnessing Opportunities in Africa

Rahaf Al Khazraji

Introduction

Governance is an inclusive concept covering all the dimensions of how a country is ruled and governed. It encompasses economic and social policies and citizens obeying laws and following rules. In particular, good governance can be used as a tool to compare efficient and inefficient economies or political excellence to determine a state’s political and economic success. [1] Seen in this context, the efficiency of governance in Africa will determine the continent’s future. This paper focuses on Africa’s challenges and opportunities in governance, with Botswana, Rwanda, and Zimbabwe as primary examples and the effects of the Covid-19 pandemic on their economies.

In recent years, Africa has been viewed as a continent needing development and a place plagued by poverty and terrorism. Yet, the significant progress the continent has made during the last decade is striking. Following 2015, Africa underwent several leadership changes, emphasizing the continent’s broad potential for strengthening democracy and accountability. IOA’s Africa Country Benchmark Report ranks democratic countries such as Mauritius, Ghana, Namibia, and Botswana as politically stable. These countries, and other rising democracies across Africa, indicate or encourage development to international partners that stability could be achieved throughout the continent. [2]

Aside from democracy as a key factor for better governance, several African countries have improved noticeably, with 34 countries improving their governments’ performance. Significant improvements have also been witnessed in political participation, the rule of law, accountability, transparency, and human rights. [3]

Despite these positive developments over the past few years, the continent is still far from being immune from civil turbulence, natural disasters, and poverty. Africa is rich with valuable resources, such as gold, diamond, uranium, and oil, and the challenge comes from the misuse of these natural resources. Some have become high-income countries, gradually transforming themselves into a democracy and providing efficient governance. Yet countries in their neighborhood continue to struggle for development.

Understanding good governance

Good governance is essential for countries wishing to develop. It also supports and sustains an environment that allows the country’s economy to develop equitably. According to the World Bank (1992), [4] good governance encompasses public sector management efficiency, accountability, a legal framework for development, information and transparency, and employing political power to handle social and economic resources for development. Governance mechanisms have been a controversial subject in the past. However, experts agree on the following eight mechanisms defined by the United Nations Development Program [5] as the most useful to achieving good governance:

  1. Participation: Both the World Bank and the United Nations Development Program (UNDP) view participation as a human right. The UNDP also stresses that development requires civil society organizations’ active participation because governments cannot fulfill all the tasks by themselves. Participation should be well informed and coordinated, implying freedom of association, free and fair elections, and a vibrant civil society.
  2. The rule of law: This is a constitutional principle with different aspects, including justice and equality. The UNDP links the rule of law to poverty eradication and the protection of rights.
  3. Transparency: Transparency is the process of ensuring decisions are implemented as per clear rules and regulations. It also indicates that information is widely available to people or groups whom certain decisions will afflict.
  4. Response: Good governance requires an excellent response to ensuring public services, which should complete in a reasonable time. Responsiveness also necessitates that governments and organizations should attempt to serve all stakeholders appropriately.
  5. Consensus: Developing consensus means getting to know the various official and informal actors’ views and trying to accommodate everyone’s needs and interests. Such an approach requires the harnessing of all energies.
  6. Equality and inclusiveness: Equality and inclusiveness ensure that everyone gets opportunities to improve or maintain their well-being without discrimination.
  7. Effectiveness and efficiency: These attributes produce processes and institutions for the output, meeting the needs with maximum resource utilization. In governance, efficiency includes utilizing sustainable natural resources and environmental protection.
  8. Accountability: Government institutions, private sectors, and civil society organizations must be held accountable to stakeholders and the general public. Accountability differs in whether an action or decision is taken internally or externally and the severity of the repercussion. Accountability cannot be imposed without transparency and the rule of law.

Similarly, leaders and the public should have a broad and long-term view of programs and goals, along with a sense of what is required to bring about the desired development. They must also understand the historical, cultural, and social complexities that underpin this perspective. These mechanisms play a vital role in preventing and combating corruption through multiple anti-corruption strategies. Aspects that derive or stem from the principle of accountability, reform, transparency, and participation, strengthen government institutions and enable them to face corruption.

Another significant index is The Ibrahim Index of Governance in Africa, an evaluation tool used by the African Union and individual African countries to assess their progress toward development and democracy. It is a composite index issued by a well-known non-government organization called Mo Ibrahim Foundation, founded by Sudanese-British billionaire businessman Mohammed Ibrahim. He became famous in 2011 when he launched the National Paralympic Index Africa. The Ibrahim Index of African Governance (IIAG) consists of four categories:

  1. Safety and the rule of law
  2. Participation and human rights
  3. Sustainable economic development
  4. Human development

The IIAG constitutes 14 sub-indicators, composed of 86 sub-variables that the classes are complex in clusters, and assesses every country in Africa and their performance every year since 2000. The IIAG ranks countries from 1-54 based on their performance that year. [6] This indicator collaborates with the African Countries Barometer and the Global Trust and Integrity Organization – South Africa. The data included in the guide came from 23 different institutions and sources such as the African Development Bank, the Bertelsmann Index, and the Center for Democratic Development in Ghana. These indicators are merged through a complex statistical process, then transformed into variables within the sub-indicators whereby countries are given a mark based on each of the four categories, ranging from unsatisfactory (0) to good (100). The categories are combined to form the value of the country’s governance index. [7]

The IIAG has the most extensive collection of data on governance in Africa. It assesses governments and institutions’ performances and accurately measures the public’s supply of goods and services. Indexes such as the IIAG encourage leaders to engage in good governance, contributing to Africa’s development and eliminating Africa’s need for foreign aid.

Situational Overview: African Achievements

Africa has made progress on the governance parameters. Many countries have witnessed remarkable development, individually or through the African Union. Before examining the three countries, this section provides an overview of the achievements made by governments in Africa in recent decades.

Improving health and combating disease

Countries in Africa have shown noticeable improvement in healthcare in recent times. There has been a significant decline in maternal deaths, child deaths, and child malnutrition has decreased by 10 percent from 1995. Most countries are making immense improvements to prevent childhood diseases and illnesses. Although HIV/AIDS and malaria remain widespread in the continent and have damaging effects, treatment options have improved immensely, leading to a decline in the rate of infections (Figure 1). Healthy life expectancy is also on the rise across the continent. [8]

Figure 1:

Source: World Bank

 

Figure 2:

Source: World Bank

Overcoming social challenges

The rate of Africans living in extreme poverty (below the international poverty line of $1.9 a day) has declined over the past years. For most countries, the reduction of poverty has made a positive impact on the continent. For instance, Ethiopia has predicted that poverty rates would be entirely defeated by 2050. Extreme poverty has been tackled in some countries in Africa by providing educational opportunities, health insurance, access to financial services, and access to vaccines. Nevertheless, 40 percent of Africa’s poor people are expected to live mainly in DR Congo and Nigeria. The African Union’s focus on poverty would be challenging since it should reduce poverty in all countries in Africa. [9]

Economic growth

Improvement in government efficiency, education, increased foreign investment, and natural resources in most African countries have contributed to the continent’s economic growth. According to the African Economic Outlook Report for 2020, published by the African Development Bank, Africa’s economic growth rate remained stable in 2019 at 3.4 percent, on its way to reach 3.9 percent in 2020 and 4.1 percent in 2021. East Africa has maintained its position as the fastest-growing sub-region globally, with an average growth of 5.0 percent in 2019.

North Africa was the second-fastest-growing sub-region, with a growth rate of 4.1 percent. Whereas the growth rate of West Africa increased to 3.7 percent in 2019, compared to 3.4 percent in the previous year, and the growth rate of Central Africa reached 3.2 percent in 2019, compared to 2.7 percent in 2018, and the growth of South Africa slowed down. Significantly over the same period, from 1.2 percent to 0.7 percent, under the impact of devastating Hurricanes Idai and Kenneth. [10]

Response to crises

In 2019, the African Union announced the year as the Year of Refugees, Returnees, and Internally-Displaced Persons in Africa, demonstrating Africa’s initiatives and solutions to large-scale issues. Countries in Africa host the most significant number of refugees globally, with Kenya, Ethiopia, and Uganda hosting 2.8 million refugees, mostly from neighboring countries. [11] Uganda and Ethiopia’s governments welcomed refugees, opening their borders and allowing access to land for migrant families, despite having few resources.

People leave their countries because of prolonged conflicts and issues such as civil wars and violence. Although the African Union has acknowledged the refugee crisis, the focus should be on internal conflicts since people will not travel back to their countries when there are still problems. Forced return is a human rights violation. Further improvement is required to reduce the number of conflicts in the continent, thus reducing refugees’ number. [12]

Challenges facing Africa’s rise

Despite the remarkable economic growth and overall improvement that Africa has witnessed, there are several challenges, such as corruption, civil conflict, and insufficient progress, the continent has to overcome to ultimately develop and end poverty.

Corruption

One of Sub-Saharan Africa’s main obstacles to achieving social, economic, and political developments is corruption. According to Transparency International, [13] corruption is defined as the “abuse of entrusted power for private gain.” Corruption, especially within governments and public organizations, deteriorates the public’s trust, hinders economic growth, worsens poverty, social division, and inequality, and weakens democracy.

Economies that suffer a high rate of corruption tend to have a lower percentage of development than economies with low corruption rates. Corrupt countries cannot function properly because it prevents laws from working truthfully, resulting in an adverse impact on the economy and political process. [14]

Corruption in Sub-Saharan Africa has been primarily characterized by its history of European colonialism, where governments controlled most of Sub-Saharan Africa’s economic and political affairs for decades. [15] European governments’ methods include persuading African elites and chiefs to cooperate with European governments and exploit their people for their personal gain.

According to Transparency International, Sub-Saharan Africa has the lowest score on the Corruption Perceptions Index (CPI), averaging just 32 out of 100 in 2020 (0n being the most corrupt, 100 is least corrupt).

Figure 3:

Source: Transparency International

Many developing countries in Africa have implemented democratic governance, thereby improving efficiency. However, presidential elections can sometimes be flawed as a result of fraud and corruption. The dire situation in Zimbabwe and DR Congo are cases in point. [16] The African Union, aware of this issue’s severity, devoted 2018 to the fight against corruption. As Africans become more educated, they become more aware and expressive of their nations’ problems and willing to hold officials accountable. [17]

Lack and misuse of natural resources

Africa’s improvement is still insufficient to meet the structural challenges that the continent suffers from. The dependency and economic exposure make African economies sensitive or prone to external shocks from the heavy dependence of these economies on exporting raw materials without introducing any manufacturing process to complement this, regardless of whether these materials are agricultural commodities, mineral wealth, or crude oil.

Given the minimal number of commodities, the high concentration of African exports makes it difficult for their economies to develop. A large proportion goes to a single market such as the European Union, China, or the US, making it more vulnerable to shocks resulting from fluctuations in consumer demand. This problem got worse due to the international division of labor imposed on African countries to become skilled in producing primary commodities, such as agricultural goods. African economies have no other option but to diversify their income sources to get out of the structural dilemma that impedes development. [18]

Trade deficit

African economies have long faced persistent current account imbalances, operated mainly by trade deficits and shortages. As domestic revenue mobilization continues to stay low in Africa, many African countries depend heavily on foreign sources to finance their current deficits, including foreign direct investment, portfolio investment, remittances, official development assistance, and external debt.

The impact of the crisis on remittances from workers abroad: Since 2010, remittances have been the most significant source of international financial flows to Africa, about a third of all total financial outflows. Remittances include the most stable source of flows, and their value has increased almost steadily since 2010. [19] According to World Bank, remittance flows to Sub-Saharan Africa accounted for $48 billion in 2019, greater than foreign direct investment. [20] The GCC countries and the EU is believed to be the largest remittance outflow to Sub-Saharan Africa.

Civil unrest

Several countries in East and Sub-Saharan Africa have a history of civil unrest and face frequent civil wars due to their ethnic diversity, failed governments, and poverty. Countries in Sub-Saharan Africa are at a higher risk of experiencing civil wars, given the lack of political rights, corruption, and the slow pace of economic development. [21]

Another study suggests that economic deficiencies and income inequality are the most likely reasons behind civil wars. Rebels upsurge when their economic, political, or religious rights are threatened or undermined. [22] To prevent civil wars in the future, the key strategy is to implement democratic reforms in African countries and efficiently manage Africa’s challenges.

Case studies

Some African nations – such as Botswana and Rwanda – are excellent examples of how good governance can uplift the nation and eliminate destructive factors. On the contrary, countries such as Zimbabwe have failed miserably, dooming their people to endless suffering.

Botswana

One of the biggest success stories is Botswana’s efficient governance, economic growth, and social development. The country gained independence in 1966 and has transformed from being one of the poorest countries to an upper-middle-income country, elevating its rank to what is projected to be a high-income country by 2036. The factors behind its success have been good governance, natural wealth, prudent economic management, and a small population.

Botswana’s stable political environment includes a multi-party democratic tradition, with general elections held every five years even though the ruling Botswana Democratic Party (BDP) has been in power since 1966. On October 23, 2019, Botswana held its 11th general election, with President Dr. Mokgweetsi Eric Masisi assuming the presidency. Regional and international missions and observers of the Botswana general elections called the 2019 general election fair and credible, emphasizing the election as the people’s will.

Another reason for Botswana’s success is the low rate of corruption. According to Transparency International Corruption Perception Index (CPI), [23] it has one of the lowest rates of corruption in Africa, ranking 35 out of 180 countries and a score of 60 out of 100 in 2020. Botswana’s corruption rate is relatively low because of its Directorate on Corruption and Economic Crimes (DCEC). [24] The DCEC, which the Government of Botswana established, has played a significant role in the fight against corruption. Their prominent roles are investigating allegations of corruption, prosecuting those responsible, and educating the public on the consequences of corruption and how to prevent it.

The primary source of national income is diamond mining, contributing 50 percent of the GDP. Because of its low corruption levels and political stability, Botswana has one of Africa’s highest GDP per capita rates. However, similar to the rest of the world, the Covid-19 pandemic has hit Africa, and its economy faces unprecedented challenges. [25]

Rwanda

As per 2018 statistics, Rwanda has a population of 12.5 million. Currently, it is politically stable since the civil war and the genocide of 1994 that killed almost a million people. The president and parliament are elected through general elections. Rwanda’s current president Paul Kagame rebuilt a war-torn country that suffered from one of the most brutal events in history. Rwanda was the first country in the world to have women holding most seats in parliament.

Rwanda’s economy has witnessed fast industrialization caused by effective government policies. The economic success the country has seen since the early 2000s enhanced the quality of life of numerous Rwandans. Its government’s clear vision has been one of the most significant factors for its speedy economic growth.

According to the International Monetary Fund, Rwanda has implemented significant economic and structural reforms. It has devised a seven-year development plan to become a middle-income country by 2035 and a high-income country by 2050. Growth averaged 7.5 percent over the decade to 2018, while per capita growth domestic product (GDP) grew 5 percent annually. This growth rate enabled Rwanda to reduce poverty from 77 percent in 2001 to 55 percent in 2017, thanks to the five-year Economic Development and Poverty Reduction Strategies. Today, Covid-19 has disrupted Rwanda, like the rest of the world, as it has reduced the flow of export and remittances from abroad. [26]

Zimbabwe

Zimbabwe is a striking example of the government’s failure to stand with the country and save it from abject poverty. The frequent reasons cited for the state of extreme poverty are colonialism and drought. Although these are valid reasons, other countries coping with similar circumstances in the region have improved their conditions far better than Zimbabwe.

Today, the amount of people living in extreme poverty in Zimbabwe is predicted to increase from 6.6 million in 2019 to 7.6 million in 2020 and eight million under the low-case scenario. Zimbabwe’s population is estimated at 14.5 million, which means that over 70 percent are poor. The GDP is estimated to have decreased by 8.1 percent in 2019, and the recession is supposed to continue in 2020 due to persistent climate shocks, and domestic vulnerabilities worsened by the Covid-19 pandemic. The country depends heavily on agriculture, but the frequent drought has forced farmers to abandon their farms. In 2019, Zimbabwe was hit by the Idai hurricane and suffered a horrible decline in power, food, and water.

Many analysts argue that poor governance is the leading cause of Zimbabwe’s underdevelopment. According to them, governments did not develop a manufacturing sector to support the fragile economy and offset the disastrous drought impact on agriculture. [27] Botswana and Rwanda have surpassed neighboring countries on the political and economic fronts. The success story of these two nations might encourage countries such as Zimbabwe and raise the hope that they may follow in their footsteps.

Covid-19 and Africa’s economy

The Covid-19 pandemic has hit all African countries, disrupted the global economy by breaking global value chains, leading to a sudden drop in commodity prices and a continuous decline in taxes and government revenues. The pandemic and social restrictions have also hit revenues from the travel and tourism sector in many African countries. All previous reasons were behind the negative expectations of the rate of African growth through 2020.

African countries’ exports and imports are also expected to decrease by at least 35 percent compared to 2019. Consequently, the losses in the value of exports are estimated at US$ 270 billion. Tourism is an important sector of economic activities in many African countries. This sector will be severely affected by Covid-19, especially with restrictions imposed on travel, border closures, and social distancing measures. With a value of $ 55.8 billion, equivalent to 2.6 percent of the African GDP, it provides 6.2 million jobs, and imposing travel restrictions will affect international airlines, including Ethiopian Airlines, EgyptAir, Kenya Airways, and South African. [28]

Remittances have also massively dropped in 2020 due to the pandemic. According to the World Bank, remittance flow to Sub-Saharan Africa region is predicted to fall by 23.1 percent in 2020. The massive decline in remittance flow to the region will indeed have an enormous effect on Sub-Saharan Africa’s GDP since remittance flows accounted for more than 2.8 percent ($48 billion) of the region’s total GDP.

Conclusion

Corruption, poor governance, conflict mismanagement, and limited resources have all been factors contributing to Africa’s slow development. However, African countries have achieved progress in development, varying from one country to another. Good governance is crucial in overcoming political, social, and economic issues, as seen in Rwanda and Botswana. Without inclusive and efficient governance, the continent will not achieve its economic and social targets. If governance is inefficient, human and natural resources will be mismanaged, and the efforts exerted would be of less use. Development should include natural resources such as agriculture, minerals, and industry.

Education is also a crucial factor for economic development and assists in the foundations for economic growth, peace, and gender equality. Education increases people’s productivity and creativity, increasing economic development, and social well-being. Education to most of the population in any country, the growth rate will continuously increase, hence increasing Africans’ living standards.

African governments must also focus on reducing unemployment rates, especially among the youth, to prevent many young people from leaving their countries to find jobs abroad. Governments need to implement policies to improve or reform labor standards, for instance, social protection, adequate wages, and work environments. Reducing corruption in Africa goes hand in hand with lowering unemployment rates and receiving a better education. If corruption is low in the country, there will be more opportunities to harness the talent that exists in society.

References:

[1] International Monetary Fund (IMF). (2020, March 3). IMF and Good Governance. Retrieved from IMF: https://www.imf.org/en/About/Factsheets/The-IMF-and-Good-Governance

[2] Signé, L., & Gurib-Fakim, A. (2019, January 25). Africa is an opportunity for the world: Overlooked progress in governance and human development. Brookings: https://www.brookings.edu/blog/africa-in-focus/2019/01/25/africa-is-an-opportunity-for-the-world-overlooked-progress-in-governance-and-human-development/

[3] Ibid.

[4] International Monetary Fund (IMF). (2020, March 3). IMF and Good Governance. IMF: https://www.imf.org/en/About/Factsheets/The-IMF-and-Good-Governance

[5] Sheng, Y. (2009, July 10). What is Good Governance? United Nations: Economic and Social Commission for Asia and the Pacific: https://www.unescap.org/sites/default/d8files/knowledge-products/good-governance.pdf

[6] International Security Sector Advisory Team (ISSAT). (n.d.). Ibrahim Index of African Governance (IIAG). ISSAT: https://issat.dcaf.ch/Learn/Resource-Library2/Tools/Ibrahim-Index-of-African-Governance-IIAG

[7] Mo Ibrahim Foundation. (n.d.). Ibrahim Index of African Governance (IIAG). Retrieved from Mo Ibrahim Foundation: https://mo.ibrahim.foundation/iiag

[8] Signé, L., & Gurib-Fakim, A. (2019, January 25). Africa is an opportunity for the world: Overlooked progress in governance and human development. Brookings: https://www.brookings.edu/blog/africa-in-focus/2019/01/25/africa-is-an-opportunity-for-the-world-overlooked-progress-in-governance-and-human-development/

[9] Ibid.

[10] African Development Bank Group. (2020). African Economic Outlook 2020: Africa’s economy forecast to grow despite external shocks. African Development Bank Group: https://www.afdb.org/en/news-and-events/press-releases/african-economic-outlook-2020-africas-economy-forecast-grow-despite-external-shocks-33839

[11] Signé, L., & Gurib-Fakim, A. (2019, January 25). Africa is an opportunity for the world: Overlooked progress in governance and human development. Brookings: https://www.brookings.edu/blog/africa-in-focus/2019/01/25/africa-is-an-opportunity-for-the-world-overlooked-progress-in-governance-and-human-development/

[12] Fröhlich, S. (2019, February 9). African Union seeks ‘durable solutions’ to the continent’s refugee crisis. DW: https://www.dw.com/en/african-union-seeks-durable-solutions-to-the-continents-refugee-crisis/a-47394196

[13] Transparency International. (n.d.). WHAT IS CORRUPTION? Transparency International: https://www.transparency.org/en/what-is-corruption

[14] Mirzayev, E. (2020, April 10). How Corruption Affects Emerging Economies. Investopedia: https://www.investopedia.com/articles/investing/012215/how-corruption-affects-emerging-economies.asp

[15] Duri, J. (2020). Sub-Saharan Africa: Overview of corruption and anti-corruption. Transparency International, 3.

[16] Signé, L., & Gurib-Fakim, A. (2019, January 25). Africa is an opportunity for the world: Overlooked progress in governance and human development. Retrieved from Brookings: https://www.brookings.edu/blog/africa-in-focus/2019/01/25/africa-is-an-opportunity-for-the-world-overlooked-progress-in-governance-and-human-development/

[17] Ibid.

[18] Bojang, M. (2017). Critical Issues Affecting Africa’s Development: EGovernment, Democracy and Democratic Principles, And Governance as an Alternative for SocioEconomic Development in Africa. Int. J. Youth Eco. 1, No. 1, 41-55.

[19] Ibid.

[20] World Bank. (n.d.). Personal remittances, received (current US$) – Sub-Saharan Africa. World Bank: https://data.worldbank.org/indicator/BX.TRF.PWKR.CD.DT?locations=ZG

[21] Elbadawi, I., & Sambanis, N. (2000). Why Are There So Many Civil Wars in Africa? Journal of African Economies, 1-31.

[22] Evaristus, A. (2019). “Investigating the Causes of Civil Wars in Sub-Saharan Africa” Case Study: The Central African Republic and South Sudan. J Pol Sci Pub Aff 7:363, 4.

[23] Transparency International. (n.d.). Botswana Country Data. Transparency International: https://www.transparency.org/en/countries/botswana

[24] Government of Botswana. (n.d.). Directorate on Corruption and Economic Crime. Gov.bw: https://www.gov.bw/ministries/directorate-corruption-and-economic-crime

[25] World Bank. (2020). The World Bank In Botswana. World Bank: https://www.worldbank.org/en/country/botswana/overview

[26][26] World Bank. (2021). The World Bank in Rwanda. World Bank: https://www.worldbank.org/en/country/rwanda/overview

[27] World Bank. (2020). The World Bank In Zimbabwe. World Bank: https://www.worldbank.org/en/country/zimbabwe/overview

[28] Gondwe, G. (2020). Assessing the Impact of COVID-19 on Africa’s Economic Development. UNCTAD/ALDC/MISC/2020/3, 11-17.

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