Africa may be the world’s poorest, sickest, most corrupt, and most violent continent. But it is not a monolith. A World Bank study has found some signs that a few sub-Saharan African countries are making slow but steady progress in improving governance and curbing corruption by strengthening their courts and safeguarding basic political rights. The result is a slightly cleaner and more stable business environment, which is allowing investment and growth to accelerate.
In its annual survey of governance around the world, the World Bank found this year that seven African countries posted significant improvements in political stability, government effectiveness, rule of law, and control of corruption.
Daniel Kauffman, director of global programs at the World Bank Institute, which has ranked countries annually since 1996, says, there is a clear connection between governance and economic development. Kauffman calls it a 300 percent strategy, because one step forward in governance yields a three-fold improvement in incomes.
There is a catch: It requires patience. “This is a very, very long term [strategy], but if leaders want a place in the history books, they can do this. There are African countries that have improved, and we can already see an improvement in incomes in countries like Tanzania,” he explains.
Political stability as measured by the World Bank has improved in Angola, Rwanda, and Sierra Leone. Even the benighted Democratic Republic of Congo has seen an improvement in the quality of its regulatory framework.
Foreign investment in 2005—the latest year for which data is available—was $430 million, nearly three times the average for 1990 to 2000, according to the United Nations.
It’s not hard to see the link between governance and investment and growth. Take the case of Nigeria.
While Transparency International still ranks Nigeria among the most corrupt countries in the world, it has noted a slight improvement in controlling corruption since 1996 when Nigeria took last place in TI’s ranking. Last year it tied for 142nd place in a field of 163 countries.
The World Bank found that control of corruption in Nigeria has improved by 33 percent since 1996, but corruption remains a serious problem. Still, political stability has climbed by one-third and government effectiveness has tripled.
As a result, some companies that might not otherwise have done business in Nigeria are now helping to develop its economy and lift its standard of living.
Take South Africa’s MTN, a big cell phone operator that has expanded into 15 sub-Saharan African countries. Before MTN’s arrival in Nigeria, there were fewer than 750,000 phone lines in a country of 120 million. People had to wait up to 10 years for a landline and pay as much as $10,000 for the privilege. Instead of using telephones or e-mail, businesses had to rely on messengers.
MTN paid $285 million for an operating license in January 2001 and now has over 12 million clients in Nigeria, nearly as many as it has in South Africa. Nigeria accounted for 29 percent of the group’s $7 billion annual revenue last year.
Kauffmann and his team used surveys from around the world to measure development in each category, but he warns that although the data is reliable in describing trends and patterns, it remains a rough guide. Measuring corruption or political stability precisely is impossible.
And, it’s all relative. The data show that even the best performing African countries are still profoundly troubled, and a few have lost ground.
Yet Kauffman has hope for the continent. Countries that have made sustainable progress in governance are less likely to revert to anarchy, he says, noting: “It is more rare for a country that is steadily improving to reverse than for a country that has been stagnating for a while.”