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>Big Story >Governance for Sustainable Economic Development in Africa

Governance for Sustainable Economic Development in Africa

Quality of governance and leadership systems largely influence sustainable economic growth and development in any nation. “Good governance is perhaps the single most important factor in eradicating poverty and promoting development.” noted late Ghanaian Diplomat and former Secretary-General of the United Nations, Kofi Annan. Economic diversification reforms, policy revolutions, and policy implementations are only minor contributors to national growth and development. Quality of governance, however, is the deciding factor.

The Mo Ibrahim Foundation defines governance “as the provision of the political, social, and economic public goods and services that every citizen has the right to expect from their state, and that a state has the responsibility to deliver to its citizens.” Using the Ibrahim Index for African Governance (IIAG), the foundation measures the quality of governance in all 54 African countries yearly with four key components; Safety and Rule of Law, Participation and Human Rights, Sustainable Economic Opportunity, and Human Development. Each of these components contains subcomponents that comprise various markers that provide the quantifiable measures of the comprehensive elements of governance.

Mauritius Source: Aperture Works

In 2018, Mauritius emerged as the top-ranking country in overall governance, with a total score of 79.5 out of 100 points. With a moderate but steady real GDP growth averaging 3.8% over the last five years, the nation has experienced a consistent economic expansion primarily driven by tourism, exports, financial services, and agriculture (AFDB, 2020). In 2019, Mauritius recorded a GDP per capita of $11,361. Often touted as ‘an economic success story,’ this small East African Island nation is correlational evidence of the relationship between good governance and sustainable economic growth. The Mauritian government has enabled its economy to thrive steadily by developing and implementing key programs and policies such as its trade reforms and open trade policies, a social welfare system, and other administrative guidelines that favor human capital development. Their structural transition from agriculture to manufacturing and services has also boosted their economy – this goes on to show the government’s efforts at economic diversification.

South Sudan, on the other hand, ranked at the bottom of the 2018 Ibrahim Index for African Governance (IIAG) as one of the most poorly governed African countries with a total score of 19.3 out of 100 points. Commonly referred to as a war-torn economy, South Sudan is in the throes of a severe humanitarian crisis that has plunged its economy into a steep decline over the past seven years. Although the nation boasts as one of the most oil-dependent countries in the world – with 98% of the government’s annual operating budget and 80% of its GDP derived from oil, it noted a drastic 80% decline in GDP per capita from 2014 to 2017 (World Bank, 2019). Economic mismanagement, high levels of government corruption, and fiscal deficit from increased military spending have all contributed to this unfortunate decline of South Sudan’s economy. Notwithstanding, a recent analysis by the World Bank shows future growth promise for the country’s slow but feasible economic recovery.

Consequently, the need for good, inclusive, and effective governance rather than ‘mere governance’ – as Indian Prime Minister Narenda Modi calls it, has become more critical than ever in recent times. Policymaking and economic diversification strategies are no longer enough to foster significant sustainable development across Africa under the administration of insouciant leaders with poor governing abilities. The state of governance in South Sudan is not one exclusive only to them but can also be seen in different variations in other African countries. A government for growth must be active, participatory, transparent, and equally prepared to prioritize strategies for sustainable economic growth and development of the country. This type of governance, however, is significantly impeded by corruption.

Corruption is a grave barrier to economic, social, and political advancement, hindering effective governance for growth. Former President of India, Pratibha Patil once said, “corruption is the enemy of development and good governance. It must be gotten rid of. Both the government and the people at large must come together to achieve this national objective.” This fight against corruption has become a priority in many African countries. Although Sub-Saharan Africa emerged as the lowest-scoring region in the 2019 Corruption Perception Index (CPI) results, this, in many ways, heavily belies the impact of corruption on economic expansion and fiscal sustainability on the continent. The globalization of Africa cannot occur without a substantial eradication of money laundering practices. Embezzlement, electoral fraud, and bribery are only but a few of the many weeds of corruption overtaking economic and social advancement across all African countries. These corrupt practices in various sectors individually and collectively affect the sustainable economic growth of their nations.

Whereas according to Transparency International (2019), Africa is the world’s second-fastest-growing region, more than 100million Africans continue to live in extreme poverty. Corruption and misgovernance relentlessly obstruct all efforts made to bring these people out of poverty. Good governance and functional leadership systems are tremendously essential in improving the quality of life and developing human capital for economic growth and social advancement of every country. Good governance holds a central place in structural transformation (UNECA, 2016). When leaders do not follow the principles and practices of governing that puts its citizens at the forefront of growth, the result is a subpar quality of life for the citizens and continuous fiscal deficit.

Looking forward, albeit Africa is vast with endless possibilities for growth and sustainable economic development, good governance is the key to unlocking the greatness of what could be for our continent. Corruption  being both the product of and cause of poor governance can be prevailed upon by the collective and intentional efforts of African leaders and African nationals to facilitate the process of structural transformation. We must meet our political and financial administration challenges while also ensuring that solid and maintainable governance institutions are in place. With good governance, the ‘magic event’ that will be Africa’s evolution is more easily achievable. In the words of Benigno Aquino III, former President of the Philippines, “With good governance, life will improve for all.”

New Release: The African Economic Congress 2020 Report.