Africa’s failure to translate GDP growth into economic opportunities for its populations

Africa’s failure to translate GDP growth into economic opportunities for its populations

The 2017 Ibrahim Report on African Governance identifies perhaps the greatest challenge to economic growth: the fact that African governments have failed to produce environments that enable their citizens to pursue economic goals and that provide the opportunity to prosper.

Africa’s combined GDP has increased by +39.7% over the last decade, but this has not translated into a similar level of progress in providing sustainable economic opportunity for its citizens. In contrast, the increase in the African average score in this category of the IIAG is only +0.1 (a percentage increase of only +0.2%). Of the ten African countries with the largest percentage increase in GDP in the period 2008–2017, only four feature among the ten largest improvers at the category level over the decade: Kenya, Liberia, Rwanda and Zimbabwe.

In many respects, this failure to translate a country’s economic growth into financial wellness and financial stability for its citizens is a function of failed institutions and failed governance. We need to pay close attention to how the trends on overall governance are playing out for different countries on the continent.

As the Ibrahim Index of African Governance highlights in their latest 2017 report: ‘While in 2017 the range between the highest (Mauritius) and lowest (Somalia) governance scores is the smallest it has been in ten years, increasing divergence appears between country scores. In the earlier years of the last decade, countries were concentrated around the African average score, but over the last ten years have dispersed. Within the last three years, 18 countries displayed their worst overall governance performance in a decade, and 28 achieved their best in the same period, highlighting the diverging trends on the continent.

This is where the private sector, specifically employers, can play a more proactive role. By understanding where citizens are more concerned about delivery failure from the local governments, employers can consider where they might help fill the gaps for their employees. Note how continuing employment and health top the list. What we have learned from the progress in human development data is that health is probably the most improved governance score on the continent, but there is still a long way to go before most African nations can address the issue of universal healthcare. With good health being a core contributor to employee productivity, this places significant pressure on employers to fill the gap here in terms of addressing needs.