Background

The Africa Prosperity Report seeks to determine what level of prosperity African countries can and should be expected to deliver given their level of wealth. This is done by assessing a country’s level of wealth (GDP per capita) modelled against its overall ranking in the Legatum Institute's annual Prosperity Index (which uses eight economic and social factors including Entrepreneurship & Opportunity; Governance; Education; Health; Safety & Security; Personal Freedom; and Social Capital.) 

Key Findings

  • Rwanda has the biggest ‘Prosperity Surplus’ in Africa. Even though its GDP per capita is $1661, it came top of the rankings due to the significant reforms it has made recently to strengthen the rule of law and reduce corruption.
  • Interestingly, other large surpluses are found in Senegal and Burkina Faso, driven by over-achievement in Personal Freedom and Governance.
  • Central African Republic has the biggest ‘Prosperity Deficit’ in Africa. Its GDP per capita is a measly $594 and it has one of the lowest overall records of prosperity in the world.
  • Angola is significantly under-achieving. While it is one of the wealthier countries in Africa (GDP per capita of $6949), its over-reliance on one industry (oil) and its high unemployment rate and track record on civil liberties means it ranked just below Central African Republic as the second worst performing country.

This report was launched at the Legatum Institute on Wednesday 1 June 2016. The livestreamed event included keynote remarks from Lord Malloch-Brown, former United Nations Deputy Secretary General, followed by a panel discussion with experts.

Foreword

The Legatum Prosperity Index™ tells us that the story of human progress goes beyond economics. It tells us that for nations to flourish they must provide opportunity and freedom to their citizens. It shows how access to quality healthcare and education provides the foundations on which nations can grow. It proves that effective and transparent government empowers citizens to take control of their lives, and it shows that protection from violence and oppression, as well as strong social bonds, are crucial to a thriving society.

The 2016 Africa Prosperity Report underscores the importance of having these vital foundations in place in order to achieve prosperity. In providing a comprehensive view of what’s happening in Africa beyond traditional economic indicators, it casts a new perspective on enduring policy challenges.

Rwanda has the biggest ‘Prosperity Surplus’ in Africa. Even though its GDP per capita is $1661, it came top of the rankings due to the significant reforms it has made recently to strengthen the rule of law and reduce corruption. Interestingly, other large surpluses are found in Senegal and Burkina Faso, driven by over-achievement in Personal Freedom and Governance. Central African Republic has the biggest ‘Prosperity Deficit’ in Africa. Its GDP per capita is a measly $594 and it has one of the lowest overall records of prosperity in the world.

Angola is significantly under-achieving. While it is one of the wealthier countries in Africa (GDP per capita of $6949), its over-reliance on one industry (oil) and its high unemployment rate and track record on civil liberties means it ranked just below Central African Republic as the second worst performing country.

As falling commodity prices hit growth forecasts across the continent, this year’s report considers the legacy of prosperity delivery in Africa given a decade of strong growth.

Sub-Saharan Africa itself has made significant progress on prosperity, particularly in health and opportunity, but has still been outpaced in translating wealth into prosperity by both developing Asia and Europe. Given the low hanging fruit still available in Africa, that more rapid gains have not been made is surprising.

Within the region, we find vast variation in how well countries have done in transforming their wealth into prosperity for their citizens, from countries like Rwanda that have delivered a lot with very little, to countries like Angola that have delivered very little with a lot.

The report finds that the characteristics of delivering high levels of prosperity with your given wealth transcend wealth itself, a powerful message for policy-makers trying to write a new narrative of Africa Rising in a slow-growth climate. Indeed, these characteristics—economic complexity, good governance, and simple freedoms—are structural, and don’t require high growth rates to fix.

Despite the fact we find that Sub-Saharan Africa has been been outpaced by other parts of the developing world, our findings are optimistic about the potential for future prosperity gains, despite a more challenging economic climate.

We urge policy-makers across the continent to take the findings of this report and reflect on the state of the fundamental cornerstones of prosperity delivery at home. We hope that this report shows that slower-growth need not spell the end of rising prosperity in Africa, but rather demonstrates practical ways in which governments can deliver greater prosperity with the wealth they have.

We hope you enjoy this edition of the Africa Prosperity Report. To interact with the data, rankings and analysis visit www.prosperity.com.

Alexandra Mousavizadeh, Director of the Prosperity Index, Legatum Institute

Related

  • Economic Growth Failing to Deliver Prosperity for Many Africans, Study Says, The Guardian, 1 June 2016 [View]
  • 2016 Africa Prosperity Report, Press Release [View]
  • 2015 Africa Prosperity Summit, Dar es Salaam, Tanzania (May) [View]
  • 2014 Africa Prosperity Report [View]
  • 2013 Africa Prosperity Report [View]