The Legatum Institute, a London-based think tank’s Africa prosperity index, published on Wednesday, indicates that Malawi has dropped four places ranked at number 24th most prosperous African country, ahead of Nigeria – Africa’s biggest economy – at 26th rank.
The Legatum Institute’s Africa prosperity index, measures the human and economic prosperity of nations by eight subindexes , governance, economy, opportunity, freedom, health, education and security, as well as social bonds.
The amount of money a country has is one factor of prosperity, but the Legatum Institute considers more than that in its ranking, according to a report (pdf)..
The organisation compares 89 variables to come up with its list. These variables include traditional indicators like per capita gross domestic product and the number of people in full-time work as well as more interesting figures such as the number of secure internet servers a country has and how well rested people feel on a day-to-day basis.
The index looked at the African countries that have the most available data.
The survey shows that Malawi best performance is in the Governance sub-index, where it ranks24th in the continent with good indicators in rule of law, political rights and regulation quality.
However, there were concerns of “widespread” corruption.
Malawi’s lowest rank is in the Economy sub-index. This dimension measures classic aspects of the economy like GDP, unemployment, inflation and foreign direct investment.
The southern African nation has also performed badly in other Prosperity Index rates, including education, health, business and social capital.
Augustine Chipungu, Research Analyst -at the Legatum Institute, said: “The 2016 Africa Report sought to determine what level of prosperity African countries can and should be expected to deliver given their level of wealth. This was done by assessing their level of wealth (GDP per capita), and modelling it against their score in the Prosperity Index.”
He said :The difference between what they delivered, and expectation – the Prosperity Index gap – showed us which countries over-delivered i.e. which countries delivered more prosperity than expected given their wealth, and which under-delivered i.e. which countries delivered less prosperity than expected given their wealth.
“The results found that wealth is neither necessary nor sufficient for the improvement of prosperity delivery.”
Alexandra Mousavizadeh, a top economist and director of the Lengatum Prosperity Index, urges policy makers to take the finding of the report and “reflect on the state of the fundamental cornerstone of prosperity delivery at home.”
South Africa has been ranked the most prosperous country in the African continent followed by Botswana and Morocco
Ghana with poor economic rating is on number 9, though doing well in entrepreneurship and opportunity.
The study found that some African countries are much better at creating prosperity than others, and this is disproportionate to the amount of wealth they have.
Researchers gave the example of Rwanda, which despite having a third of the wealth of oil-rich Angola, has been far more successful at creating a prosperous society and is the most improved country since 2009 rising 10 ranks within Africa .
War-torn Central African Republic (CAR) is the least prosperous country in Africa, whose best rank in the sub-indexes was in personal freedom.
Chad and Burundi also join CAR in the least prosperous countries in Africa. Others being the Democratic Republic of Congo, Sudan, oil –rich Angola, Liberia, Guinea, Togo and Zimbabwe.
Despite Africa enjoying high growth rates – averaging 5.5% in the last decade alone- the continent has been outpaced in prosperity delivery when compared to other developing countries in Europe and Asia, the survey revealed.
In addition, the continent has also been outpaced in other key targets. For example, in 1990, the number of people living below US$1.90 in East Asia was 60.6%, whilst in Sub-Saharan Africa, it was 56.8%. By 2012, this figure was 42.7% in Sub-Saharan and 7.2% in East Asia.
This is reflected in the Prosperity Index where the median rank for Sub-Saharan Africa is 98.5, whilst in Asia, it is 57.
Yvonne Mhango, an economist at Renaissance Capital, is quoted in The Guardian newspaper of UK saying the African continent needed several more years of significant growth – “4%-5% at the very least” – for wealth to start trickling down. Also, growth is not the be-all and end-all, she said.
“It seems counterintuitive, but what I’ve observed in the continent [is] that there’s no substitute for governance. It doesn’t matter what commodity a country is producing and at what price it’s selling – if they don’t have the right leaders in place that are putting forward the right policies, you will not see that trickle down to the people,” Mhango said.
She noted that some of the wealthiest countries on paper have some of the most abjectly poor people on the continent.Follow and Subscribe Nyasa TV :