Prosperity, economic freedoms on the rise in Africa

Growth in freedoms that enable citizens to abide by laws, elect and hold leaders to account and allow them to trade freely within and outside borders are all contributing to prosperity in Africa, according to a report.

African countries that suffered some of the worst and longest civil wars are recording the biggest moves in a freedom index, with the continent logging the biggest growth in a key prosperity score in close to 30 years.

The American think tank, Atlantic Council, shows Rwanda, Sierra Leone, and Ethiopia registered the biggest score changes in a global ranking of free and prosperous countries, between 1995 and 2022.

Of the three, Sierra Leone and Rwanda made the most significant gains in their freedom scores according to Atlantic Council’s Prosperity that Lasts: The 2023 Freedom and Prosperity Indexes.

Sierra Leone ranked 84th globally and increased its freedom rankings by 25 points, while Rwanda ranked 109th and improved its freedom score from 33.4 in 1995 to 53.5 in 2022.

“Rwanda’s freedom score rose by more than twenty points in the 1995-2022 period, following a civil war in 1994—the legal and economic freedom components drove most of the increase,” says the report.

The freedom scores reflect improved robustness in abiding by the rule of law, a more robust institutional framework to elect and hold political leaders into account and increasingly free and competitive markets to run businesses successfully.

The index focuses on six social indicators of prosperity – income, health, education, environment, minority rights, and inequality.

Consequently, all three countries recorded a twenty points increase in their prosperity scores- the largest movements globally over the period under review.

“Countries with higher scores in our Freedom Index also attain higher levels of prosperity. In all regions, countries that are free tend to also be prosperous,” according to a report.

These significant strides underscore the rise from the ashes of these countries that have, in turn, helped Africa record a higher-than-global average improvement in the rate of prosperity.

Africa’s prosperity score grew by 10 points over the review period compared to the global average of 0.4 points per year between 1995 and 2012 and only 0.1 points between 2012 and 2022 due to the impacts of the COVID-19 pandemic.

“Sub-Saharan Africa is the region where prosperity has grown fastest,” said the report’s authors.

Africa’s growing prosperity was buoyed by improvements in environment and health, whose scores rose by 25.7 and 15 points, respectively.

These factors continue to exhibit today in these and other countries, highlighting a sustained growth in economic freedoms and positive future prospects for Africa’s growth story.

Ethiopia, for instance, has embarked on economic reforms that promote private-sector participation in finance, telecommunications, logistics and manufacturing.

Among Key developments in modernising Ethiopia’s heavily state-run economy has been the privatisation of Ethio Telecom- following licensing of Kenyan operator Safaricom in May 2021.

In February, the Ethiopian government proposed partial privatisation of Ethio Telecom by selling up to 45% stake. This move has attracted three other foreign operators, France’s Orange, Abu Dhabi-headquartered Etisalat Group and Netherlands’ Veon, that have since expressed interest in the market.

Conversely, Rwanda is firming up its sustainable development journey by placing the circular economy at the core of its decision-making and practice.

In December 2022, the country of a thousand hills launched a 14-year Circular Economy Action Plan and Roadmap that will cost it US$211.2 million to manage waste and adopt clean production technologies.

Rwanda revised its green growth and climate resilience strategy in June this year.

“The revised Green Growth and Climate Resilience Strategy aims to guide national policy and planning in an integrated way, mainstream climate change into all sectors of the economy, and position Rwanda to access international climate funding and investment,” said Rwanda’s Minister of Environment, Dr Jeanne d’Arc Mujawamariya, in a statement.

Seychelles, which ranked 35th globally, leads Africa as the freest nation, with a freedom score of 79.7, followed by Cape Verde, ranked 40th with a score of 78.8.

Mauritius (47th) with a score of 74.7, Namibia (51st) with a score of 72.9, and Botswana (55th) with a score of 72, top Africa’s freest economies.

In North Africa, Tunisia ranked 93rd globally, with a score of 60.13 and Morocco came in at 92 with a score of 60.36.

Only Mauritius and Seychelles reached the index threshold for prosperous countries. Cape Verde made the cut as a fully free country, but it did not reach the category of prosperous nations, according to Atlantic Council.