Globally, 2022 was not a year of good governance. Just when the negative impact of the Covid-19 lockdowns was beginning to bring hope, Russia violated the international order by invading Ukraine. What Putin thought would take a few weeks has turned into a nearly year-long conflict.
There seem to be few good options for ending that war. Its global impact has been highly distorting, especially for African countries. Inflation (particularly food and fuel prices) is combining with supply chain contraction to create stagflation risks: economies hit by the twin challenges of sclerotic growth and rising inflation. Economic challenges are too often a precursor to political instability.
Even before the Russian invasion of the Ukraine, the global outlook was not positive. The Economist Intelligence Unit published its 2021 Democracy Index in early February 2022: “Democratization suffered further setbacks in 2021, with the percentage of people living in a democracy falling well below 50% and authoritarian regimes gaining ground” .
For African countries, the assessment was particularly bleak. The indiscriminate lockdowns proved to be an inappropriate governance response to Covid-19, given that hospital capacity was already low to begin with and economic activity is more vital to public health than in more developed countries. The crushing of this economic activity has second and third round effects that will continue to appear.
Of the 44 countries in sub-Saharan Africa, 16 dropped compared to their democratic scores from the previous year. Mauritius was classified as the only “full democracy”, with Botswana, Cape Verde, South Africa, Namibia, Ghana and Lesotho as “flawed democracies”.
Fourteen countries were categorized as “hybrid regimes”, with some features of democracy operating in the context of authoritarian encroachment or the absence of basic civil liberties that typically foster democratic consolidation (such as freedom of association for opposition parties).
The remaining 14 countries were classified as totally authoritarian. West African states were particularly susceptible to growing instability, including hybrid regimes like Nigeria’s.
The Economist Intelligence Unit noted: “The expansion of jihadist groups in West Africa, coupled with Nigeria’s growing inability to act as a regional power broker, has led to increased tension between governments and the military, creating the conditions for a greater division into factions between competing elites and an increase in coups d’état”.
In the next year, 17 African states are scheduled to hold elections, including Nigeria. As the largest country in sub-Saharan Africa, what happens there really matters. Fortunately for Nigeria, the country’s two-term presidential limit is unlikely to be breached.
Much has been fought for, and Obasanjo’s bid for a third term in 2006 finally locked in the constitutional safeguard against incumbents seeking an extension of his rule in that country. Incumbent Muhammadu Buhari will step down this year, likely to be replaced by Bola Ahmed Tinubu of the ruling All Progressives Congress.
Sierra Leone, Liberia, Togo, Benin, Gabon, the Democratic Republic of the Congo, South Sudan, Madagascar and Zimbabwe are also scheduled for head-of-state or legislative elections.
Zimbabwe, of course, is closest to home. According to The Economist Intelligence Unit, the country faces an inflation risk (along with Sudan and Ethiopia) of more than 50%. Its debt-servicing costs are also extremely high, largely due to its unreliable and rapidly weakening currency. The standard treatment to curb inflation and strengthen the currency is to raise interest rates, but such a tightening of monetary policy seems unlikely in an election year.
Having said that, the real economy in Zimbabwe is largely informal and exchange rates and real (black market) currency prices are markedly different to those formally reflected.
It seems highly unlikely that Zimbabwe will be able to host free and fair elections, given the seemingly compromised position of the country’s electoral commission and various other issues. Therefore, they should be postponed until such time as they can be credibly carried out.
Given that the prospects for political economy across the continent (and the world) are not particularly rosy, it is important to reflect on some fundamentals of governance. Countries like Zambia and Kenya, which switched ruling parties at the polls last year—peacefully—seem poised for strong economic growth if the political leadership of both countries adopts sound policies that ensure sustainable growth.
Zambia is rich in copper and is likely to attract increasing investment, although it will surely have to improve its mining policy to do so. However, excessive reliance on copper could continue to be a problem. Kenya seems to be luckier because it is already more economically diversified.
Resource-rich economies across the continent should be performing far more efficiently than they are. Nigeria, Angola, Gabon, Ghana, Equatorial Guinea, and Chad all have natural fossil fuel prospects that, if well governed, would be a potential boon to their economies (although this line of reasoning is fraught with difficulties given the risk of stranded assets in the long term). to run).
Similarly, mineral wealth in Botswana, South Africa, the Democratic Republic of the Congo, Namibia, Nigeria, Tanzania and Zimbabwe should translate into strong export growth, making import-led inflation less onerous for these countries. countries, although this is usually only a short period of time. term benefit.
Unlike Kenya, however, these countries are all susceptible to various manifestations of the resource curse. Poor governance in discovering commercially viable resources has often undermined the quality of the institutions on which a country’s future success depends.
If African countries are to perform better than currently anticipated, a concerted focus must be directed toward improving government effectiveness and strengthening the capacities of citizens to hold their governments to account.
Resource wealth tends to generate extraordinary rents for ruling elites, who appropriate and distribute those rents to their patronage networks if left unchecked by the citizenry. Creating checks and balances to prevent this dynamic is critical to future prosperity.
That is what institution building is all about. Institutions are the social systems (beliefs, norms, values, and culture) that motivate regular human behavior. In other words, they provide the scaffolding to generate incentives.
Democracy is not a panacea for creating the kind of norms and values that create responsible political leadership. Rather, democracy will typically only thrive if it grows out of a pre-existing norm of holding leaders to account. This norm has to be strengthened throughout the continent.
A second worrying feature of resource wealth in the absence of strong institutions is that it tends to crowd out a country’s manufacturing competitiveness. Commodity exports increase the demand for a country’s currency, inflating its value. This makes imports more expensive and manufactured goods equally more expensive.
With premature deindustrialization (countries exiting manufacturing at lower rates of per capita income and earlier than their industrialized counterparts) is particularly prevalent in southern Africa, overreliance on commodity exports is a long-term problem.
The simple export of resources will not solve the growing problem of youth unemployment. Smart (and preferably green) manufacturing is the only channel through which job growth seems likely to begin and be sustained.
Stronger institutions that enforce political accountability are a necessary (if insufficient) condition for transforming resource wealth into broad-based economic prosperity. Therefore, it is critical that civil society continue to demand such accountability from our leaders.
Of course, it would also help if state entities like Eskom could keep the lights on (and power manufacturing), but their inability to do so should also open the playing field for a more competitive field of independent power providers to feed the grids. networks (or create microgrids where national transmission networks do not yet exist).
Clearly, there is much work to be done to improve the current negative outlook and improve governance on the continent in 2023.
Dr. Ross Harvey is Good Governance Africa’s Director of Research and Programs. Getting governance right in Africa by 2023
