Globally, 2022 is not a good governance year. Just as the negative impact of the Covid-19 lockdown began to bring hope, Russia violated the international order by invading Ukraine. What Putin thought would take a few weeks has turned into almost a year of conflict.
It looks like there are some good options to end the war. The global impact is highly distortive, especially for African countries. Inflation (mainly food and fuel prices) combined with supply chain contraction to create the risk of stagflation – an economy facing the dual challenge of sclerotic growth and rising inflation. Economic challenges are too often a precursor to political instability.
Even before the Russian invasion of Ukraine, the global outlook was not positive. The Economist Intelligence Unit released its Democracy Index 2021 in early February 2022: “Democratization saw further changes in 2021, with the percentage of people living in a democracy falling to 50% and authoritarian regimes on the rise.”
For African countries, the assessment is particularly bleak. The indiscriminate lockdown proved to be an inappropriate government response to Covid-19, as hospital capacity is scarce to begin with and economic activity is more important to public health than in developed countries. This crushing of economic activity has second and third round effects that are yet to hit home.
Of the 44 countries in sub-Saharan Africa, 16 declined against the democratic score in the previous year. Mauritius is the only “complete democracy”, with Botswana, Cabo Verde, South Africa, Namibia, Ghana and Lesotho ranked as “flawed democracies”.
Fourteen countries are categorized as “hybrid regimes”, with some features of democracy carried out against an authoritarian background or the absence of basic civil liberties that usually lead to democratic consolidation (such as freedom of association for opposition parties).
The remaining 14 countries are ranked as authoritarian. West African countries are particularly vulnerable to instability, including hybrid regimes such as Nigeria.
The Economist Intelligence Unit noted: “The spread of jihadist groups across West Africa, coupled with Nigeria’s inability to act as a regional power broker, has fueled tensions between the government and the military, creating conditions for increased factionalism among competing elites and increased coups.”
Next year, 17 African countries will hold elections, including Nigeria. As the largest country in sub-Saharan Africa, what happens there is very important. Thankfully for Nigeria, the country’s two-term presidential term limit will not be breached.
It has been hard to fight for, and Obasanjo’s attempt to obtain a third term in 2006 was ultimately locked in the constitutional protection against incumbents seeking extension of the rule in the country. Incumbent Muhammadu Buhari will step down this year, probably to be replaced by Bola Ahmed Tinubu of the ruling All Progressives Congress.
Sierra Leone, Liberia, Togo, Benin, Gabon, Democratic Republic of the Congo, South Sudan, Madagascar and Zimbabwe are also set 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%. Debt servicing costs are also very high, largely due to an unreliable and rapidly weakening currency. The standard remedy to prevent inflation and strengthen the currency is to increase interest rates but such tightening of monetary policy is unlikely in an election year.
Having said that, the real economy in Zimbabwe is largely informal and the true (black market) exchange rate and currency prices are very different from what is officially reflected.
It seems highly unlikely that Zimbabwe will be able to hold free and fair elections, given the seemingly compromised position of the country’s electoral commission and various other issues. Therefore, it should be postponed until such time as it can be reliably implemented.
As the outlook for political economy across the continent (and the world) is not promising, it is important to reflect on some fundamentals of governance. Countries such as Zambia and Kenya, both of which have changed the ruling party last year at the ballot box – peacefully – seem to have solid economic growth if the political leadership in both countries implements rational policies that lock in sustainable growth.
Zambia is rich in copper and could attract investment, although it will probably need to improve its mining policy to do so. Over-reliance on copper can still be a problem, however. Kenya appears to be more fortunate in having a more diversified economy.
Resource-rich economies across the continent need to be more effective than they are today. Nigeria, Angola, Gabon, Ghana, Equatorial Guinea and Chad have natural fossil fuel prospects that, if managed well, will be a potential boon to their economies (although this line of reasoning is difficult because the risk of stranded assets is longer. run away).
In addition, mineral wealth in Botswana, South Africa, the Democratic Republic of the Congo, Namibia, Nigeria, Tanzania and Zimbabwe should be translated into strong export growth that makes import-driven inflation less taxed in these countries, although this is often short-lived. get the benefit of the term.
However, unlike Kenya, these countries are all vulnerable to various manifestations of the resource curse. Poor governance in finding commercially viable resources usually undermines the quality of institutions that will be successful in the future.
If African countries are to do better than currently predicted, a concerted focus must be directed towards improving the effectiveness of government and strengthening the ability of citizens to exercise their governance.
Resource wealth tends to create rents for ruling elites, who appropriate and distribute these rents to patronage networks if unchecked by citizens. Building checks and balances to prevent this dynamic is critical to future prosperity.
This is what institution-building is all about. Institutions are social systems – beliefs, norms, values and culture – that drive ordinary human behavior. In other words, they provide scaffolding to generate incentives.
Democracy is not a panacea for creating the kinds of norms and values that make for responsible political leadership. On the contrary, democracy will usually only develop if it emerges from the existing norms of holding leaders. This norm should be strengthened across the continent.
Another feature of resource wealth in the absence of strong institutions is that it tends to reduce the country’s manufacturing competitiveness. Exports of raw materials drive demand for the country’s currency, increasing its value. This makes imports more expensive and manufactured products also more expensive.
Because premature deindustrialization – countries exiting manufacturing with lower, and faster, per capita income levels than their industrialized counterparts – is particularly prevalent in southern Africa, heavy reliance on raw resource exports is a long-term problem.
Simply exporting resources will not solve the growing problem of youth unemployment. Smart (and preferably green) manufacturing is the only channel where job growth looks set to take off and stick.
Stronger institutions that enforce political accountability are a necessary (if not sufficient) condition for turning resource wealth into broad economic prosperity. That is why it is so important that civil society continues to demand that responsibility from our leaders.
Of course, it would also help if a state-owned entity like Eskom could keep the lights on (and produce power) but not being able to do so would also have to open the playing field to a more competitive field from independent power suppliers to feed the national grid (or create a micro-grid where the transmission network national yet not exist).
Clearly, much needs to be done to improve the current negative outlook and improve the governance of the continent in 2023.
Dr Ross Harvey is director of research and programs at Good Governance Africa. Create true governance in Africa by 2023