World Competitiveness Center
August 2025
IMD Africa Prosperity Rating 2025
Copyright © 2025
IMD – International Institute for Management Development
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email: wccinfo@imd.org
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Database: https://worldcompetitiveness.imd.org
World Competitiveness Center
Professor Arturo Bris Director
José Caballero Senior Economist
Christos Cabolis Chief Economist & Head of Operations
Matisse Graf WCC Consultant
Fabian Grimm Research Specialist
Odete Madureira WCC Coordinator
William Milner Associate Director
Chinar Sharma Projects Analyst
Alice Tozer Content Manager
For more than 35 years, the IMD World Competitiveness Center has pioneered research on how countries and companies compete to lay the foundations for sustainable value creation. The competitiveness of nations is probably one of the most significant developments in modern management and IMD is committed to leading the field and to provide the government, business, and academic communities with the following services:
Competitiveness Special Reports
Competitiveness Prognostic Reports
Workshops/Mega Dives on Competitiveness
IMD World Competitiveness Ranking
IMD World Digital Competitiveness Ranking
IMD World Talent Ranking
Hinrich-IMD Sustainable Trade Index
Smart City Index
World Competitiveness Center
This report measures prosperity using 80 indicators to provide a broad African Prosperity Rating. Our flagship publication, The IMD World Competitiveness Ranking, uses more than 250 statistical data points combined with a comprehensive executive opinion survey to provide a more detailed evaluation of competitiveness. The statistics provide an objective snapshot of the past, while the survey is much more current and measures the perceptions of business executives.
We currently measure 69 countries. Whether or not an economy is included is based on the following conditions:
• How well the economy is covered by international organizations (such as UN, WTO, and IMF/WB) in terms of statistical data. The availability of comparable international statistics is essential to the World Competitiveness Yearbook’s success.
• The economic wealth, stability and regional importance of the economy.
• The availability of a Partner Institute within the economy to help with the statistics and Executive Opinion Survey.
The World Competitiveness Center works in cooperation with a network of 74 Partner Institutes in 60 countries
Partner Institutes provide extensive and ongoing support in two key areas:
• Collaborating with the Center to collect and validate statistical data
• Reaching out to their networks of senior business executives to ensure an adequate sample of respondents to our Executive Opinion Survey
If your organization is interested in supporting your country’s competitiveness development by becoming a Partner Institute, please contact us at wccinfo@imd.org
What is competitiveness, and why does it matter for Africa?
Professor Arturo Bris Director
Economic competitiveness is the ability of economies to establish and sustain an environment conducive to long-term value creation. Such value implies the longterm profitability of firms as well as their broader socioeconomic contributions, including economic growth, job creation, improved quality of life, and expanded opportunities for citizens. In this sense, competitiveness goes beyond productivity or GDP figures. It is a holistic concept that encompasses overall prosperity and ensures that citizens remain central to the equation.
In this series of reports, we discuss some competitiveness principles, such as the importance of economic stability and just how big a role reliable institutions play in creating thriving societies.
It is important to acknowledge, however, that no universal formula for achieving greater competitiveness exists. For instance, Krugman’s well-known article “Competitiveness: A Dangerous Obsession”1 argues that competitiveness requires a continuous and dynamic process of comparative advantages over a prolonged period, whereby economies then compete against each other in international markets to profit from these sustained advantages.
In Krugman’s view, an excessive focus on competitiveness can distract governments from their fundamental objective of improving citizens’ welfare. Such a view differs from the one we propose as it overly focuses on the importance of productivity in the competitiveness equation. Our framework goes beyond productivity to capture the combined impact of regulation, institutions, and the interplay of public and private actors in creating a competitive national framework.
Though an economy’s productivity is closely related to its prosperity via channels such as the value created by productive enterprises and productivity’s determining role in setting wages, competitiveness is the result of an optimal combination of several other inputs, including but not limited to natural endowments, geographical location, political choices, the enforcement of good regulation, and strong health and education systems. Competitiveness is therefore inherently intertwined with public institutions’ decisions that set regulations and provide the framework in which the private sector operates, while firms drive innovation, create jobs and generate long-term value.
When an economy becomes more productive, it attracts foreign investment, creates jobs, generates greater output, and generally experiences positive economic growth. Greater competitiveness, however, is only achieved when economies transform short-term productive advantages into lasting and inclusive
1 Krugman, P. R. (1994). Competitiveness: A dangerous obsession. Foreign Affairs, 73 (4), 28-44.
positive multiplier effects. This requires mechanisms such as tax revenues that can be reinvested in key infrastructure, including roads, hospitals, and schools so that growth contributes to citizen’s welfare.
Competitiveness, in other words, is built on a fair system that redistributes welfare and offers a greater quality of life to all its citizens. In this respect, productivity is a necessary but insufficient condition to achieve competitiveness as it brings about value creation without much consideration for equitability or fairness. Thriving economies are those that effectively build on their strengths to offset any weaknesses that may hinder their ability to generate greater prosperity for their citizens. Optimizing resources to remain productive and ensuring that economic benefits are redistributed fairly are therefore essential measures to ensure a resilient foundation for sustainable national competitiveness. 2
Why does competitiveness matter for African economies, and to what extent do the continent’s strengths and weaknesses play a role in shaping the roadmap to its continued development? African economies have a wide range of different productive inputs that can contribute to their prosperity and long-term value creation.
However, it is how they manage their productive outputs that most strongly impacts the direction of their socioeconomic development. For instance, the strength of their institutions will determine the extent to which their economies are able to support an agile and resilient private sector and encourage a businessfriendly environment. Robust governance and reliable infrastructure further contribute to increasing entrepreneurs’ confidence when starting a business, or a corporation’s confidence to expand operations within a given country.
There are six channels through which competitiveness is particularly relevant for African economies:
Competitiveness encourages a cycle of positive economic reinforcement whereby it offers a framework conducive to greater innovation and productivity, which in turn spurs economic activity and growth, and leads to higher wages. For African economies – particularly those that rely heavily on their natural resources to achieve growth – enhancing competitiveness can provide a path towards diversifying economic
2 The links between productivity, prosperity and competitiveness are inspired from examples cited by Arturo Bris director of the IMD World Competitiveness Center. See Bris, A. (2021). The Right Place: How National Competitiveness Makes or Breaks Companies. Routledge.
activities and reducing their dependency on volatile commodity markets. Such a process can ultimately lead to a more robust economic base and more sustainable development.
Economies with high levels of competitiveness are more likely to be attractive to foreign and domestic investors alike. Any improvements by African economies in measures of competitiveness, such as the quality of governance, infrastructure development, and business-friendly environment, could significantly improve the appeal of the economies as investment destinations. The latter could further drive job creation, technological transfer, and the retention of domestic talent, as well as attractiveness to foreign talent.
With the African continent experiencing rapid population growth and an increasing number of economically active individuals, having competitive local firms and industries can play a critical role in creating new jobs to absorb this growing labor force. Promoting competitiveness-enhancing policies such as investments in infrastructure can support industries and businesses and allow them to thrive, which can in turn generate new employment opportunities, reduce unemployment, and ultimately lead to lower poverty levels.
Some countries on the continent are still suffering from a lack of economic diversification. The latter is partly the result of inadequate development policies undertaken in the 1980s and 1990s. The adoption of those policies came following stringent and largely ineffective Structural Adjustment Programs (SAPs), imposed by International Financial Institutions as a precondition for receiving loans or debt restructuring. Competitiveness in this context can equip economies with the necessary tools to better withstand global challenges such as pandemics, climate-related shocks, or economic recessions. It does so by building strong institutions, encouraging investment in infrastructure, and fostering innovation. Such mechanisms, in the long run, lead to increased resilience to external shocks and changing global dynamics.
The well-being of people is at the heart of competitiveness. Improving education, healthcare, infrastructure, governance, and welfare systems –all key pillars of competitiveness –directly impacts citizens’ quality of life. In the African context, depending on the economies’ initial productive inputs and demographic structures, using available resources to address gaps in these areas can lead to much broader societal benefits.
Trade agreements and the diversity in the number of export partners and goods play a key role in improving the competitiveness of economies. Through initiatives like the African Continental Free Trade Area (AfCFTA), effective since 2019 and fully operational since 2021, economies on the continent can strengthen regional trade and collaboration; not only boosting intra-African trade but also positioning Africa as a stronger player in global markets.
Competitiveness is not limited to economic metrics. It is also about creating dynamic and thriving societies that are agile, adaptive, and flexible such that they can face global challenges effectively and seize opportunities presented by rapidly changing markets.
For African economies, prioritizing competitiveness offers a pathway to sustainable growth and development, inclusivity, resilience, and global relevance. Our research suggests that long-term competitiveness depends on strong and reliable institutions, a business-friendly environment that supports innovation, respect for the rule of law, and an effective education system oriented towards the future.
This report explores the key challenges hindering African competitiveness and identifies the economies that are performing most strongly in overcoming these barriers. By adapting our framework to contextualize these findings within Africa’s realities, we hope that this report provides a data-driven foundation for policymaking and highlights which economies have the highest potential to achieve long-term prosperity for their citizens.
Mauritius
Seychelles
South
Africa
Botswana
Cabo
Verde
Egypt, Arab Rep.
Kenya
Namibia
Tunisia
Equatorial
Guinea
Gabon
Ghana
Libya
Morocco
Sao Tome and Principe
Senegal
Algeria
Benin
Côte d'Ivoire
Eswatini
Ethiopia
Lesotho
Madagascar
Rwanda
Tanzania
Angola
Cameroon
Djibouti
Gambia, The Liberia
Malawi
Nigeria
Sierra
Leone
Togo
Uganda
Zambia
Burundi
Comoros
Congo, Rep.
Eritrea
Guinea-Bissau
Mauritania
Mozambique
Niger
Zimbabwe
Burkina
Faso
Central
African
Republic
Congo, Dem. Rep.
Guinea
Mali
Chad
Somalia
South
Sudan
Sudan
Mauritius
Seychelles
Benin
Mozambique
Senegal
Côte d'Ivoire
Egypt, Arab Rep.
Equatorial Guinea
Ethiopia
Madagascar
Morocco
Niger
Tanzania
Togo
Congo, Rep.
Gambia, The Ghana
Kenya
Liberia
Libya
Namibia
Sierra
Tunisia
Uganda
Algeria
Cameroon
Chad
Congo, Dem. Rep.
Djibouti
Eritrea
Gabon
Mauritania
Nigeria
Sao Tome and Principe
South Africa
Cabo Verde
Lesotho
Malawi
Rwanda
Zambia
Angola
Botswana
Burkina Faso
Burundi
Central African Republic
Comoros
Eswatini
Guinea
Guinea-Bissau
Mali
Somalia
South Sudan
Sudan
Zimbabwe
Botswana
Mauritius
Cabo
Verde
Lesotho
Namibia
Seychelles
South
Africa
Benin
Gambia, The Ghana
Kenya
Liberia
Madagascar
Malawi
Sao Tome and Principe
Sierra
Leone
Tanzania
Angola
Comoros
Côte d'Ivoire
Djibouti
Eswatini
Mauritania
Rwanda
Senegal
Tunisia
Zambia
Ethiopia
Guinea-Bissau
Morocco
Mozambique
Niger
Nigeria
Somalia
Zimbabwe
Burkina Faso
Burundi
Cameroon
Central African
Republic
Congo, Dem. Rep.
Equatorial
Guinea
Eritrea
Gabon
Guinea
Libya
Togo
Uganda
Congo, Rep.
Egypt, Arab Rep.
South
Mali
Sudan
Algeria
Chad
Sudan
South
Botswana
Egypt,
Eswatini
Kenya
Libya
Mauritius
Cameroon
Congo, Rep. Gabon
Namibia
Nigeria
Rwanda
Seychelles
Sao
Central
Lesotho
Morocco
South
Côte
Eritrea
Niger Senegal
Uganda
Burundi
Chad
Gambia, The Guinea-Bissau
Madagascar
Malawi
Tanzania
Togo
Benin
Comoros
Congo, Dem. Rep.
Djibouti
Guinea
Mozambique
Sierra
Somalia
Sudan
Zambia
Mauritania
Cabo Verde
Egypt, Arab Rep.
Mauritius
Morocco
Seychelles
Tunisia
Algeria
Gabon
Ghana
Libya
South Africa
Botswana
Equatorial
Guinea
Kenya
Namibia
Sao Tome and Principe
Senegal
Comoros
Eswatini
Ethiopia
Madagascar
Mauritania
Rwanda
Sierra Leone
Tanzania
Uganda
Angola
Burundi
Cameroon
Côte d'Ivoire
Djibouti
Eritrea
Lesotho
Sudan
Togo
Zambia
Zimbabwe
Benin
Congo, Rep.
Gambia, The Guinea-Bissau
Liberia
Mali
Burkina Faso
Congo, Dem. Rep.
Guinea
Malawi
Mozambique
Central African
Nigeria
Republic
Chad
Niger
Somalia
South
Sudan
José Caballero Senior Economist
Fabian Grimm Research Specialist
The global economy is at a crossroads. The ongoing trade war between the major global economies signals that a rebalance of power may occur in the foreseeable future. In this context, Africa is experiencing an important moment in its economic development, exhibiting vast potential to become a global engine of growth and innovation.
The continent boasts a youthful population, abundant natural resources, and a rapidly expanding digital landscape. However, despite such advantages, Africa’s attempts to advance its competitiveness are hindered by a series of persistent barriers that prevent it from fully realizing its economic potential. Among the most significant of these are economic obstacles, including inadequate infrastructure, high trade costs, and limited access to reliable energy. These factors restrict the ability of businesses to scale, innovate, and participate effectively in both regional and international trade.
Additionally, Africa’s heavy reliance on commodity exports continuously exposes its economies to external shocks, while high unemployment rates, particularly among the youth, underline an urgent need for inclusive growth strategies. Beyond economic constraints, issues related to governance and institutional capacity further hinder progress toward competitiveness. Weak regulatory frameworks, inconsistent policy implementation, and corruption undermine investor confidence and stifle entrepreneurship. In addition, managerial dynamics within African enterprises, especially small and medium-sized businesses, are often characterized by skills gaps and limited access to finance.
Finally, issues related to social empowerment – for instance, access to health and education – remain a constraint to greater innovation and resilience across the continent, and thus to its long-term competitiveness.
In this section of the report, we review a series of economic challenges the continent faces, as well as institutional and governance barriers and managerial dynamics. We also identify different aspects of social empowerment and their interactions with various socioeconomic and political dimensions.
Economically speaking, there is a lot of room for improvement in the advancement of African competitiveness. Here are three areas of focus that are particularly relevant to the continent:
In 2024, the global trade environment remained relatively fragile with a backdrop of escalating geopolitical tensions, rising global fragmentation, and an increasingly high occurrence of supply chain disruptions. These challenges were exacerbated by protracted trade and technology wars between the world’s two largest trading economies: the United States and China. As a result, African economies, the majority of which are natural resource net exporters (i.e., exporters of crude oil, gas, wood, and minerals), were forced to operate within a context of declining global merchandise trade volumes. According to estimates by the World Trade Organization (WTO), the latter contracted by 1.2% in 2023.
Global supply chains of grain, energy, and gas were strongly affected by the protraction of the Russia-Ukraine war and the outbreak of the Gaza-Israel armed conflict, which considerably destabilized the Middle East in 2024. The resulting inflationary pressures experienced across the globe forced many central banks to implement and maintain tight monetary policies that have resulted in only moderate levels of investment and growth.
Such a climate of uncertainty has contracted global demand and dampened overall levels of international trade. In this context, African economies have experienced adverse effects directly. The African Trade Report 2024 reveals that, after achieving an impressive 15.93% growth in 2022, the continent’s merchandise trade declined by 6.3% in 2023 – representing a total contraction of around $100bn.1
One of the continent’s major economic challenges, nevertheless, is the lack of diversification of its production and exports. In 2021, minerals made up over 39% of all African merchandise exports, followed by precious stones (18%), agricultural products (13%), and metals (9%). Whereas the share of the latter in total exports has remained stable over the last two decades, consistently ranging between 4% and 8%, the share of precious stones in the export basket has drastically increased from 7.5% to nearly 18% over the same period, ending 2021.
1 Afreximbank (2024). “The African Trade Report 2024: Climate Implications of the AfCFTA Implementation”
With oil accounting for more than 36% of the region’s export basket, volatility in crude oil prices, which contracted by more than 17.2% in 2023, 2 continues to have a determining impact on the prosperity and export revenues of African economies. Such over-dependency on the volatile pricing of commodities results in high instability and fiscal volatility for many leading African oil exporters such as Angola, Equatorial Guinea, Gabon, Libya, and Nigeria.
Similar trends of trade concentration are observed through the small number of countries that contribute to most of Africa’s export volumes. In fact, the combined share of Africa’s top five export economies consistently exceeds 50% of the continent’s total exports.
In 2022, South Africa alone contributed to nearly one-quarter of total exports within the region.3 Other important players include Algeria, Angola, the Democratic Republic of the Congo (DRC), Egypt, and Nigeria, three of which are notorious oil exporters. The fact that more than half of the continent’s export volumes are traded by just 10% of African economies highlights the uneven distribution of export capabilities across the continent. It is worth noting that some economies, such as Rwanda and Zambia, have recently experienced aboveaverage growth compared to their peers. However, they continue to represent a small fraction of total exports and are therefore not able to make a substantial contribution to Africa’s overall export diversification.
Similarly, African economies continue to experience a lack of diversification with respect to trading partners. Historically, African international trade has been mostly undertaken with its European counterparts, particularly since the formation of the European Union (EU). However, such a trend has gradually become less significant over the years, and the emergence of new players from the BRICS, such as China and India, has led to a steady increase in the geographical diversification of trading partners for African economies. Whereas EU countries represented nearly half of Africa’s merchandise exports in the 1990s, this number declined to just under 30% in the decade 2014-2023. Conversely, Asia’s share of merchandise exports with Africa over the same period has increased significantly from 4.5% to 26%.4 In terms of overall trade volumes, China has overtaken the United States as the most prominent destination for African products since 2012, and recent years have seen the emergence of the
United Arab Emirates as the second-highest importer of African products, with its total share amounting to nearly 7% of African exports in 2021.5
Though trade diversification in both products and export partners has marginally improved in recent years, the African continent remains a peripheral player on the global stage. Despite continued efforts to improve the status quo through policies and initiatives encouraging trade diversification, the share of African exports globally has stagnated between 2.5 and 3% in the past three years.
It is therefore critical for African governments to implement practical policies and measures that aim to incentivize investments in trade-related infrastructure and logistics. In addition, enhancing processing and manufacturing capacities will ensure that the profitability and added value of production remain contained within the continent. Focusing on developing intra-African value chains and building regional supply chains could lead to significant benefits through advantages like economies of scale and reduced production costs. Also, broadening Africa’s sources of growth away from the extraction and export of primary commodities could fundamentally transform and improve the profitability of African trade.
While a declining and aging population pattern threatens many world economies –particularly in Western Europe and East Asia – Africa’s population is experiencing the opposite trend. By 2030, it is expected that around half of the new entrants into the global labor force will come from subSaharan Africa, requiring the creation of up to 15 million new jobs annually.6 The latter will need an improvement in the quality of employment opportunities. To this end, the region needs to transform its informal jobs market and support conditions that are conducive to job growth in higher productivity industries.
By 2030, it is expected that around half of the new entrants into the global labor force will come from sub-Saharan Africa, requiring the creation of up to 15 million new jobs annually “
2 Institute for Competitiveness Africa (2024). “Africa Export Competitiveness Report 2023”, Chapter 2.
3 Ibid.
4 From Afreximbank’s African Trade Report 2024. Data source: IMF Direction of Trade Statistics (DOTS), 2023.
The African continent has witnessed substantial economic growth over the past two decades. Despite rising per capita income during that period, unemployment and poverty levels have remained high. In this context, a paradox of economic growth has arisen, one in which growth fails to deliver widespread employment opportunities. This phenomenon is particularly pronounced in capital-intensive industries like oil and mining, where forward and backward linkages are limited and positive spillover effects into the broader domestic economy are few.
5 Institute for Competitiveness Africa (2024). “Africa Export Competitiveness Report 2023”, page 21. 6 IMF Blog. (2024). “The Clock is Ticking on Sub-Saharan Africa’s Urgent Job Creation Challenge”.
West Africa represents such a striking economic paradox: despite experiencing high growth rates and rising per capita income, poverty levels and unemployment remain largely unchanged. Observers highlight that the region’s per capita income nearly doubled from around $1,000 in 2000 to almost $2,000 in 2016, with some economies (like Cabo Verde) outperforming their regional peers during this period.7 However, such growth – fueled primarily by capital-intensive sectors such as oil, mining, and other extractive industries –failed to generate substantial local employment. Similarly, improvements in quality of life indicators, such as the Human Development Index, or environmental metrics like pollution levels and access to safe drinking water, have been minimal over the same timeframe.
Similarly, in the case of South Africa’s employment and growth trends, structural unemployment persists despite prolonged periods of economic growth.8 Studies point out that the existence of a clear mismatch between the skills required on the demand side of the market compared to those available on the supply side is exacerbated by insufficient investments in sectors capable of creating new jobs effectively.9 This apparent disconnect leads to a ‘jobless growth,’ whereby economic progress in terms of output does not adequately benefit the wider economy if intra-industry or intra-sector links are weak.10 Structural changes, including sector-specific development strategies, improved labor regulations, and targeted skills training, are needed to ensure that growth is inclusive and leads to meaningful employment gains, especially for the youth and women who remain disproportionately affected by joblessness.
In this context, informal labor markets and wage regulation play a significant role in determining job growth. In fact, the predominance of informal labor represents a considerable challenge for African economies, particularly in subSaharan Africa, where formal salaried employees make up less than 20% of the total labor force, in large part due to subsistence agriculture and urban informal employment.11 The existence of this dual labor market structure complicates the implementation of policies such as minimum wage regulations, which typically apply only to formal wage earners and, therefore, cover only a minority of the workforce. The informal sector, characterized by a lack of social protection and labor rights, limits the effectiveness of labor policies and exposes affected workers to additional vulnerabilities such as income instability and hazardous working conditions. Noncompliance with minimum wage laws and other labor-
7 Mbaye, A. A., & Gueye, F. (2018). Labor markets and jobs in West Africa (Working Paper Series No. 297). African Development Bank.
8 Meyer, D. F. (2017). “An analysis of the short- and long-run effects of economic growth on employment in South Africa”. International Journal of Economics and Finance Studies, 9(1), 177–193.
9 Ibid.
10 Ibid.
11 Bhorat, H., Kanbur, R., & Stanwix, B. (2017). Minimum wages in Sub-Saharan Africa: A primer. The World Bank Research Observer, 32(1), 21–74.
related policies is high, with a significant lack of understanding of the true underpinnings of this relationship due to poor accessibility and availability of quality data.12 This is particularly the case in the sub-Saharan Africa region.
A crucial challenge in the African context is the necessity to bridge the gap between de jure labor regulations and de facto enforcement.13 The existing disparity is partly due to weak institutional capacity, corruption, and the fragmented nature of labor markets with large informal sectors and limited state reach. Corruption undermines trust in labor institutions, which leads to an environment where compliance is neither monitored effectively nor enforced or incentivized. Addressing such enforcement gaps is essential to improving the competitiveness of African labor markets. The latter requires efficient institutions that support sustainable value creation.
Strengthening institutions to enhance enforcement capacity, reducing corruption, and integrating informal workers into the formal economy are critical steps to ensure that labor regulations translate into tangible improvements in worker welfare. In this respect, the role of the formal private sector is crucial in acting as a vector of employment opportunities and incentivizing smaller informal businesses to formalize their status. This could ultimately lead to greater levels of inclusivity, higher fiscal revenue, and a generally more stable labor market that offers more individuals the safety net of social and worker protection.
The formal private sector is crucial in acting as a vector of employment opportunities
African economies would greatly benefit from more aggregated data on labor force participation, which would include informal and youth employment numbers as well as information pertaining to any socioeconomic disparities. The focus on improving and enhancing the statistical collection capacities of national institutions is often overlooked, primarily due to its relatively low direct impact on citizens. While this is understandable from a political standpoint, as leaders aim to tackle more pressing issues, such as containing inflationary pressures, more robust and better-quality data on issues related to the labor market should be at the forefront of any policy. The limited access to accurate and timely data makes it difficult to develop meaningful and impactful employment strategies.
Moreover, the informal sector’s extensive presence makes data collection challenging, leading to a lack of knowledge regarding the actual conditions faced
12 Ibid. 13 Ibid.
by workers. Addressing these data gaps is crucial for designing effective labor policies that can enhance competitiveness by providing a clearer picture of labor dynamics and enabling more targeted interventions for vulnerable individuals. Further work is also needed to better understand the determinants of noncompliance with labor regulations and laws. Though noncompliance is widespread across the continent, the underlying reasons are not well understood. Increasing such understanding requires further research into enforcement mechanisms and their effectiveness. Understanding such factors can lead to better and more effective regulatory frameworks that support fairer wages and improved labor conditions, both of which are crucial for the overall prosperity of African citizens.
Regulatory frameworks that support fairer wages and improved labor conditions are crucial for the overall prosperity of African citizens
Addressing these multifaceted issues requires a comprehensive and strategic approach. Key components include improving data collection methodologies to capture the realities of informal employment, better assessing gender parity, and understanding the drivers of noncompliance with labor regulations. In addition, targeted policy interventions should focus on fostering formal employment, enhancing skills development, and supporting underrepresented groups, such as women and young people, through inclusive labor policies. Strengthening institutional capacity and reducing corruption are also essential to ensure that regulations are enforced effectively and labor rights are protected.
To enhance competitiveness and promote sustainable value creation, African economies must prioritize labor-intensive industries that take advantage of their competitive advantages. In East and West Africa, for instance, this could be through manufacturing in the textile or food-processing sectors, whereas Central African economies could focus on the value-added processing of their primary commodities, also known as resource beneficiation. Governments could also invest in targeted infrastructure, particularly focusing on reliable electricity grids and rural feeder roads, which continue to represent major barriers to industrial growth on the continent. Simplifying business registration processes and incentivizing greater levels of formalization can also contribute significantly to a more enabling business environment. Such transformation is important for ensuring that economic gains translate into long-term societal benefits for African economies and improved quality of life for all segments of their respective societies.
The continent faces a plethora of institutional and governance barriers to competitiveness. Every country’s institutional framework, which encompasses its legal, political, and regulatory systems, is an essential component of its competitiveness. For African economies, this framework is particularly significant due to the continent’s historical context and ongoing challenges. Strong institutions play a fundamental role in ensuring fairness, boosting investor confidence, and creating trust between governments and their citizens.
Undeniably, the historical legacy of colonialism continues to have a lasting impact on Africa’s institutional development. In many instances, the imposed colonial state, designed for resource extraction and geopolitical gain rather than fair governance, left weakened state institutions, a lack of societal cohesion, and conditions that favor the existence of corruption mechanisms.14 In this context, the Western conception of the rule of law is difficult to transplant to African states. The transition from colonialism to independent and viable postcolonial states proved more challenging than expected as the development and maintenance of state institutions, such as the justice system, were weakened by internal divisions, ethnic conflicts, cultural differences, and outside interference.15 Further criticism is directed at post-colonial African leaders for their failure to support liberal constitutions, suppressing dissent, going against judicial independence, and unlawfully holding on to power.
As a result, the “Africanization” or indigenization of the judiciary has often failed to move away from its history of oppressive intervention, with judges frequently becoming mere extensions of the executive. Such conditions have led to a fragmented legal system in many post-colonial African countries, where the line between the formal and informal justice systems has become increasingly blurred. This weakened ability to fairly administer the rule of law to all individuals negatively affects the ability of economies to be competitive in two crucial aspects. The first aspect is the lack of trust from citizens. The second is the lack of reliability for businesses to conduct their activities within a fair and impartial legal process, for instance, to enforce contracts and resolve disputes. Beyond conflict resolution and contract enforcement, the rule of law directly impacts competitiveness by encouraging a predictable business environment, encouraging both domestic and foreign investment, and ensuring regulatory transparency.
14 Mutua, M. (2016). Africa and the rule of law. Sur - International Journal on Human Rights, 13(23), 159–173.
15 Ibid.
Additionally, a strong rule of law enables governments to effectively implement policies that promote innovation, protect intellectual property rights, and maintain stability, which are all critical components for attracting investors and driving economic growth. It also helps to reduce corruption by strengthening accountability mechanisms and ensuring that public officials act in the interest of the population rather than for private gain. In its absence, trust in government institutions diminishes. The latter deters entrepreneurship and hampers economic dynamism, which in turn undermines a country’s overall competitiveness.
A strong rule of law enables governments to implement policies that promote innovation, protect intellectual property rights, and maintain stability, which are all critical components for attracting investors and driving economic growth
While progress has been observed in African electoral democracy since the end of the Cold War, it has not necessarily translated into meaningful integration of democratic values or improved governance. This is because elections do not guarantee the upholding of democratic principles. As observers point out, holding regular, free, and fair elections alone does not guarantee personal freedoms, political equality, women’s empowerment, an independent civil society, a free media, or sufficient space for public debate, all of which are essential elements of a liberal democracy.16 In fact, some African regimes have arguably demonstrated their ability to manipulate elections, restrict democratic space, and misuse state resources.
Leaders of such regimes invest significant resources in ensuring a favorable electoral outcome through the manipulation of voter registration processes, running interference on opposition candidates, barring public gatherings, controlling the availability of public media information, and, in some cases, using the judicial system to burden opposition with legal hurdles.17 Such interference weakens citizen participation, which is essential for building strong and accountable institutions.
There are further concerns about the effectiveness of democratic governance in Africa, issues that go beyond simply setting up or having democratic institutions in place. A strong democratic regime is not achieved merely by drafting strong constitutions or passing good laws, as many populations remain excluded from meaningful political participation and economic opportunities.18 In other words, the presence of democratic structures does not automatically translate into
16 Cilliers, J. (2016). The future of democracy in Africa. Institute for Security Studies. (African Futures Paper No. 19).
17 Ibid.
18 See Mutua, 2016.
justice or human rights protections. In addition, some observers argue that there is a paradox within democratic processes: too much inclusion can be just as harmful as too much competition.19
For instance, there are cases where governments attempt to incorporate all political actors (e.g., opposition parties or rival factions) into governance through mechanisms like governments of national unity (GNUs). While this approach may ease political tensions in the short term, it can blur the lines of accountability, making it difficult to distinguish between the governing authorities and the opposition. Such a lack of clarity weakens the system of checks and balances, which is essential for a functioning democracy. When opposition parties become part of ruling alliances or coalitions, they lose their ability to hold those in power accountable, which in turn undermines one of democracy’s core principles.
Additionally, ordinary citizens are sometimes crowded out of political participation through power-sharing agreements that are dominated by economic or political elites. Such arrangements often reinforce the elites’ control over national resources and lead to closely knit, consensus-driven governance styles that tend to prioritize stability or the status quo over necessary reforms. The results are policy stagnation and the failure to address some of the more important or pressing issues faced by those economies, such as corruption or socioeconomic inequality. A weakened political diversity further lowers voter engagement and erodes public trust in democratic processes, which affects the government’s ability to effectively govern and drive progress.
In post-colonial Africa, certain economies have historically struggled to take advantage of democratic transitions due to some of the challenges mentioned above. For instance, Zimbabwe has faced repeated electoral irregularities and authoritarian practices under leaders such as Robert Mugabe, where elections were manipulated to maintain power and restrict the possibility of citizens voicing their concerns and choosing genuine representation. In South Sudan, ongoing political instability and a lack of reliable electoral processes have led to weakened efforts to improve governance and development, leaving the country burdened by poverty and heightened conflict. Nigeria, despite being one of Africa’s largest economies and a democracy, has continuously struggled with electoral violence and tampering, as well as limited political accountability. Such conditions have hindered the country’s ability to effectively address issues, such as corruption and growing socioeconomic disparities.
Accountability and transparency are crucial for fostering trust in institutions and ensuring meaningful democratic progress. However, gaps in these areas
have allowed corruption, cronyism, and inequality to persist across many African states. 20 The failure to address deeply rooted societal issues, such as unequal land ownership, which has fueled longstanding conflicts in Zimbabwe and South Africa, further undermines efforts to build equitable governance structures. Such concerns are compounded by judicial systems, often influenced by executive power, that struggle to deliver fair justice and further alienate citizens and erode trust in state institutions.
Without mechanisms to enforce accountability (such as the devolution of power, fair resource allocation, and accessible legal recourse), elections alone cannot transform societies. In addition, in the absence or limited presence of the rule of law, an independent judiciary, and strong checks on executive power, democratic institutions remain vulnerable to manipulation. Vulnerability thwarts those institutions’ ability to drive sustainable development and social progress.
c. Corruption as a persistent challenge to competitiveness
Corruption is understood as the unlawful or unauthorized exchange of money or any other form of valuables that can substitute money. 21 It is characterized by the abuse of public power and authority for personal or political advantage, and it encompasses a variety of activities such as bribery, fraud, embezzlement, and self-dealing. 22 Other corrupt practices include clientelism and political patronage, as well as a lack of transparency and accountability in public institutions’ activities. In the African context, corruption remains one of the most persistent and detrimental challenges to the region’s development and global competitiveness. For instance, observers indicate that both domestic and foreign bribery have become embedded in African economic and political systems, and it is often perceived as just another cost of doing business rather than a legal or ethical violation. 23 In short, corruption and crony capitalism have become a normalized practice. 24 Such normalization of corruption directly contravenes international standards, discourages both local and foreign investors, and undermines long-term economic growth.
Normalization of corruption discourages investors, and undermines long-term economic growth
19 See Cilliers, 2016.
20 See Mutua, 2016.
21 Rose-Ackerman, S. (1975). The economics of corruption. Journal of Public Economics, 4(2), 187203.
22 Rose-Ackerman, S. (2005). The challenge of poor governance and corruption. Especial 1 DIREITO GV L. Rev., 207-266.
23 Adeyeye, A. (2017). Bribery: cost of doing business in Africa. Journal of Financial Crime, 24(1), 56-64.
24 See Mutua, 2016.
The British American Tobacco scandal serves as a striking example of how weak enforcement mechanisms allow bribery to persist with minimal consequences on the continent. 25 A 2015 Transparency International report on the OECD AntiBribery Convention found that active enforcement of anti-bribery measures occurs in just four African countries. The report thus highlighted the widespread lack of accountability. Such failure to address corruption effectively fosters a cycle of impunity, making African markets less attractive to international businesses and reducing economic opportunities for legitimate enterprises as fair competition is strongly undermined. Fairness in business practices and the implementation of legislation constitute important factors of competitiveness because they underline citizens’ and the private sector’s trust in institutions. The economic and social costs of corruption in Africa are thus substantial, with estimated annual losses of up to $148bn, including $30bn in aid. 26
Corruption acts as a multifaceted barrier to achieving competitiveness and thus thriving societies. It undermines equitable access to opportunities and distorts important principles of fairness, meritocracy, and efficiency. It often unfolds through the embezzlement or misallocation of public funds towards private actors or individuals, which disproportionately affects vulnerable populations and deepens socioeconomic inequalities. Such mismanagement of public wealth also has an indirect impact on human capital development through the privatization of important funds initially intended for infrastructure, healthcare, and education. In other words, misappropriation leaves essential sectors of the economy underfunded and dysfunctional. In addition, corruption erodes trust in government institutions, fostering widespread disillusionment and hampering civic engagement among citizens. In the longer term, lower participation in governance processes ultimately leads to a feeble democracy. In the private sector, corruption distorts markets by favoring a select few and thus enables businesses with political connections to thrive at the expense of more innovative or efficient competitors. The latter discourages foreign investment as companies fear unfair competition, legal uncertainty, and public backlash if their business activities are associated with opaque practices.
Countries in which corruption levels are high also tend to experience greater levels of capital flight, as both domestic and international investors seek more stable environments for their assets. This harms economic growth and constricts job creation, often perpetuating cycles of economic stagnation. Despite the presence of anti-corruption laws, the mere belief that corruption is widespread and increasing within a country already represents an obstacle to progress, as
individuals and firms make decisions based on their perception of the market. 27 Such perceptions are just as damaging to economies as actual acts of corruption themselves, since they discourage civic engagement, weaken the impact of policy reforms, and reinforce a culture of resignation in which corruption is seen as an unavoidable finality rather than a solvable societal problem. In this context, addressing corruption not only becomes a moral imperative but, more importantly, a critical step towards regaining institutional trust to ensure more competitive, equitable, and prosperous societies.
A study, controlling for the effect of institutional quality on the finance-growth nexus, examines the critical role that institutions play in shaping financial development and economic growth in West African economies. 28 It highlights that financial development alone is not a sufficient condition to drive sustainable growth in the region, but rather, it must be embedded within a strong institutional framework to yield meaningful and tangible economic benefits. According to that study, growth depends not only on financial development, but also on ensuring that such development is supported by a strong and reliable institutional foundation. The study assesses institutional quality based on key indicators that reflect some of the defining components of competitiveness, namely corruption control, bureaucratic effectiveness, and the rule of law.
Corruption control, which reflects the extent to which public officials and private entities are held accountable for ethical misconduct, has remained consistently weak in the region. Despite temporary improvements in the 1990s, scores for corruption control declined again in the early 2000s and have not achieved significant improvements since, leading to the slow erosion of investor confidence in West Africa’s ability to achieve economic diversification. Weak anticorruption measures, as those analyzed in the aforementioned study, create an environment in which financial resources are misallocated, thus diminishing their potential to support productive investments and firms. In addition, bureaucratic quality, a crucial component of competitiveness, evaluates the effectiveness of public administration in delivering services and implementing policies. The study finds that numerous countries in the region, particularly Togo, Liberia, Sierra Leone, and Mali, exhibit alarmingly low bureaucratic quality scores. Such findings reflect fundamental weaknesses in their administrative structures and limit their governments’ ability to design and enforce financial regulations, implement economic reforms, and efficiently allocate public resources.
29
25 For more details about this scandal, see Adeyeye, 2017.
26 Hope, K. R. (2021). Reducing corruption and bribery in Africa as a target of the sustainable development goals: applying indicators for assessing performance. Journal of Management and Leadership in Contemporary Africa, 2(1)
27 See Adeyeye, 2017; and Hope, 2021.
28 Olaniyi, C. O., & Oladeji, S. I. (2021). Moderating the effect of institutional quality on the finance–growth nexus: Insights from West African countries. Economic Change and Restructuring, 54(1), 43–74.
29 Ibid.
Furthermore, the absence of well-functioning institutions significantly constrains private-sector growth, reduces trust in governance, and deters foreign direct investment (FDI). Specifically, while financial development has a strong positive impact on economic growth, weak institutional frameworks substantially erode these benefits.
30
The absence of wellfunctioning institutions significantly constrains privatesector growth, reduces trust in governance, and deters foreign direct investment “
The average institutional quality score across West African countries between 1986 and 2015 is far below the threshold required for financial systems to function effectively. In countries such as Liberia and Mali, for instance, which have endured persistent low institutional quality scores largely due to civil unrest and conflict, governments are facing great difficulty in achieving financial development and turning its benefits into sustainable economic growth. Such findings underscore the urgency of institutional reforms as a prerequisite for financial development to drive long-term economic transformation.31 Strengthening governance structures, enhancing regulatory oversight, and fostering greater transparency in public administration are critical steps toward ensuring that financial systems effectively contribute to economic growth and overall competitiveness. Without such structural improvements, the potential benefits of financial development will remain largely unrealized, leaving African economies at a continued disadvantage in an increasingly competitive global landscape.
In the post-colonial period, military coups d’état have proliferated throughout the African continent. In the sub-Saharan region, for instance, during the period between 1950 and 2022, there have been 188 attempts at coups in 39 countries, with 88 of those attempts completed.32 Observers point out that such continuity of coups brings into question the institutionalization of democracy in the region.33 Arguably, the political development of the continent has become a “ritualistic” electoral cycle steering towards changes in leadership. In some instances, coups have led to long-lasting regimes under one leader or established “dynasties.” For example, in Gabon, the Bongo dynasty governed for 54 years, whereas Paul
30 Ibid.
31 For a more detailed discussion of results pertaining to the institutional quality score, see Olaniyi & Oladeji, 2021.
32 Coups are defined as “illegal and overt attempts by the military or other elites within the state apparatus to unseat the sitting executive” (Powell & Thyne 2011, 252). A successful coup is one which displaces the chief executive for at least ten days. Powell, J. M., & Thyne, C. L. (2011). Global instances of coups from 1950 to 2010: A new dataset. Journal of peace research, 48(2), 249-259. Data about the referred coup attempts are available from Coup Agency and Mechanisms Data (CAM), https://militarycoups.org/#cam
33 Akinola, A. O., & Makombe, R. (2024). Rethinking the resurgence of military coups in Africa. Journal of Asian and African Studies, 00219096231224680.
Biya did so for 39 years in Cameroon, and Paul Kagame for 22 years in Rwanda.34 There are cases in which militarism in the continent has become acceptable because it is framed in the language and context of development. For this reason, it is encouraged by the military establishment as well as development actors. Militarism is thus imbued with political traction.35
It is evident that long-lasting regimes provide countries with a degree of institutional continuity. Yet, the externalities originating from militarism diminish any gains from such a continuity. For instance, the prevalence of military interventions and armed conflicts across the continent has led to significant political instability. The latter, in turn, disrupts economic activities and deters both domestic and foreign investment. Some regions, such as Central Africa, have experienced significant negative effects on economic growth due to persistent conflict.36 In such cases, militarism has created an environment of uncertainty that is detrimental to competitiveness. In addition, a critical consequence of militarized governance is corruption. Military regimes are frequently characterized by high levels of corruption, which undermines effective governance and curbs economic progress. Moreover, the lack of transparency and accountability in such regimes exacerbates economic instability by eroding public trust and reducing the efficiency of public institutions. Such pervasive corruption hampers the delivery of essential services and discourages private sector growth.37
Human rights violations are often rampant in militarized states. This is so because military regimes tend to erode the independence of the judiciary, which affects the capacity of the latter to hold offenders accountable, thus building a culture of impunity.38 Importantly, violations can contribute to social unrest and overall economic decline. At the same time, the suppression of civil liberties and political freedoms constrains innovation and economic dynamism. Violations also lead to social tensions, which can escalate into broader sociopolitical instability.39 Another significant impact of militarism is the misallocation of resources. High levels of military expenditure divert crucial funds away from sectors essential for long-term competitiveness, such as education, healthcare, and infrastructure
34 See Akinola & Makombe, 2024.
35 Abrahamsen, R. (2018). Return of the generals? Global militarism in Africa from the Cold War to the present. Security Dialogue, 49(1-2), 19-31.
36 Ogbe, M. A., Abdullahi, M. S., & Ding, Y. (2024). Measuring how armed conflict impacts economic growth in sub-Saharan Africa through spatial analysis. Frontiers in Political Science, 6, 1433584.
37 Ibid, and Bonga, W. G., & Mahuku, D. N. (2022). Effect of militarisation on development and democracy in Africa. Journal of development economics and management research studies, 9(11), 43-54.
38 See Ngima, I. (2023). A Surge of Military Coups in Africa Threatens Human Rights and the Rule of Law. Freedom House. Available from https://freedomhouse.org/article/surge-military-coupsafrica-threatens-human-rights-and-rule-law
39 Bonga & Mahuku, 2022.
development.40 Such reallocation of resources reduces the overall welfare of the population and limits the development of human capital. In short, the opportunity costs of maintaining large military budgets are particularly acute in countries with limited financial resources.41
The negative effects of militarization are not only confined within national borders but often spill over into neighboring countries.42 These repercussions do not necessarily translate into direct armed conflicts but can take the form of large-scale displacement of populations. Such spillovers negatively affect the stability of the region and increase economic disruptions.43 In short, militarism creates and sustains a cycle of conflict, corruption, and poor governance, which severely undermines the long-term competitiveness of Africa.
40 Cervenka, Z. (1987). The effects of militarization of Africa on human rights. Africa Today, 34(1/2), 69-84.
41 Ogbe, Abdullahi & Ding, 2024.
42 See Boly, A., & Kéré, É. N. (2022). Terrorism and Military Expenditure in Africa: An Analysis of Spillover Effects. African Development Bank Working Paper Series, No. 368.
43 See Carmignani, F., & Kler, P. (2016). The geographical spillover of armed conflict in SubSaharan Africa. Economic Systems, 40(1), 109-119.
Managerial dynamics affect the competitiveness of African countries to a significant degree.
A fundamental aspect of the competitiveness of an economy is its ability to renew and adapt its economic structure and composition through innovation, technology, and entrepreneurship. As such, small and medium-sized enterprises (SMEs) represent one of the key engines of growth and innovation for economies across the world. In fact, SMEs account for almost 90% of businesses worldwide, and in the context of developing countries, they account for nearly 99%.44 In addition, SMEs boost economic growth through job creation, diverse employment opportunities, tax provision, and a direct contribution to GDP and economic diversification.
In the African context, however, despite their critical and positive role, many SMEs face structural challenges that hinder their ability to be more efficient and productive. As explored in earlier sections, such challenges include the lack of capital, inadequate access to information, and, in some cases, corruption. Nevertheless, and perhaps one of the most important barriers to SME development in Africa, is the lack of support they receive from governments that do not have the necessary budget and competencies needed to accompany such enterprises in the early stages of their development. Such conditions lead to the neglect of a vital driver of competitiveness for the continent.
This also results in situations where the contributions of SMEs are not formally recognized, as many of them operate informally. What follows are market inefficiencies such as reduced fiscal revenues, lower levels of social protection and security nets, as well as a growing informal sector that results in more opacity in the market. As discussed earlier, the informal sector has become a significant portion of many African economies, comprising mostly SMEs and family-run enterprises. Incorporating informal businesses into the formal economy is crucial for enhancing competitiveness, though this process presents several challenges. Formalization efforts require significant investments in regulatory reforms, financial inclusion, infrastructure, and training programs aimed at capacity building among entrepreneurs. Policymakers must therefore find the delicate balance between pushing for greater levels of formalization to stimulate economic growth and increase fiscal revenues and avoiding overly
strict regulatory measures that could deter entrepreneurial activity and distort market flexibility and responsiveness.
Due to the sheer size and diversity of the continent, making broad generalizations about Africa’s business and economic environment risks overlooking the distinct factors that shape market dynamics and entrepreneurial success across its different regions. Nevertheless, there exists an entrepreneurship framework that classifies African economies into three categories: (1) underdeveloped or post-conflict economies, (2) emerging markets with evolving institutional frameworks, and (3) economies approaching a “take-off” phase of high growth. It follows that some countries tend to rely on subsistence entrepreneurship and external aid, while others exhibit more sophisticated business environments supported by advanced market strategies.45 These differences underscore the critical role of political stability and governance in shaping economic trajectories.
Making broad generalizations about Africa’s business and economic environment risks overlooking the distinct factors that shape market dynamics and entrepreneurial success across its different regions
44 Muriithi, S. M. (2017). African small and medium enterprises (SMEs): Contributions, challenges, and solutions. European Journal of Research and Reflection in Management Sciences, 5(1), 36–48. ISSN 2056-5992.
Resulting from technical and structural limitations of African financial systems, SMEs struggle to obtain credit or loans directly from financial institutions. They thus resort to more informal means of financing, such as loans from family or friends. Such capital restrictions constrain the SMEs’ capacity to scale up or innovate. Specifically, without access to affordable and reliable credit, businesses miss out on opportunities to invest in technology, hire skilled workers, or explore new markets. In the African context, lack of credit access weakens the entrepreneurial ecosystem, as SMEs struggle to secure loans due to collateral issues or inadequate credit histories.46 Tackling such issues requires expanding financial inclusion through innovative solutions such as mobile banking or microfinance programs. Policymakers could also establish credit guarantee schemes to encourage banks to lend to SMEs by sharing risk.
Africa’s entrepreneurial landscape holds tremendous potential, fueled by a young population avid for digitalization and technological advancements. With 60% of the continent under the age of 25, Africa holds a vast reservoir of future entrepreneurs, innovators, and consumers who drive demand for digital
45 This framework was developed by Tvedten, K., Hansen, M. W., & Jeppesen, S. (2014).
Understanding the rise of African business: In search of business perspectives on African enterprise development. African Journal of Economic and Management Studies, 5(3), 249–268.
46 Atiase, V. Y., Mahmood, S., Wang, Y., & Botchie, D. (2018). Developing entrepreneurship in Africa: Investigating critical resource challenges. Journal of Small Business and Enterprise Development, 25(4), 644–666.
solutions and new business models. Adding to this momentum, the African Continental Free Trade Area (AfCFTA), which includes 44 of the 55 African Union member states, creates new avenues for cross-border trade and deeper collaboration between entrepreneurs of different economies. Through tariff reductions and the promotion of a more integrated market, the AfCFTA lays the groundwork for regional value chains, which enable SMEs to expand beyond their markets and strengthen a continent-wide entrepreneurial ecosystem.47 Such a surge in innovation is particularly evident when looking at Africa’s emerging “Tech Champions” (i.e., Kenya, Ivory Coast, Nigeria, Ghana, and South Africa), which are increasingly being compared to Asia’s Tigers for their ability to drive high-tech growth. Tech Champions have seen a rapid rise in tech hubs, incubators, and venture capital investments, positioning them as key centers for digital entrepreneurship and setting the stage for Africa’s next wave of economic transformation.
The absence of wellfunctioning institutions significantly constrains privatesector growth, reduces trust in governance, and deters foreign direct investment
and must be supported by adequate infrastructure, knowledge, and market conditions. For example, an agricultural cooperative using digital platforms to increase or gain market access may still struggle selling produce if the road quality makes transportation costly or unreliable. Similarly, a business investing in online marketing to bolster its reach may see limited returns if internet penetration in its target market or geographical area is low. Entrepreneurship on the continent is therefore still heavily impacted by structural barriers that inhibit the competencies and ingenuity of the African labor force, working within a limited scope and market, depending on industry and location.
For instance, Nigeria’s booming tech sector offers a striking example of such momentum, with fintech startups like Flutterwave and Paystack leading the way. Through the development of their innovative payment solutions that simplify transactions across Africa, these companies have attracted considerable global investment while empowering thousands of local businesses and accelerating the continent’s e-commerce growth. Similarly, in Kenya, M-Pesa has transformed mobile money and made financial services more accessible to all, showcasing Africa’s ability to develop homegrown solutions tailored to its unique challenges. These fintech pioneers are not only expanding financial inclusion but also fueling entrepreneurship and strengthening the continent’s role in the global digital economy. Such a wave of innovation extends beyond fintech, shaping key sectors such as agriculture, healthcare, and financial services. In agritech, for instance, startups in Kenya and Ghana are equipping farmers with realtime weather data, market price insights, and mobile payment systems, which help them boost productivity and build more resilient businesses. As digital transformation sweeps across industries, Africa’s entrepreneurial ecosystem continues to evolve, opening new opportunities for growth and technological advancement.
While technological innovation is transforming Africa’s business landscape, its impact on profitability is not always straightforward. In other words, the simple adoption of technologies or digital tools is not enough to promote firm efficiency or growth. Such tools must be effectively integrated into business operations
47 Ratten, V. (2020). Entrepreneurial ecosystems: Future research trends. Thunderbird International Business Review, 62(5), 623–628.
A recurring challenge in Africa’s labor market is the slow pace of structural transformation, which is an important factor leading to limited progress in shifting labor from less productive sectors, such as agriculture, to higherproductivity industries like manufacturing.48 This stands in stark contrast to other high-growth regions such as Southeast Asia and Latin America, where industrialization played a crucial role in driving labor transition towards more productive industries. Such transitions take time and are often facilitated by targeted government policies and investments in infrastructure and education. In Africa, however, workers leaving the agricultural sector often move into the services sector, which tends to have lower productivity. Such a shift weakens overall competitiveness and limits economic gains. Additionally, the informal nature of many service jobs results in financial instability, a lack of social protection, and few opportunities for skills development, which further perpetuates a cycle of low productivity and limited prosperity.49
Arguably, agriculture and farming will remain the largest providers of employment in Africa for the foreseeable future, driven by the slow pace of growth and job creation in other sectors and the simultaneous productivity gains in agriculture that have been comparatively more attractive to labor force entrants. This is particularly relevant in sub-Saharan economies, where agricultural jobs continue to compose between 42% and 67% of employment opportunities.50 To advance competitiveness across the continent, it is critical to assess whether African economies can leverage agricultural productivity as a stepping stone for broader economic transformation. While industrial employment has driven such transformation in many regions globally, African markets face unique challenges, including high levels of informality in both the industrial and service sectors, which limit potential productivity gains. In addition, the lack of robust industrial
48 McCullough, E. B. (2015). Labor productivity and employment gaps in Sub-Saharan Africa (World Bank Policy Research Working Paper No. 7234). World Bank.
49 Ibid.
50 Yeboah, F. K., & Jayne, T. S. (2017). Africa’s evolving employment trends. Journal of Agrarian Change, 18(1), 2–24.
policies and limited access to capital make it difficult for African economies to create the conditions necessary for industrial growth. The further absence of adequate infrastructure in energy and transport networks exacerbates these challenges, as does the relatively low level of technological adoption in both agriculture and non-agricultural sectors.51
Additionally, the limited integration of value chains within the African economy hampers the development of higher productivity activities. The services sector, which has been absorbing labor exiting from agriculture, often consists of lowvalue activities such as low-scale trade and informal services, rather than high-value-added activities that could drive productivity gains. To achieve meaningful structural transformation, there is a need for targeted policies that promote formal employment in higher-value sectors, investments in education and skills training, and improvements in infrastructure that can support industrial development. The experiences of Asian economies demonstrate that structural transformation is most successful when complemented by proactive government intervention, which helps create a favorable environment for labor-intensive manufacturing and other productive sectors. A similar approach could be beneficial to African economies. Such an approach, however, will require significant political will and the transformation of strategic policy formulation to overcome existing barriers.
“
The limited integration of value chains within the African economy hampers the development of higher productivity activities
Beyond operational challenges, broader macroeconomic factors such as currency instability, inflation, political uncertainty, and armed conflict can all play a decisive role in determining the success or failure of African entrepreneurs. Ensuring that technology translates into sustainable and viable economic growth, therefore, requires tailored policy interventions. The latter addresses some of the barriers to technological adoption, whether on a structural level, such as improving infrastructure quality and digital literacy, or on a political level by promoting a stable business environment conducive to innovation.
Finance and access to financial markets and services play a central role in economic development, directly influencing a country’s competitiveness through impact on productivity, investment, business efficiency, and poverty alleviation. Despite notable advancements in recent years, unresolved issues remain pertaining to financial inclusivity and the effectiveness of financial market development in enhancing Africa’s competitiveness. Low levels of financial inclusion and market penetration hinder entrepreneurial activities through
51 McCullough, 2015.
structural barriers to greater access to financing. Moreover, financial exclusion restricts consumers from using modern means of payment to complete financial transactions. Despite such limitations, African stocks have performed relatively well in terms of returns and have demonstrated the ability to be resilient to shocks.
In this context, greater adoption of fintech and mobile technologies leads to a sense of optimism for the development of the continent’s financial systems. There remain, however, considerable intra-regional disparities that result from varying levels of physical infrastructure. Currently, existing systems are small and rather underdeveloped in absolute and relative terms, with high levels of fragmentation. As an indication of sheer size to contextualize this issue, in 2009, the combined total assets of all banks in Zambia were equivalent to just 0.1% of the assets of large European financial institutions such as the Deutsche Bank. Such a restricted asset pool can considerably hinder a country’s ability to exploit economies of scale, invest in technology, and broaden the extent of financial inclusion.52 Moreover, limited outreach in Africa, with less than 25% of households having access to formal banking services, underlines the necessity to invest in developing more integrated and inclusive systems for all to increase the depth and relevance of local financial markets.53
Another challenge facing African financial markets is their limited market capitalization and number of listings. Although South Africa and Egypt are exceptions, large regional players such as Kenya struggle. For instance, while the Johannesburg Stock Exchange has over 2,000 listed companies, the Nairobi Securities Exchange has fewer than 100.54 There are, therefore, significant intraregional variations in financial outreach across the continent and considerable differences in financial access and infrastructure. Specifically, Eastern Africa, as well as some parts of Central Africa, lag, with fewer financial institutions per capita and lower levels of financial inclusion than Western and Southern Africa, as well as the Maghreb.
Such a gap is partly driven by uneven economic development across regions. That is, richer and more economically developed economies tend to have higher access to financial systems due to greater demand for such services. Another contributing factor is the strength of regulatory environments. For example, many of the continent’s large banks are state-run and depend on the rigor and enforcement of national regulations. Furthermore, although there is a positive correlation between financial use and financial depth, it is imperfect due to
52 Beck, T., Fuchs, M. J., & Uy, M. (2009). Finance in Africa: Achievements and challenges (World Bank Policy Research Working Paper No. 5020). World Bank.
53 Ibid.
54 Allen, F., Otchere, I., & Senbet, L. W. (2011). African financial systems: A review. Review of Development Finance, 1(2), 79–113.
structural barriers that inhibit financial access, such as high costs, varying documentation requirements, as well as physical barriers such as low branch density. This is particularly the case in more isolated rural areas with lower reliability and quality of infrastructure.55
The entry of foreign banks has been a significant feature of African finance in the 21st century and has led to both positive and negative repercussions. In some countries, such as Uganda, foreign bank participation has facilitated financial stability and technology transfer, which has in turn improved the outreach of financial services. The accompanying risk, however, is to consider foreign bank participation as the universal solution to liberalize African financial markets.56
For some economies, the dominance of foreign banks has reinforced monopolistic tendencies in the domestic financial market. In turn, such a trend has reduced competitive pressures, artificially keeping costs high for customers, and lessening incentives for innovation. In addition, foreign banks have the inclination to rely heavily on quantitative information such as credit history and financial statements. Such practices make it more difficult to secure loans for SMEs and family-run businesses with limited accounting capabilities that may lack formal financial documentation or consistent financial histories. In other words, foreign banks bring much-needed capabilities and services, but their integration into local financial markets may not always benefit the broader competitiveness landscape of the host economy, particularly for smaller and more informal business activities.57
Foreign participation in financial market integration poses an interesting conundrum for African economies: on the one hand, it represents a means to achieve greater competitiveness via channels such as robust governance, improved technology, the introduction of economies of scale, as well as the increased sector-specific knowledge and best practices, yet on the other, foreign banks’ preference for safer investments and high risk-aversion can dampen overall financial inclusivity and undermine the benefits of dynamic and liberalized financial markets. This points to a need for better regulatory frameworks that ensure the advantages of foreign participation in domestic markets are maximized without excluding significant segments of the population.
55 Demirgüç-Kunt, A., & Klapper, L. F. (2012). Financial inclusion in Africa: An overview (World Bank Policy Research Working Paper No. 6088). World Bank.
56 Beck, T., Senbet, L. & Simbanegavi, W. (2014). Financial Inclusion and Innovation in Africa: An Overview. Journal of African Economies, 24(suppl), i3-i11.
57 Ibid.
Financial inclusion and informal finance
Financial exclusion remains one of the major barriers to competitiveness in Africa. The high fixed fees and minimum balance requirements limit access to formal financial services for a large segment of the population. In fact, 80% of adults without a formal bank account in sub-Saharan Africa cite a lack of funds as the primary reason for limited access to financial services. Moreover, in Eastern and Southern Africa, high fixed fees, and costs of opening an account restrain such access. In Uganda, for example, maintaining a checking account costs the equivalent of 25% of GDP per capita annually, and 54% of non-account holders in the population indicate is the main reason for not opening one.58 Because of these high costs, informal financial arrangements remain particularly popular, with savings clubs and borrowing from family members and friends still dominating the financial landscape.
Additionally, bringing financial services to rural communities is a major challenge on the financial inclusion agenda of Africa. One of the fundamental limitations to greater levels of such an inclusion remains the large distances that rural residents must travel to reach a local bank branch. In some cases, poor infrastructure, and telecommunications, as well as heavy regulation, restrict the geographical expansion of bank branches away from urban centers, where infrastructure and connectivity are more reliable. Financial inclusion is positively and significantly correlated with access points, measured through commercial bank branches per 100,000 people. In sub-Saharan Africa, economies lie at the lower end of this spectrum with a low number of commercial bank branches and low financial account penetration.59
Despite limited formal financial inclusion, African economies have shown great ingenuity and resilience in finding alternative financing for their populations. A great example of this is the boom in the use of mobile financial services across the continent. In 2024, 63 million customers used M-Pesa, a mobile payment service, across six countries, including Egypt, Ghana, and Kenya.60 Such innovation helps to partly bridge current gaps in access to financial services, particularly in regions where traditional banking infrastructure is insufficient. However, continued reliance on informal financing mechanisms raises questions about the sustainability of such arrangements and their impact on the continent’s competitiveness.
Private equity has rapidly developed as an alternative funding mechanism in African financial markets, especially compared to public equity markets, which have faced challenges. Specifically, a significant rise in private equity investments occurred in Africa since the start of the 21st century, raising funds through private markets, which have provided opportunities that were otherwise unavailable in illiquid public markets.61 Such a trend reflects both a strength and a limitation for African financial markets. While private equity offers a route for capital accumulation and greater investment, the underdevelopment of public markets means that such funding opportunities are restricted to a select few.
According to a 2024 report by the European Investment Bank (EIB), African firms face significant barriers to accessing credit, with high interest rates as the most frequently cited deterrent (31%), followed by complex application procedures (21%) and stringent collateral requirements (20%).62 These figures strongly mirror some of the barriers to capital experienced by individuals discussed earlier in this section. At the firm level, many enterprises report that the cost of borrowing exceeds the potential returns on their investments, discouraging them from seeking loans. Stringent collateral requirements, particularly the lack of high-quality assets like real estate, further limit access to financing.
Additionally, the significant percentage of African firms citing complex application processes and procedures as a challenge to obtaining loans likely reflects a dual problem on the demand and supply sides of the African financial market. First, there may be potential clients who lack the confidence to approach banks due to limited financial capabilities and knowledge, and second, commercial banks may lack tailored lending programs for smaller and medium-sized enterprises.63 Greater alignment between the financial needs of potential African borrowers and the supply of tailored and adapted services from commercial banks would greatly improve the competitiveness of African enterprises.
58 Demirgüç-Kunt & Klapper, 2012.
59 For more details about such correlation see Demirgüç-Kunt & Klapper, 2012.
60 Vodafone Group Plc (2024). Annual Report 2024. Berkshire, England
61 Andrianaivo, M., & Yartey, C. A. (2009). Understanding the Growth of African Financial Markets. IMF Working Papers
62 European Investment Bank (2024). “Finance in Africa: Unlocking investment in an era of digital transformation and climate transition”, Chapter 2.
63 Ibid.
There are many different aspects of social empowerment across Africa that interact with socioeconomic and political elements in complex ways.
Societal empowerment is a critical component of competitiveness. It contributes, for instance, to a country’s capacity to build a skilled workforce, foster innovation, and ensure inclusive growth. In the African context, structural barriers such as limited access to quality education, gender disparities in economic participation, and insufficient social mobility continue to hinder the full realization of the continent’s human capital potential. Additionally, inadequate healthcare infrastructures and public health systems, along with limited access to efficient infrastructure, further constrain economic opportunities. In short, strengthening societal empowerment requires targeted efforts to improve educational outcomes, expand access to quality healthcare, enhance labor market inclusivity, and provide equal opportunities for all segments of the population.
Disparities in educational access and quality
Education is a key driver of socioeconomic development and progress. In Africa, significant regional disparities in educational opportunities persist, resulting in uneven educational outcomes across different regions. Moreover, the urbanrural divide, as well as the presence of armed conflicts, has had a substantial impact on creating differences in access to education. Such a divide thus widens the educational disparities among African countries.
The primary channel through which the urban-rural divide manifests itself in education is the distribution of adequate resources. Urban areas tend to have better access to educational facilities such as well-equipped schools, libraries, and computer technologies. Conversely, rural schools often struggle with more basic infrastructural problems, such as access to a reliable power supply or potable water. Urban centers also tend to have more qualified teachers, as remuneration is higher and professional opportunities are more readily available in those areas. In addition, the availability of a broader range of extracurricular activities in cities contributes to a more enriched learning experience for students and pupils. Conflict, on the other hand, disrupts schooling through extensive infrastructural damage to schools, classrooms, and road networks for accessibility. It also forces school closures and creates an atmosphere of fear and insecurity within school communities. In conflict-affected areas, disruption of children’s educational routine leads to long-lasting effects on their educational
achievement and emotional development through exposure to traumatizing levels of violence and hardship.64
Poverty is another significant barrier to education. Many families living in poverty struggle to afford school fees, uniforms, meals, and educational materials. As a result, children from impoverished backgrounds often face obstacles in attending school regularly and struggle to stay in school.
The resulting lack of educational achievement limits their opportunities for social mobility and economic advancement, which in turn reinforces the cycle of poverty. To put it differently, limited education sustains poverty by restricting individuals’ economic opportunities. Without access to quality education, individuals are often confined to low-paying jobs or informal work, which further hinders their ability to engage in entrepreneurial activities that could potentially lift them out of poverty. Consequently, the struggle of African youth to improve their economic condition leads to a vicious cycle of hardship that maintains poverty mechanisms.65
Children from impoverished backgrounds often face obstacles in attending school which in turn reinforces the cycle of poverty “
Such dynamics have led sub-Saharan Africa to face some of the highest rates of education exclusion in the world, with a significant portion of children and adolescents missing out on schooling. According to UNESCO data, over 20% of children aged six to eleven are out of school, a figure that rises to one-third for those aged twelve to fourteen, and nearly 60% for youth between fifteen and seventeen.66 The challenge is further compounded by a rapidly growing schoolage population, which increases the demand for education and exerts growing pressure on already thin educational resources. Despite efforts to improve access to education, many schools in the region continue to lack basic infrastructure (such as electricity and drinking water), while overcrowded classrooms and a severe shortage of trained teachers hinder learning outcomes. With seven out of 10 African countries experiencing a critical deficit of teaching staff, addressing the issue of pupil-to-teacher ratios is essential in ensuring that quality education reaches all children.
Particularly in sub-Saharan Africa, some of these barriers to education are even greater for girls. Female students face significant socioeconomic hurdles that profoundly limit their access to education, widening the gender gap at every stage of schooling. Deep-rooted cultural norms, early marriage, religious beliefs, and economic hardships disproportionately affect female students, making them
64 Khethiwe, D. (2023). “Education and Social Inequality in Africa: Gender, Poverty, and Regional Disparities”. Paradigm Academic Press. doi:10.56397/RAE.2023.08.05
65 Ibid.
66 UNESCO Institute for Statistics (UIS). Available from https://uis.unesco.org/en/topic/educationafrica
more likely to drop out or never attend school at all. As a result, nine million girls between the ages of six and eleven are not expected to attend school, compared to six million boys of the same age category. The disparity persists with age, and by adolescence, 36% of girls are out of school compared to 32% of boys.67 Families facing financial constraints often prioritize boys’ education, which reinforces a cycle wherein girls are kept at home for domestic responsibilities. It is also not uncommon for schools to be inadequately equipped to support female students, with insufficient sanitation facilities and a lack of gender-sensitive policies further discouraging attendance.
Gender disparities remain a significant challenge across the globe and particularly in Africa, undermining efforts to achieve inclusive economic growth and sustainable development. Despite recent progress in policy reforms and international commitments towards achieving such equality, structural disparities persist, and societal norms as well as discriminatory practices continue to limit opportunities for women and girls.
“
Structural disparities, societal norms, as well as discriminatory practices continue to limit opportunities for women and girls
Gender-based disparities are a persistent issue across the African labor market. The resulting inequalities contribute to inefficiencies and limit the continent’s competitiveness potential. More specifically, women are consistently disadvantaged in terms of labor force participation and employment opportunities, with their contributions often misclassified or underreported in official labor statistics. The latter is particularly pronounced in rural areas, where activities like caregiving, gathering fuelwood, and subsistence farming, predominantly undertaken by women, are often excluded from measures of productive work.68 The undervaluation of women’s economic contributions leads to an incomplete understanding of labor force dynamics, thus skewing outlooks on policy and slowing efforts to enhance productivity.
In 2019, only 56% of African women participated in the labor market, compared to 73% of men, with the gap being widest in North Africa due to restrictive laws and societal norms. 69 Even in countries where women achieve higher educational levels, legal barriers and discrimination prevent them from entering certain industries. Additionally, women bear a disproportionate burden of unpaid care
67 Ibid.
68 Mbaye, A. A., & Gueye, F. (2018). Labor markets and jobs in West Africa (Working Paper Series No. 297). African Development Bank.
69 Yeboua, K. (2024, May 6). Get gender equality right in Africa and prosperity will follow. Institute for Security Studies Africa. Available from: https://issafrica.org/iss-today/get-gender-equalityright-in-africa-and-prosperity-will-follow
work, further limiting their economic opportunities. Another critical aspect of gender disparity in Africa is political representation, with women holding just 24% of parliamentary seats on average and occupying a mere 7% of executive leadership roles.70 While some African economies have made significant strides in female representation, 71 the continent continues to lag behind others, preventing women’s voices from influencing policymaking and governance structures.
The concept of NEET (Not in Education, Employment, or Training) is also relevant to the gender discussion. NEET rates are significantly higher among women, particularly in rural areas, which suggests that cultural and structural barriers to female employment remain substantial.72 Specifically, factors such as limited access to education, societal expectations regarding domestic responsibilities, and discriminatory labor practices restrict women’s participation in the labor market. Such an exclusion of women from economic activities reduces the overall competitiveness of African economies, as it limits the available talent pool and thus hinders productivity. Addressing these barriers requires targeted interventions, including expanding access to education for girls, promoting gender-sensitive labor policies, and creating support systems such as affordable childcare, which would enable women to participate more fully in the workforce.
Health infrastructure, which not only includes healthcare facilities but also transportation, electricity, and other important factors such as sanitation, remains an important barrier to improving health outcomes in Africa. Poor transportation linkages to healthcare facilities, for example, are a major barrier to the accessibility of hospitals and primary care, which negatively impacts maternal health and child mortality.73 Similarly, poor quality electricity infrastructure can lead to unreliable energy provision and power shortages, which both have a significant adverse impact on the quality of healthcare provision and the outcomes on infants and maternal health. However, in some countries, access to electricity had a negligible impact on maternal and child healthcare services, largely due to the low use of energy-intensive technologies in primary healthcare facilities.74 Such an inconsistency, likely to occur across numerous African economies, indicates a gap between infrastructure development and
70 Ibid.
71 Rwanda, Namibia, South Africa and Senegal are in the global top 10 for female parliamentary representation
72 Mbaye & Gueye, 2018.
73 Osakede, U. A. (2022). Infrastructure and health system performance in Africa. Managing Global Transitions, 20(4), 375–400.
74 Maboshe, M., and M. Kabinga. (2018). ‘Facility Level Access to Electricity and the Efficiency of Maternal and Child Health Service Provision in Zambia.’ International Growth Center Working Paper S-41404zmb-1, London School of Economics and Political Science, London.
the effective use of the outcomes of such a development; a trend that hampers improvements in the overall health outcomes despite investments.
The African Development Bank’s (AfDB) “Strategy for Quality Health Infrastructure in Africa, 2022-2030” aims to address these infrastructure deficits, especially those brought up by the COVID-19 pandemic. The strategy focuses on increasing access to quality health services by 2030 to improve the quality of life of African citizens and support key strategic development objectives. These include developing primary health care infrastructure for underserved populations, building secondary and tertiary healthcare facilities to address the rising burden of non-communicable diseases, and expanding diagnostic infrastructure to improve disease diagnosis efficiency. The AfDB emphasizes the importance of undertaking both infrastructure investments to deliver a wide range of health services, especially in low-income and fragile regions, and simultaneously improving training and capacity-building programs for healthcare professionals. The objective is to ensure optimal use of infrastructure, strengthen maintenance systems for health facilities, and ensure that infrastructure investments are aligned with local health needs. To achieve optimum health outcomes with existing infrastructure, it is essential to have strong coordination between all involved stakeholders, including government agencies, international organizations, as well as local communities and civil society.
Further evidence suggests that a significant discrepancy exists between the disease burden experienced by African citizens and the level of healthcare infrastructure available to them. In fact, Africa accounts for roughly 25% of the world’s disease burden but contributes to less than 1% of global health expenditures.75 The continent also produces just 2% of the medicines that it consumes, demonstrating a clear structural failure. Such low levels of investment in healthcare and the corresponding gap in health infrastructure and availability of adequate health services considerably limit the continent’s capacity for disease management and prevention. It ultimately weakens the workforce’s effectiveness. Such observation is echoed by the World Health Organization (WHO) in its analysis of the continent’s health system, which found that the system’s performance in Africa operates at only 49% of its potential.76 There have been some encouraging improvements in health metrics over the last two decades, such as the significant reduction in morbidity rates for malaria and HIV/ AIDS. Other issues, such as access to quality amenities (such as clean facilities and adequate resources) and autonomy in care (for instance, patients’ ability to make decisions regarding their treatment), however, remain problematic.
75 United Nations. 2017. ‘Health Care: From Commitments to Action.’ Africa Renewal 30 (3).
76 World Health Organization. (2018). The state of health in the WHO African Region: An analysis of the status of health, health services, and health systems in the context of the Sustainable Development Goals
Robust healthcare systems and environmental sustainability are fundamental components of the competitiveness of an economy. For instance, they positively influence labor productivity through better physical and mental health outcomes, considerably improve the quality of life of citizens, and boost overall socioeconomic development by promoting well-being. Ultimately, such benefits lead to a reduction of healthcare costs and contribute to fostering a resilient workforce. Therefore, by ensuring access to quality healthcare and addressing environmental challenges such as pollution and climate change, governments can create conditions that support long-term economic growth. Further investments in preventive care and sustainable practices also play a role in mitigating risks to economic stability, ensuring that resources are allocated efficiently and equitably.
Ensuring access to quality healthcare and addressing environmental challenges can create conditions that support long-term economic growth “
Air pollution emerges as one of the most significant environmental and public health challenges on the continent, with implications for both productivity and human capital development. In 2019, air pollution alone was responsible for 1.1 million deaths in Africa and incurred substantial economic costs. For instance, Ethiopia lost as much as $3.02bn in economic output due to pollution-related morbidity and mortality (1.16% of GDP), and Ghana experienced a further $1.63bn in losses (0.95% of GDP).77 Household air pollution, usually created by the burning of solid fuels for cooking, is especially prevalent in countries like Ethiopia and Rwanda and contributes to significant morbidity and mortality.78 The consequences of such environmental health risks extend to other areas of public concern, such as the intellectual development of young children. Using an exposure-response coefficient, a study quantifies the contribution of particulate matter (PM) 2·5 pollution to the loss of intelligence quotient (IQ) in children younger than 10 years. The study found that an estimated 1.96 billion IQ points were lost across the African continent, resulting from high exposure to PM2.5 molecules.79
Such challenges illustrate how environmental degradation, and the increase of pollutants can play a role in undermining Africa’s human capital and thus its competitiveness. The negative impact of pollution on the health of individuals, both in their early years and throughout their lives, not only creates high
77 Fisher, S., Bellinger, D. C., Cropper, M. L., Kumar, P., Binagwaho, A., Koudenoukpo, J. B., Park, Y., Taghian, G., & Landrigan, P. J. (2021). “Air pollution and development in Africa: Impacts on health, the economy, and human capital”. The Lancet Planetary Health, 5(9), e580–e586.
78 Ibid.
79 Ibid.
monetary costs but also leads to indirect social costs such as the reduced productivity of the overall workforce. Moreover, the challenges created by poor waste management, deforestation, and inadequate access to clean water further contribute to deteriorating health outcomes, exacerbating the loss of productive human capital. There are several pollution prevention strategies with great potential. The latter includes the transition to non-polluting renewable energy sources such as solar, wind, and hydropower, reducing reliance on fossil fuels, enhancing public transport, and incorporating pollution prevention into future planning. Such strategies, nevertheless, require good governance and leaders who recognize the growing danger of pollution, both as a public health concern and a societal burden, and are ready to engage civil society and the public in accepting environmental concerns as a concrete risk to their well-being and quality of life.
Addressing the barriers to Africa’s competitiveness requires a coordinated and multifaceted approach. Economic reforms that prioritize infrastructure development, diversification, and job creation are essential for taking advantage of new opportunities and reducing vulnerability to external shocks. In addition, investments in reliable energy, efficient transport systems, and digital connectivity will empower businesses to operate more effectively and allow them to access overseas markets.
Equally important is the strengthening of governance and institutional frameworks. Transparent, accountable, and efficient public institutions are vital for fostering a stable business environment and attracting both domestic and foreign investment. Efforts to enhance the managerial capacity within firms (for example, targeted training, improved access to finance, and adoption of modern technologies) can enable African enterprises to scale and compete on a global stage.
Finally, social empowerment must be at the heart of any strategy to boost competitiveness. By promoting the economic inclusion of women and marginalized communities, Africa can harness the full potential of its diverse population. In addition, policies that support financial literacy, entrepreneurship, and equitable access to resources will not only drive innovation but also ensure that growth is inclusive and sustainable.
Addressing all these areas is crucial for Africa to achieve its competitiveness aspirations and thus establish itself as a dynamic player in the global economy.
José Caballero Senior Economist
Fabian Grimm
Research Specialist
William
Milner
Associate Director
The IMD Africa Prosperity Rating (APR) offers a robust and data-driven framework for assessing African countries’ progress toward greater prosperity. Unlike traditional approaches that rely heavily on GDP and a limited set of economic indicators, our methodology integrates four interconnected pillars, each representing one of the competitiveness challenges identified earlier in this report: economic challenges, governance and institutions, managerial dynamics, and societal empowerment. Figure 1 introduces such a structure.
These dimensions are analytically rigorous and contextually grounded in Africa’s developmental realities. The structure – built on 78 robust indicators and refined through normalization, weighting, and clustering – ensures accuracy and comparability across countries. It enables policymakers and researchers to pinpoint structural deficiencies, monitor progress over time, and benchmark performance in a more meaningful and multidimensional way.
While the framework’s strengths lie in its comprehensiveness and methodological soundness, it is equally important to recognize its potential limitations. Variability in data availability, especially in under-resourced countries, can introduce imbalances that affect interpretations and policy relevance.
Moreover, prosperity is dynamic with drivers that evolve and differ depending on a country’s development history and/or stage. Future iterations of the framework will therefore benefit from the incorporation of qualitative insights (for example, survey indicators) to better reflect local contexts. Nonetheless, the 2025 APR functions as a powerful tool for evidence-based policy formulation across the continent. It is:
• a holistic measurement system that evaluates countries’ economic health, governance quality, business environment, and social development
• a combination of four pillars, creating a framework that provides a comprehensive assessment of prosperity beyond traditional GDP measures
• a rendering of different dimensions of prosperity across all African economies
This pillar measures the fundamental economic performance of the region, including growth, investment, trade openness, and macroeconomic stability. Africa’s economic landscape is shaped by multiple bottlenecks that constrain the continent’s prosperity. One of the most pressing challenges is the lack of economic diversification. Many African economies remain heavily dependent on a narrow range of primary commodities for export revenues. For example, Libya and Angola rely extensively on oil exports to drive their GDP, while Zambia and the Democratic Republic of the Congo (DRC) depend disproportionately on refined copper. Such an over-reliance on a limited set of commodities makes these economies highly vulnerable to global market fluctuations and weakens their resilience to external economic shocks. Several key indicators help assess the extent of this challenge, including the share of exports as a percentage of GDP and the proportion of services in total exports. Additionally, the Economic Complexity Index, along with measures of export concentration, both in terms of
products and trading partners, provides valuable insights into a country’s level of diversification.
Inadequate infrastructure remains a significant barrier to prosperity across Africa, hindering productivity and raising the cost of doing business. Many economies face persistent structural challenges, including poor road networks, limited access to energy, and insufficient technological infrastructure. Unreliable electricity supply, which severely constrains industrial development and overall economic progress, is particularly relevant in Africa, affecting more than half of the continent’s population.1 Additionally, inefficient transport systems restrict the movement of goods and services, limiting trade, the mobility of labor, and the ease of achieving market expansion. Such infrastructural shortcomings can negatively impact foreign direct investment flows, both inward and abroad, as investors often seek markets with reliable logistics. They also restrict a country’s capacity to trade, often captured through and reflected in a low trade-to-GDP ratio, which further reduces integration into global markets. In some cases, inadequate infrastructure can also contribute to persistent unemployment by limiting job creation in key sectors such as manufacturing and services.
Labor market inefficiencies and macroeconomic instability further hinder Africa’s economic potential. High unemployment rates, particularly among young people, can reflect structural weaknesses in job creation and skills mismatches that limit workforce productivity and economic inclusion. A persistently high youth unemployment rate further suggests the presence of additional longterm risks, with the potential to negatively impact income generation, consumer spending, and a tendency to exacerbate social inequalities. Additionally, fluctuations in employment levels, measured as a percentage of the total working age population, often signal broader economic volatility, affecting household stability and overall economic resilience. Inflationary pressures, as measured by consumer price inflation, also play a role in restricting greater levels of prosperity by eroding citizens’ purchasing power and disproportionately affecting lower-income populations through the increase in the cost of essential goods and services. The price of gasoline plays a critical role in driving inflation, for instance, directly affecting private transportation expenses while also increasing operational costs for small and medium enterprises.
Box 1. What is prosperity?
Prosperity is a multidimensional concept that goes beyond mere economic wealth to encompass social well-being, institutional quality, and individual freedoms. Early economic theories largely linked prosperity to sustained increases in income and productivity.1 Modern definitions, however, emphasize broader societal outcomes. For such perspectives, prosperity is understood as the expansion of individual capabilities and freedoms, rather than just material affluence. 2 Similarly, others highlight the role of inclusive political and economic institutions in fostering long-term prosperity.3
Contemporary frameworks, such as the Legatum Prosperity Index, further expand the definition to include governance quality, health, education, environmental sustainability, and personal freedom.4 Thus, prosperity has become a holistic state of human development, supported by economic strength, strong institutions, social equity, and sustainable development.
Several key dimensions link competitiveness to prosperity.5 First, higher levels of competitiveness drive productivity growth, which is the principal engine of rising income and living standards.6 Highly competitive economies attract more foreign direct investment, which promotes job creation, technology transfer, and infrastructure development.7 Innovation also plays a critical role in these economies. For instance, economies that support research and development, flexible labor markets, and entrepreneurial dynamism are better positioned to advance prosperity and their overall competitiveness.8
Additionally, strong and transparent institutions (for example, the rule of law and government efficiency) reinforce competitiveness and facilitate broader social and economic well-being.9 In short, competitiveness connects to prosperity not only through economic efficiency but also through innovative ecosystems, institutional quality, and socioeconomic inclusivity.
1 See Trimble, C., Kojima, M., Perez Arroyo, I., & Mohammadzadeh, F. (2018). Electricity access in Sub-Saharan Africa: Uptake, reliability, and complementary factors for economic impact (World Bank Group Report No. 133771). World Bank. https://openknowledge.worldbank.org/ handle/10986/31333; and International Energy Agency. (2022). Africa energy outlook 2022. IEA. https://www.iea.org/reports/africa-energy-outlook-2022
1 Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, 70(1), 65–94.
2 Sen, A. (1999). Development as Freedom. Oxford University Press.
3 Acemoglu, D., & Robinson, J. A. (2012). Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Crown Business.
4 Legatum Institute. (2023). The Legatum Prosperity Index 2023. Retrieved from https:// www.prosperity.com/
5 See Bris, A. (2021). The Right Place: How National Competitiveness Makes or Breaks Companies. Routledge.
6 Porter, M. E. (1990). The Competitive Advantage of Nations. Free Press and OECD. (2016). The Productivity-Inclusiveness Nexus. OECD Publishing.
7 Blomstrom, M., & Kokko, A. (2003). Human capital and inward FDI. Available at SSRN 387900
8 Aghion, P., & Howitt, P. (2009). The Economics of Growth. MIT Press.
9 Acemoglu & Robinson, 2012
The second pillar evaluates the quality of public institutions, fiscal responsibility, political rights, and regulatory effectiveness. Effective governance and strong institutions are fundamental to a competitive economy, providing stability and predictability to citizens and firms alike. Many African economies, nevertheless, struggle with governance issues that undermine the level of trust in public institutions, further weakening their prosperity potential. Institutional weaknesses aggravate governance challenges, and the presence of operational inefficiencies, a lack of capacity, and political interference represent some of the most persistent threats to effective institutions in Africa. Such institutional fragility undermines the implementation of policies and regulations essential for fostering a business environment that generates sustainable value. For instance, the inefficiency of judicial systems in many countries leads to prolonged legal disputes, which deter investments and impede economic activities. In addition, political instability is another critical issue. Frequent changes in government, conflicts, and civil unrest create an unpredictable business environment that discourages both domestic and foreign investments. Countries like the DRC and South Sudan have experienced prolonged periods of political turmoil, which have significantly impeded their prosperity.
Measuring the quality of governance and institutions is difficult; however, some indicators offer useful insights into this dynamic. The strength of a governing body can be proxied through indicators that measure a government’s ability to collect revenue and effectively manage its budget. Hence, indicators like collected total tax revenues, the corporate tax rate on profit, and the consumption tax rate help assess a government’s ability to generate fiscal revenues, while indicators like government expenditure, budget deficit/surplus, and the percentage of total general government debt may help determine the effectiveness of governance. Tariff barriers on imports, as well as government subsidies to local firms, also provide useful information on determining how competitive an economy is in the international markets. Other useful indicators to measure governance include the Rule of Law Index, the Democracy Index, and how well a country is performing in achieving Sustainable Development Goals.
Corruption is another challenge that erodes public trust in public institutions, distorts market mechanisms, and diverts resources from critical development projects on the continent. When corruption is prevalent, resources are misallocated, costs for businesses increase due to bribery and fraud, and innovation is restrained as unfair practices discourage competition. Such an environment discourages both domestic and foreign investors who seek transparent and predictable conditions. Counteracting corruption requires strong legal frameworks, independent judiciary systems, and a culture of integrity and accountability within both the public and private sectors. Moreover, reducing
corruption enhances government effectiveness, improves the business climate, and ultimately contributes to a more competitive and prosperous economy. In this report, we construct two indicators (see Table 1) that measure the extent of corruption’s impact and prevalence in the African context. On the one hand, the corruption indicator captures the incidence of illegal exchanges, for instance, bribes, both at the executive level and public sector in general. On the other hand, corruption controls assess the mechanisms used to counteract corrupt practices. Such mechanisms include checks and balances, and the prosecution of office abuse.
to
including
constraints on executive power, the presence of anticorruption mechanisms, and enforcement through prosecution
The arithmetic average of the normalized values of the three component indicators
Militarism and nepotism also undermine an economy’s ability to achieve sustainable prosperity by diverting resources away from critical development sectors and weakening institutional integrity. Excessive military expenditure, when measured as a percentage of GDP, often comes at the expense of essential public services such as education, healthcare, and infrastructure. When governance structures prioritize such spending, it often leads to limited human capital development. Factors such as military veto power, impunity of the armed forces, and the presence of repression also hinder governance practices and discourage foreign investment. Furthermore, the military’s direct role in economic activities distorts market competition, reduces opportunities for private-sector growth, and tends to increase wealth concentration among the elites. The combination of such factors creates structural barriers that thwart innovation, reduce economic dynamism, and impede broad-based prosperity. We thus build two indicators to measure militarism and nepotism (see Table 2).
Table 2. Militarism and nepotism indicators: Components and calculations
What the indicator measures
Panel A: Militarism indicator
Military impunity
Militarism
Nepotism
1. 2. 3. 4. Military veto power
Military repression
Military involvement in the economy
The extent of military influence and autonomy in a country’s political decision-making, legal accountability, civil-military relations, and economic participation
Panel B: Nepotism indicator
1. 2. 3. Executive recruitment
Appointments in the state administration
Appointments in the armed forces
The extent of favoritism based on personal or political connections in appointment and promotion processes across executive, civil, and military institutions
Arithmetic average of the normalized values of the four component indicators
Arithmetic average of the three binary (dummy) component variables
The pillar assesses the business environment, labor market efficiency, productivity, and innovation capacity. In such a context, effective managerial practices are essential for fostering a dynamic work environment that ensures the efficient use of resources and drives business growth. However, a skills gap exists in certain African economies due to inadequate education and training systems that fail to equip individuals with the necessary business and managerial capabilities to navigate the unique challenges of their markets. Such conditions strongly limit their growth potential and restrict their access to capital. Moreover, bureaucratic hurdles and regulatory barriers make it difficult for businesses to operate efficiently and compete on a global scale. Furthermore, deficiencies in corporate governance structure pose a major obstacle to advancing business competitiveness in the continent. In addition, issues linked to transparency, weak accountability mechanisms, and inadequate protection of minority shareholders’ rights are prevalent. 2 Such governance shortcomings increase the risk of mismanagement, reduce investor confidence, and limit firms’ ability to attract long-term capital. Strengthening corporate governance standards is therefore crucial for enhancing business competitiveness and fostering a more resilient private sector.
Additionally, financial inclusion is a significant hurdle to economic dynamism. A considerable fraction of the African population remains excluded from formal
2 See African Union. (2025). African principles and guidelines on corporate governance: A framework for a competitive, resilient and inclusive private sector. African Peer Review Mechanism. Available from https://aprm.au.int/en/documents/2025-02-11/african-principlesand-guidelines-corporate-governance; and African Peer Review Mechanism. (2023). Africa governance report 2023: Unconstitutional change of government in Africa. African Union. Available from https://aprm.au.int/en/documents/2023-07-12/africa-governance-report-2023unconstitutional-change-government-africa
financial services. Such an environment limits their ability to save, invest, and access credit, which in turn constrains entrepreneurial activities and overall prosperity. While countries like Kenya have made good progress with mobile banking innovations such as M-Pesa, many economies on the continent continue to lag in financial accessibility. To capture these concerns, our study incorporates indicators such as access to financial services, financial inclusion by gender, stock market capitalization, and the number of listed domestic companies to reflect the size and economic significance of firms across the continent.
Other indicators that provide valuable insights into managerial dynamics include labor force data disaggregated by gender, foreign labor flows, and migrant stocks. Such criteria shed light on workforce composition and mobility. In addition, measures of productivity, including total working hours and labor efficiency, offer further understanding of managerial practices via the impact of labor and its skillset. Also, the proportion of women in managerial positions reflects labor market inclusivity, while indicators such as high-tech exports, ICT services, R&D expenditure, and patent applications per capita help assess an economy’s innovation capacity and readiness to address future challenges.
In this pillar, we examine human capital development, social inclusion, gender equality, and quality of life indicators. Societal empowerment is a critical driver of prosperity. In the African context, there are several barriers that impede such an empowerment. One of the most pressing issues is the high levels of poverty and inequality. Despite notable growth in some regions, benefits remain unevenly distributed, thus leaving a significant portion of the population in poverty. Furthermore, existing disparities limit access to education, healthcare, and other essential services, thus constraining human capital development. We capture inequalities in opportunities through various indicators, including gender, youth exclusion from the labor market, inequality in life expectancy, illiteracy rates, as well as the Gini coefficient.
Education is a fundamental pillar of societal empowerment, yet many African countries face challenges in providing equal access to quality education to their populations. Issues linked to inadequate funding, lack of infrastructure, and a shortage of trained teachers hinder the effectiveness of the region’s education systems. For instance, in countries like Chad and Niger, school enrollment rates and literacy levels are among the lowest in the world. Addressing these educational deficits is crucial to equip individuals with the skills and knowledge needed for economic participation and prosperity. We include measures of
total public expenditure on education, secondary school enrollment, as well as teacher-pupil ratios in both primary and secondary education, to reflect on the fairness and quality of the education provided to African youth.
Additionally, gender inequality continues to strongly hinder societal empowerment in Africa. Women and girls often face discrimination and limited opportunities in various spheres, including education, employment, and political participation. Empowering women and promoting gender equality can therefore have a transformative impact on the continent’s competitiveness. Studies have shown that gender-inclusive policies and practices lead to better economic outcomes and enhanced societal well-being.3 Although indicators measuring gender-based disparities are present throughout the study and within most of our pillars, income inequality and the presence of women in parliament are the two indicators that fall under the societal empowerment pillar, and for which data for meaningful comparison across countries is available.
Healthcare and inadequate health systems represent another major barrier to greater empowerment of African citizens. More specifically, high disease burdens, low domestic production of pharma for local markets, limited access to medical services, and poor health infrastructure hamper the overall wellbeing of the population. Improving healthcare access and outcomes is thus vital for maintaining a healthy and productive workforce and driving prosperity. In addition, addressing environmental challenges such as pollution can also be essential for safeguarding public health and maintaining a productive workforce. This is so because a decline in pollution levels can lead to fewer health-related disruptions in the labor market and lower healthcare costs.
Crucially, a comprehensive approach to societal empowerment must also bridge the digital divide, because expanding internet access and improving connectivity are crucial for education, business efficiency, and communication. High-speed internet access can foster innovation, connect remote regions to global markets, and provide educational resources, thus enhancing human development.
Additionally, tackling issues like homicide rates and ensuring freedom of the press are integral to empowering society. The former does so by increasing levels of personal safety, and the latter encourages civic engagement (for example, participating in political debates) and protects individual rights. Moreover, lower homicide rates contribute to social stability and investor confidence, while freedom of the press promotes transparency and accountability and keeps citizens informed, both of which are indispensable for robust governance.
3 See International Monetary Fund. (2022). Gender equality and economic development in SubSaharan Africa. IMF. Available from https://elibrary.imf.org/display/book/9798400246968/979 8400246968.xml
Our methodology integrates a comprehensive statistical approach to assess and compare the African countries’ performance across 78 indicators sourced from over 20 international databases. Each indicator is compiled into statistical tables, and values are ranked from best to worst to establish a relative performance hierarchy (see Statistical Tables section).
The indicators’ raw values are then normalized using their mean and standard deviation to create standardized scores. Of the 4,212 possible data points (54 countries and 78 indicators), 648 were missing. To address this, 498 missing scores were extrapolated using the average values from a peer group of four countries. We selected peers based on similarities in HDI, GDP per capita, geographic region, and population. We were unable to extrapolate 150 scores.
Each normalized score is weighted according to its correlation with the IMD World Competitiveness Ranking. We do so to capture the indicator’s relative impact on competitiveness. Specifically, weightings range from 0.5 to 1.5 (actual range: 0.58–1.36). In addition, 174 statistical outliers are Winsorized (capped) to minimize the impact of extreme values.
The available scores are then grouped into thematic factors (Prosperity Pillars), and a country’s scores within each pillar are averaged. These pillar scores are rescaled to a 0–100 range, with one country across the four pillars set at 0 and another at 100. The overall score for each country is then calculated by averaging the four pillar scores, followed by another rescaling to a 0–100 range for comparability.
Finally, k-means clustering is applied to each factor and overall score to provide a categorical rating system. This process classifies countries into eight performance groups, labeled from A1 (highest) to D2 (lowest).
The framework that underlines the APR builds on an approach initially based on several dimensions. It goes beyond traditional economic measures to capture the complex nature of the region’s prosperity. By integrating 78 indicators across economic challenges, governance and institutions, managerial dynamics, and societal empowerment factors, the framework provides a holistic assessment that accounts for the interdependence of these domains in boosting prosperity. Such a comprehensive methodology enables meaningful country comparisons that capture not only economic performance but also institutional quality, business environment strength, and societal aspects that strengthen the process towards
prosperity, such as the development of talent capabilities. The weighting system further strengthens the framework by recognizing that prosperity emerges from the interplay of factors linked to long-term competitiveness: Economic foundations, governance structures, managerial capabilities, and societal wellbeing. It thus develops a realistic picture of prosperity across African countries.
Despite such strengths, the framework faces notable limitations that deserve consideration. Reliance on quantitative indicators risks oversimplifying complex socioeconomic and cultural realities that may not be fully captured by those measures. It thus potentially misses contextual factors unique to each country’s development. Additionally, data availability and quality remain inconsistent across African countries, with some economies showing significant measurement gaps in key indicators. Such data gaps can distort comparative assessments and underrepresent less documented economies. In addition, the weighting system, while providing consistency, may not adequately reflect how the relative importance of different pillars varies according to a country’s development stage. For instance, factors like institutional quality may have a greater impact on fragile states, while innovation capabilities may be more critical for middleincome economies.
One of the issues in assessing African competitiveness is limited data availability. Specifically, out of the 164 statistics we use to assess competitiveness in the IMD World Competitiveness Ranking, there are only 71 indicators available for a sufficiently large number of African countries to allow for meaningful comparison.4 For instance, the consumption tax rate is only available for 31 countries out of the 54 in our sample, youth unemployment for 47, and access to financial services for 43 economies. In addition, the survey indicators we built for the evaluation of competitiveness are only available for a handful of African countries.5 For this reason, a full assessment of the competitiveness of the continent, following the World Competitiveness Center’s established methodology, is not yet possible.
What the available data does allow us to evaluate, however, is how well countries are managing the competitiveness challenges discussed previously. Any advancement in overcoming those challenges leads to greater prosperity for the population, and ultimately to long-term competitiveness.
Stage Purpose Description
Data collection
Indicator
scores
Statistical values for 78 indicators collected from over 20 international sources
Values are normalized using mean and standard deviation to create comparable scores
Missing scores (648) are addressed: 498 extrapolated from a peer group of four countries based on HDI, GDP per capita, region, and population; 150 remain blank
Raw scores are weighted based on their correlation with the IMD World Competitiveness Ranking (range: 0.5–1.5, actual: 0.58–1.36)
174 statistical outliers are Windsorised (capped) to reduce the impact of extreme values
Weighted and normalized scores form the basis of subsequent calculations
Scores within each prosperity pillar are averaged per country
Pillar and overall scores
Ratings
Pillar scores are rescaled to a 0–100 range (one country across the four pillars = 0; another = 100)
Four pillar scores are averaged to compute the overall score
Overall scores are rescaled again to a 0–100 range for crosscountry comparability
K-means clustering applied to pillar and overall scores to group countries into eight clusters (A1 to D2)
Collect and rank raw performance data across countries
Ensure data comparability through normalization
Estimate missing values using peer benchmarks for better coverage
Adjust scores for relevance based on competitiveness impact
Control for distortion due to extreme values
Finalize clean, weighted input scores
Generate average performance scores for each pillar
Standardize pillar scores to a uniform scale
Create an aggregated measure of national performance
Enable consistent comparisons of overall performance
Group countries into meaningful rating tiers based on performance
4 The total number of indicators we use to construct the ratings is 78. We incorporate additional indicators that capture the impact of militarism and corruption on the potential prosperity of the continent. These indicators are presented in the second section of this essay under the governance and institutions pillar.
5 These are the countries included in the sample of the 2025 IMD World Competitiveness Ranking: Botswana, Ghana, Kenya, Namibia, Nigeria and South Africa.
José Caballero Senior Economist
This report presents an in-depth assessment of the performance of all African countries included in the IMD Africa Prosperity Rating (APR). The data used to compile the Rating – drawn from the 2022–2024 period unless otherwise specified – covers a wide range of indicators crucial for assessing prosperity through the lens of the IMD APR framework discussed in the APR Framework and methodology section of this report. Such a framework evaluates countries’ capacity to foster an environment conducive to prosperity and, in the longterm, sustainable competitiveness across four fundamental pillars: economic challenges, governance and institutions, managerial dynamics, and societal empowerment.
As discussed in the methodology section, we rate countries’ performances ranging from A1 (representing the highest level of prosperity) to D2 (indicating the most challenging environments). To enable a structured comparison, this section identifies the characteristics of leading A-tier countries and explore the factors that differentiate performance levels between adjacent tiers (i.e., A1 vs. A2, A vs. B, B vs. C, C vs. D) and across wider gaps – e.g., A vs. C and B vs. D. Ultimately, we identify the most significant determinants of prosperity across the African continent. To do so, we discuss the positions of countries at the indicator level using the values as a reference. The goal is to provide a detailed, data-substantiated understanding of the strengths, weaknesses, and complex dynamics shaping prosperity in Africa.
The first section offers a comparative analysis of countries grouped by tier to understand the dynamics underlying prosperity across the continent. This allows for a clearer identification of structural advantages and persistent weaknesses across the different performance strata. The second section identifies the drivers of prosperity on the continent and summarizes the performance of countries within those drivers. The final section offers some reflections on the strategic priorities that can bridge the continent’s prosperity gaps.
To better understand the dynamics of prosperity across African economies, country performance is ranked by tiers based on the APR. The tiers range from A1 (highest) to D2 (lowest). The analysis highlights how countries at different levels of prosperity perform across the four prosperity pillars. The comparison between tiers enables us to identify common strengths among the top performers, structural weaknesses among the lower-ranked economies, and specific areas where the mid-tier countries show potential for upward mobility. This comparison provides a clearer picture of the disparities in prosperity across the continent. For ease of reference, the following table presents all countries in this study arranged into their respective tiers.
Table 1. Countries in the study, by rating groups
• Mauritius
• Seychelles
• South Africa
• Botswana
• Cabo Verde
• Egypt
• Kenya Namibia
Tunisia
• Equatorial Guinea
• Gabon
• Ghana Libya Morocco
Sao Tome and Principe
• Senegal
• Algeria
• Benin
• Côte d’Ivoire
• Eswatini
Ethiopia
Lesotho
Madagascar
Rwanda
• Tanzania
• Angola
• Cameroon
• Djibouti
• Gambia
Liberia
Malawi
Nigeria
Sierra Leone
• Togo
• Uganda
• Zambia
• Burundi
• Comoros
• Congo, Rep. Eritrea
Guinea-Bissau
Mauritania Mozambique
• Niger • Zimbabwe
• Burkina Faso
• Central African Republic Congo, Dem. Rep. Guinea
Mali
• Chad
• Somalia
• South Sudan
• Sudan
We begin by examining countries in the top tier of the APR – i.e., those rated A1 and A2. These economies serve as benchmarks for the rest of the continent. Their performance across economic, institutional, and societal indicators reveals the key attributes that define a prosperous and resilient national environment in Africa. Their leading positions are built upon a more robust and consistent performance across the pillars compared to their continental peers. Specifically, a key characteristic is their stronger economic foundation, clearly demonstrated by significantly higher GDP (PPP) per capita.
The Seychelles (A1, first, $41,077 per capita) and Mauritius (A1, second, $32,062) lead by a substantial margin. Such an achievement highlights their successful transitions to service-driven economies, particularly tourism. In the aforementioned sector, the Seychelles (A1) ranks first (46.84% of GDP) and Mauritius (A1) ranks third (12.76% of GDP) in international tourism receipts. Other
A-rated economies, such as Botswana (A2, sixth, $19,723), South Africa (A1, eighth, $15,723), Egypt (A2, fifth, $20,799), and Tunisia (A2, 10th, $14,338) – also display per capita incomes well above the continental median, which indicates greater overall wealth creation and productivity. Such economic strength is often coupled with greater structural sophistication.
In the Economic Complexity Index, Tunisia (A2, first, index 0.20), South Africa (A1, second, 0.08), and Egypt (A2, third, -0.10) dominate. The index captures the level of knowledge intensity embedded within their export bundle compared to the raw-material dependence prevalent in lower-rated economies. This generates greater resilience, often reflected in more diversified exports by destinations and products. For example, Egypt (A2) ranks first for partner diversification (31.97% of exports to top five partners) and second for product diversification (53.53% of exports of top five products), while South Africa (A1) ranks fourth and fifth, respectively. Importantly, the economic performance of A-rated countries is boosted by comparatively strong governance frameworks.
They consistently reach the top positions in the Rule of Law Index, with Mauritius (A1, first, 77.83), Botswana (A2, second, 66.04), the Seychelles (A1, third, 65.57), Namibia (A2, fourth, 62.74), and Cabo Verde (A2, fifth, 60.85) providing a context
A-tier countries show strong performance in tourism receipts. Such achievement highlights their global appeal and robust infrastructure. Even with a sharp decline among these economies (e.g., between Mauritius and Tunisia), their receipts remain significantly higher than those of lowerrated countries. Robust performance in tourism contributes to job creation, foreign exchange, and economic resilience. However, economies that depend heavily on tourism may be more vulnerable to external shocks such as aviation prices or general dips in tourist numbers due to external causes like global economic recessions. In this respect, Seychelles, Cabo Verde and Mauritius need to ensure that income generated from the tourism industry
A-tier economies display strong commitment to human capital development through high average investment in public education. Top performers such as Botswana, Cabo Verde or Tunisia spend more than 6% of their GDP on education. Slightly larger economies such as Egypt, Kenya and South Africa also invest between 4% and 6% of their GDP. Among countries in the A-tier, Namibia (A2) stands out with 9.68% of GDP invested in education. Conversely, the Seychelles and Mauritius, despite rating in the A1 category, spend around 5% of their GDP. Investing in education contributes to skilled labor development, innovation, and long-term prosperity. Countries with lower education spending risk reduced productivity and
with greater legal and regulatory certainty. This institutional advantage extends to better corruption controls, where Cabo Verde (A2, first, 0.88), Botswana (A2, second, 0.81), and Mauritius (A1, third, 0.77) lead. In addition, A-rated economies generally report low military-budget burdens.
A-rated economies also demonstrate clear leadership in critical managerial dynamics areas. Their superior overall productivity (PPP) is evident in the case of Egypt (A2, second, $71,732) and South Africa (A1, fourth, $60,033), which significantly outperform lower-rated economies. In addition, A-rated tiers reflect financial systems that are substantially more developed. Access to financial services, for instance, is high in Mauritius (A1, first, 90.5%) and Kenya (A2, third, 79.2%), while stock-market capitalization (as a percentage of GDP) shows exceptional depth in South Africa (A1, first, 289.1%) and Botswana (A2, second, 152.7%). Additionally, societal outcomes and infrastructure-related empowerment are stronger in A-rated economies. These countries top the continent in the Human Development Index (HDI). For instance, in the latter index, the Seychelles (A1, first, 0.802) and Mauritius (A1, second, 0.796) lead the way. Societal empowerment is generally more advanced as well. The latter is evidenced by a high number of internet users per 1,000 people – e.g., the Seychelles (A1) ranks second, Tunisia (A2) ranks third, Botswana (A2) ranks
fourth, and South Africa (A1) ranks fifth – and a significantly higher density of secure internet servers per million people – e.g., the Seychelles (A1) ranks first, and South Africa (A1) ranks second. Educational investment is also often prioritized, with Namibia (A2, first, 9.68% of GDP) and Botswana (A2, third, 8.06%) showing high total public expenditure on education. This convergence of strengths establishes A-rated countries as Africa’s prosperity leaders.
Comparison between A-rated and B-rated: Consistency, governance, and complexity
The distinction between A-rated and B-rated tiers primarily depends on the consistency of their performance across the prosperity pillars and, more specifically, on the depth of institutional and economic structures. While some B1 countries like Gabon (B1, third, with $24,128 GDP per capita) and Equatorial Guinea (B1, fourth, with $21,750) exhibit high per capita incomes due to resource wealth, such an economic advantage often fails to lead to strengths in governance or economic diversification. In the latter areas, A-rated economies excel more consistently. The governance gap is particularly significant. Countries in the A-rated tier overwhelmingly outperform those in the B-rated tier on the Rule of Law Index. For instance, comparing Namibia (A2, fourth, 62.74 value) with Ghana (B1, eighth, 51.42) or Algeria (B2, 30th, 22.64) highlights the considerable difference in institutional quality and predictability. Similarly, A-rated economies
generally score higher on corruption controls. Economically, the A-rated countries’ advantages in structural complexity are evident in their performance in the Economic Complexity Index. Top performers like Tunisia (A2, first, index 0.20) and South Africa (A1, second, 0.08) have significantly more complex export portfolios than most B-rated economies, many of which, like Algeria (B2, 12th, -0.64) or Nigeria (C1, but illustrative, 31st, -1.67), remain heavily reliant on less complex, often primary commodity exports. Such structural difference affects economic resilience and prospects for long-term value creation. While high gross fixed capital formation in B2 countries like Benin (B2, second, 40.64% of GDP) and Senegal (B1, fourth, 37.95%) signals potential future growth, it has not yet resulted in the broad-based institutional robustness or the level of business environment complexity that characterizes the A-rated economies.
Comparing A- and B-rated countries reveals significant gaps, especially in financial sophistication and innovation outcomes. In access to financial services, for instance, A-rated leaders (often reaching levels greater than 75%) contrast with Ghana (B1, fifth, 68.2%) or Ethiopia (B2, 24th, 46.5%). In addition, the disparity in stock-market capitalization is stark. South Africa (A1, first, 289.1%), for example, outperforms Morocco (B1, fifth, 5.41%) or Ghana (B1, 14th, 8.7%). Similarly, A-rated economies publish more scientific articles, which underline their higher innovation capacities. Egypt (A2, first, 24,025 articles) leads in such publications with B-rated economies like Morocco (B1, fourth, 8,445) or Ghana (B1, eighth, 3,075) trailing behind despite strong performances at the continental level. Social empowerment outcomes also favor A-rated countries, which generally have higher HDI scores – e.g., compare Mauritius (A1, second) with Ghana (B1, 16th) – and often better performances in health and education access indicators.
A-rated countries consistently score high in the Rule of Law Index. Such performance suggests reliable institutions, transparent governance, and strong legal systems that protect property rights and enforce contracts which reduces investment risks, attracts capital, and fosters business confidence. In contrast, B-rated countries, though displaying relatively strong performance in this indicator as well, face more pronounced governance challenges that deter investment and erode social trust (e.g., Lesotho and Algeria).
Comparison between A-rated and C-rated: A widening prosperity gap
The comparative gap becomes more pronounced when A-rated economies are contrasted with those in the C category. These differences are not incremental but highlight fundamentally divergent economic and governance contexts. Economically, the disparity in wealth and productivity is substantial. For instance, contrast the Seychelles (A1, first, $41,077 GDP (PPP) per capita) with Nigeria (C1, 21st, $6,542) or Zambia (C1, 29th, $4,190), let alone Burundi (C2, 53rd, $985.6). Such differences in economic capacity profoundly affect investment potential, domestic market size, and the resources available for public services. The institutional gap is equally significant. While A-rated economies lead in the Rule of Law Index, many C-rated economies languish much lower; for example, Nigeria (C1, 32nd, 19.81 value), Angola (C1, 37th, 16.04), and Zimbabwe (C2, 42nd, 11.32).
A-rated economies benefit from diversified exports, which lowers their vulnerability to external shocks. On average, A-rated economies’ top 5 exports as a percentage of their total export basket represents between 50% and 60%. In contrast, C-rated countries, with a few exceptions such as Djibouti (41%), have higher concentration of exports where their top 5 products represent more than 80% of their total exports. Such high concentration exposes them to volatility, as sudden demand shifts for their reduced number of products could seriously hamper the domestic economy due to over-reliance.
Such performance indicates substantially higher risks in contract enforcement, property rights, and legal certainty, which in turn hamper business operations. In addition, economic structures also differ. A-rated performers boast relatively complex economies. In contrast, C-rated economies like Angola (C1, 30th in Economic Complexity, -1.55 value) or Zambia (C1, 13th, -0.70) often rely heavily on a narrow range of primary exports, resulting in high export concentration by product –e.g., Angola (50th, 99.03%), Zambia (C1, 25th, 83.14%). C-rated countries are thus highly vulnerable to global price shifts.
Additionally, the entrepreneurial activity and dynamism of the business environment are stronger in A-rated economies. The new-business density is significantly lower in C-rated economies. For example, while Nigeria (C1, 20th) has a density of 1.16 new businesses per 1,000 people, South Africa (A1, second) has a density of 11.05. Societal empowerment, in terms of both physical and human outcomes, presents another area of significant difference. For instance, A-rated economies typically have far better internet user penetration and secure internet server density than C-rated economies like Uganda (C1, 24th, 35.4 servers per million) or Zambia (C1, 22nd, 39.4). Furthermore, the HDI scores show a clear divide, with A-rated clustered at the top while C-rated fall predominantly into the medium or low human development categories – compare Botswana (A2, eighth) with Uganda (C1, 23rd) or Zambia (C1, 22nd). Such a rating highlights significant disparities in health, education, and living standards. The cumulative effect of such widening gaps across economic performance, governance, managerial
Most A-rated countries foster a dynamic entrepreneurial environment with high rates of business creation. C-rated countries lag in this dimension, which in turn hinders innovation, job growth, and economic diversification. Such an entrepreneurial gap has cascading effects: fewer new businesses reduce competition, slow job creation, and limit economic diversification beyond traditional sectors. The disparity also suggests that A-rated countries are better positioned to adapt to economic shocks and technological changes through their more dynamic private sector. Conversely, C-rated economies remain vulnerable due to their less dynamic business environments and over-reliance on established sectors or state-led economic activity.
dynamics, and societal empowerment creates a more challenging path to prosperity for C-rated countries compared with their A-rated peers.
Comparison between B-rated and C-rated: Crossing the threshold of stability
The distinction between B-rated to C-rated tiers marks a significant shift, often representing the difference between economies facing moderate challenges and those experiencing deeper structural weaknesses and instabilities. While B-rated countries have their own prosperity hurdles, they generally exhibit greater macroeconomic stability, more functional institutions (albeit imperfect), and higher income levels than C-rated economies. Economically, B-rated countries like Morocco (B1, 14th, $10,615 GDP per capita) or even a resourcedependent economy such as Algeria (B2, seventh, $17,718), have significantly higher average incomes than most C-rated countries like Uganda (C1, 34th, $3,641) or Malawi (C1, 51st, $1,713). Such levels impact domestic demand and fiscal capacity. While some B-rated economies face challenges, C-rated countries often exhibit more severe macroeconomic instability. Consumer price inflation projections for 2024 highlight this trend, with C-rated countries like Nigeria (C1,
B-rated countries maintain relatively stable inflation, which support stronger purchasing power and economic stability. Conversely, most C-rated countries face higher and more volatile inflation, which undermines savings, planning, and investment.
49th, 32.46%), Zambia (C1, 41st, 14.56%), Angola (C1, 47th, 28.39%), and Burundi (C2, 45th, 20.00%) facing significantly higher inflation than B-rated economies such as Morocco (B1, fifth, 1.72%) or Benin (B2, sixth, 2.00%). At issue here is that high inflation erodes purchasing power and creates uncertainty, thereby hindering economic activity.
In addition, fiscal health tends to be more precarious in the C-rated economies. While debt is a concern across Africa, C-rated countries including Zambia (C1, 50th, debt of 127.3% of GDP in 2023), Mozambique (C2, 48th, 96.0%), and Burundi (C2, 45th, 86.8%) often carry heavier total general government debt burdens compared to B-rated averages (although there may be some exceptions). Such a high level of debt often leads to crippling interest payments as a percentage of revenue, as seen in Malawi’s case (C1, 35th, 29.92%), consuming vast portions of government income and limiting developmental spending. Institutionally, while B-rated economies face governance challenges, they generally score higher on indices like the Rule of Law Index and the Democracy Index than C-rated economies. Such performance suggests a slightly more stable and predictable sociopolitical environment. For instance, compare Ghana (B1, sixth in the Democracy Index) with Cameroon (C1, 38th) or Togo (C1, 31st). Managerial dynamics indicators, such as access to finance and productivity, also tend to favor B-rated over C-rated economies.
Comparison between B-rated and D-rated: Relative stability versus systemic crisis
The prosperity gap between B-rated and D-rated economies is substantial. It often represents the difference between countries managing significant development challenges and those experiencing systemic crises, conflict, and state fragility. In this context, while B-rated countries strive for greater economic diversification and institutional strengthening, D-rated economies grapple with fundamental issues such as state legitimacy and basic service provision. The most significant difference lies in governance and security. B-rated economies, despite flaws, generally maintain functioning state structures. In contrast, D-rated countries consistently rank at the bottom of the Rule of Law Index – e.g., the Central African Republic (CAR) (D1, 50th, 3.77) or South Sudan (D2, 53rd, 1.42) – compared to B-rated mid-tier countries like Senegal (B1, 12th, 42.92). Furthermore, they experience extremely high levels of political violence and instability. Specifically, their performance in the Political Terror Scale is feeble, with most D-rated economies achieving scores of 0.00 or 0.25, which implies widespread terror. They also remain at the bottom of the Democracy Index rankings – e.g., CAR (D1, 50th, 1.18), Chad (D2, 49th, 1.67).
Additionally, the militarism index scores are predominantly high for D-rated economies like the Democratic Republic of the Congo (DRC) (D1, 40th), Mali (D1, 40th), Chad (D2, 24th), South Sudan (D2, 24th), and Sudan (D2, 48th). Such performance reflects a much higher prevalence of military spending compared
The performance of B-rated countries in this indicator highlights higher degrees of stability and respect for rights, which in turn contributes to attracting investment and advancing development. Conversely, D-rated countries perform poorly, which signals high levels of repression and/or overall conflict. This situation severely hampers the achievement of higher levels of prosperity.
to GDP and health spending than seen in B-rated tiers. Furthermore, active conflict or its immediate aftermath paralyzes D-rated economies, which greatly exacerbates the economic challenges they face. For instance, their GDP (PPP) per capita is often low –e.g., CAR (D1, 52nd, $1,296), South Sudan (D2, 54th, $762.9) – and growth prospects are frequently negative or negligible – e.g., Sudan (D2, 53rd, -20.27% growth), South Sudan (D2, 54th, -26.42%). Such performance contrasts sharply with the generally positive, albeit sometimes moderate, growth in B-rated economies.
Overall productivity (PPP) in D-rated economies – e.g., the DRC (D1, 30th, $4,119) – is extremely low compared to B-rated averages. Furthermore, access to financial services collapses in D-rated economies like Chad (D2, 39th, 23.7%) or CAR (D1, 41st, 13.8%), whereas B-rated economies often experience rates of above 50% of their adult population with such access. Moreover, societal empowerment outcomes reflect such dire situations. For example, D-rated countries fall into the lowest positions on the HDI – e.g., CAR (D1, 52nd, 0.387), South Sudan (D2, 53rd, 0.381). Importantly, such results underline failings in health, education, and living standards. Other indicators related to societal empowerment, including internet connectivity – e.g., CAR (D1, 47th, 105.8 internet users per 1,000) or Chad (D2, 44th, 178.7 users), compared to B-rated economies often above 500 users – are severely limited. In short, the gap between B and D-rated economies represents fundamental differences in state capacity to provide security, basic services, and a functional economic environment.
B-rated countries achieve strong internet access, with more than half of the economically active population connected. Such an achievement boosts digital inclusion and economic prosperity for larger segments of the population. In contrast, D-rated economies lag in this indicator, which hinders participation in the digital economy and widens socio-economic inequalities among the population.
Comparison between C-rated and D-rated: Struggling versus failing
While C-rated countries face severe challenges, the comparison with D-rated economies highlights the distinction between struggling economies and those experiencing state failure or near-collapse. Specifically, C-rated countries, despite weaknesses in governance and economic diversification, generally maintain more cohesive state structures and stronger basic socioeconomic functioning than D-rated economies. Furthermore, the critical difference often revolves around the pervasiveness of conflict and the breakdown of state authority. D-rated countries such as CAR (D1), Mali (D1), Somalia (D2), South Sudan (D2), and Sudan (D2) are frequently characterized by ongoing or recent large-scale violence that undermines all aspects of life and governance. Their performance in the Rule of Law Index and high scores in the Political Terror Scale are significantly worse than the C-tier average. For instance, comparing Zambia’s (C1, 21st) and the DRC’s (D1, 49th) Rule of Law Index positions reveal major differences between the two economies.
While C-rated economies show mixed military spending, D-rated economies generally exhibit a more consistent pattern of moderate-to-high military burden relative to their capacity. Military expenditure as a percentage of GDP is notable in Mali (D1, 51st, 3.33%), Chad (D2, 48th, 3.08%), and South Sudan (D2, 44th, 2.63%). In addition, the military/health spending ratio highlights the severe trade-offs in D-rated economies, with Mali (D1, 52nd, 0.85), Chad (D2, 49th, 0.71) showing high ratios, generally surpassing the C-tier average (excluding Republic
C-rated countries maintain higher productivity than D-rated economies. The latter trail significantly, which highlights structural weaknesses and lower labor returns. Exceptions include Zimbabwe in the C-tier, which has experienced multiple years of high inflationary pressures and therefore a reduction in the purchasing power value of GDP per employed individual. Sudan, in the D-tier, outperforms its peers in overall productivity due to high oil-revenues that inflate the value of GDP per worker.
of the Congo). Furthermore, the fundamental insecurity experienced by D-rated countries severely affects economic activity. While C-tier economies are often fragile and undiversified – e.g., Angola (C1) and Nigeria (C1) – D-rated countries are frequently feeble with an extremely low GDP per capita – e.g., CAR, the DRC (D1), Niger (C2), South Sudan (D2), and Burundi (C2) are all below $2,000 (PPP) –and, in cases like Sudan (D2) and South Sudan (D2), are experiencing devastating negative growth.
While C-rated economies struggle, D-rated economies often lack basic functional systems related to managerial dynamics. Overall productivity (PPP) sinks further in D-rated countries like the DRC (D1, 30th, $4,119), in contrast with Zambia (C1, 19th, $12,852). Similarly, access to financial services drops from C-rated levels (often 30-55% of the adult population with access) to below 25% in D-rated economies like Chad (D2, 39th, 23.65%). Societal empowerment indicators further illustrate this divide. While C-rated economies typically rank poorly on the HDI, D-rated countries occupy the lowest positions in the index – e.g., Niger (C2, 50th, 0.394 value), CAR (D1, 52nd, 0.387), South Sudan (D2, 53rd, 0.381) – which highlights extremely low levels of human development. Furthermore, public services such as internet access are often rudimentary or nonexistent outside capital cities in D-rated countries, far below the levels, however inadequate, found in most C-rated economies. In addition, data collection is often absent in D-rated countries, which results in numerous missing indicators. Such a lack of data is a symptom of the breakdown in state functionality. While C-rated economies struggle with deep-seated development issues, D-rated countries often face a more fundamental crisis of state viability and security.
Box 10. Access to financial services, comparison of C-rated and D-rated countries
Most C-rated economies provide broader financial access, which promotes savings, entrepreneurship, and resilience. In Uganda and Cameroon, for instance, over half of their adult population have access to financial services such as a personal bank account. In contrast, D-rated countries leave larger portions of their populations out of similar economic opportunities. In these countries, on average, seven out of ten working age adults lack access to a bank account.
The preceding comparative assessment highlights that prosperity in Africa is unevenly distributed across a broad spectrum of economic, institutional, and societal conditions. This section summarizes these findings and identifies the core structural drivers that differentiate high-performing from lagging economies. Governance quality, economic complexity, societal empowerment, and macroeconomic stability emerge as the most decisive variables shaping national prosperity trajectories on the continent.
Governance and institutional quality emerge as the single most decisive difference across the tiers. The gap between A-rated and D-rated countries on indicators such as the Rule of Law Index is staggering. For instance, Mauritius (A1, first, 77.83) scores nearly 20 times higher than the DRC (D1, 49th, 4.25) or South Sudan (D2, 53rd, 1.42). Such profound disparities highlight the difficulties in contract enforcement, property rights protection, judicial independence, and regulatory predictability that D-rated countries experience. High performers like Botswana (A2, second, 66.04) provide far more stable and predictable environments for business operations than mid-range economies such as Ghana (B1, eighth, 51.42) or Senegal (B1, 12th, 42.92). The contrast is even sharper relative to the instability seen in C and D-rated countries such as Nigeria (C1, 32nd, 19.81). Furthermore, corruption controls reflect such divergence, with Cabo Verde (A2, first, 0.88) and Botswana (A2, second, 0.81) displaying more effective frameworks, whereas Equatorial Guinea (B1, 50th, 0.00) and South Sudan (D2, 48th, 0.04) exhibit systemic failures. Moreover, other governance and institutional indicators, such as the Democracy Index and Political Terror Scale, reinforce such patterns. Specifically, those indicators highlight greater democratic consolidation and lower levels of state violence in A and some B-rated countries relative to authoritarianism and insecurity more pervasively experienced by C and D-rated tiers. In short, weak governance increases transaction costs, deters investment, undermines efficiency, and erodes public trust, thus becoming a fundamental barrier to prosperity.
The complexity and diversification of national economies form another critical dividing line. A-rated countries such as Tunisia (A2, Economic Complexity rank first, index 0.20), South Africa (A1, second, 0.08), and Egypt (A2, third,-0.10) exhibit far more complex economic structures compared to the resource dependence typical of B and C-rated economies. Moreover, countries like Algeria (B2, 12th, -0.64), Angola (C1, 30th, -1.55), and Nigeria (C1, 31st, -1.67) display significantly lower economic complexity, which leads to high export concentration by product. While Egypt (A2, second, 53.53%) and South Africa (A1, fifth, 59.07%) have relatively diversified export profiles, Angola (C1, 50th, 99.03%), Libya (B1, 51st, 99.05%), and Nigeria (C1, 46th, 95.25%) remain reliant on a narrow range of commodities, which makes them highly vulnerable to price volatility. Furthermore, the capacity to move up the value chain is also uneven, with indicators such as high-tech exports suggesting overall stronger performance by A and upper B-rated economies – e.g., Tunisia (A2, fourth, 7.19%), South Africa (A1, eighth, 5.48%) – compared to lower-rated tiers. Such a structural advantage grants countries greater resilience and opportunities for prosperity.
Societal empowerment and technological readiness sharply delineate the tiers. A-rated countries like the Seychelles (A1, first, HDI 0.802) and Mauritius (A1, second, HDI 0.796) achieve high levels of human development, whereas C-rated and D-rated economies predominantly occupy “medium” to “low” categories, with South Sudan (D2, 53rd, 0.381) and Somalia (D2, 54th, 0.380) at the extreme bottom of the index. In addition, life expectancy further illustrates such disparities – e.g., Algeria (B2, first, 77.1 years) and Chad (D2, 49th, 53 years) – as does educational attainment, with A-rated countries investing substantially more in education –e.g., Namibia (A2, first, 9.68% GDP), Botswana (A2, third, 8.06%) – compared to D-rated economies like Somalia (D2, 48th, 0.27%).
Technological gaps are equally noteworthy. Internet users per 1,000 people far exceed 700 in leading A and B-rated economies – e.g., Morocco (B1, first, 881), the Seychelles (A1, second, 816) – whereas D-rated countries often remain below 200 – e.g., Chad (D2, 44th, 179), CAR (D1, 47th, 106). Furthermore, secure internet server density widens the digital divide, which ultimately limits participation in the modern economy for lower-rated economies and thus severely constrains the development of their business environment.
Macroeconomic stability and the development of financial systems
Macroeconomic stability and financial sector development are fundamental enablers of prosperity. In this regard, there are profound disparities across the different tiers. For instance, inflation remains a critical challenge in many C-rated and D-rated countries, where hyperinflationary environments severely affect savings and inhibit investment. The Seychelles (A1, first, 0.82%) and Morocco (B1, fifth, 1.72%) maintain low inflation rates, in sharp contrast with Nigeria (C1, 49th, 32.46%), Egypt (A2, 50th, 33.30%), and extreme cases like Zimbabwe (C2, 54th, 635.31%).
Furthermore, fiscal sustainability highlights the divide between tiers, with extreme debt burdens in Zambia (C1, 50th, 127.3% of GDP), Sudan (D2, 52nd, 344.4%), and Eritrea (C2, 51st, 260.4% in 2019), which significantly constrains state capacity. In addition, high interest payments as a share of government revenue – e.g., Malawi (C1, 35th, 29.92%) – exacerbate fiscal vulnerabilities. Additionally, financial-sector development remains largely confined to A-rated economies, such as Mauritius (A1, first, 90.5% of adult population with access to financial services) and South Africa (A1, second, 85.4%), which also maintain deep and liquid capital markets – e.g., South Africa (A1) ranks first in stockmarket capitalization (289% of GDP) and Mauritius (A1) ranks third (66% of GDP). In contrast, most C and D-rated economies suffer from limited financial inclusion and negligible stock-market activity.
Drawing on dynamic assets and making concerted efforts
Our assessment of economies’ performance at a tier level, taken together with our structural drivers, provides a comprehensive lens on the multifaceted nature of prosperity in Africa.
The framework we have developed highlights that leadership – embodied by our A-rated economies – is built upon a mutually reinforcing foundation of stable and effective governance, diversified and increasingly complex economies, significant investment in human capital and technological infrastructure, and sensible macroeconomic management. Conversely, the struggles of our C-rated – and particularly our D-rated – tiers underscore the negative impact of institutional fragility, conflict, and economic vulnerability. These stem from resource dependence or lack of diversification, severe infrastructure deficits, and macroeconomic instability.
The most significant factors differentiating performance levels across the continent are the quality of governance and institutions, the structure
and sophistication of the economy, the level of societal empowerment and technological readiness, and the stability of the macroeconomic environment.
In the long term, increasing prosperity levels across Africa will take a concerted effort to strengthen governance and combat corruption; to promote economic diversification and value creation, to accelerate investment in education, health, and digital infrastructure, and to ensure fiscal discipline and price stability.
Africa’s youth population – its most dynamic asset – presents an opportunity for a demographic dividend, if investments in quality education, skills development, and employment generation are prioritized. Future prosperity in Africa will increasingly depend on inclusive growth models that expand access to opportunities, reduce inequality, and ensure that economic gains are widely shared.
Additionally, resilience to climate change and external shocks will be central to protecting prosperity gains. The development of green infrastructure, the adoption of sustainable agricultural practices, and the expansion of climate finance mechanisms will help cushion economies from environmental and geopolitical volatility.
As African economies work to increase their prosperity, a forward-looking vision that integrates environmental sustainability, technological transformation, and inclusive governance will be essential for unlocking the continent’s vast potential.
Importantly, improvements in data availability, particularly in the most fragile states, are also crucial for effective policy design and monitoring progress towards a more prosperous future for Africa.
Matisse Graf WCC Consultant
William Milner Associate Director
Since 1989, the IMD World Competitiveness Yearbook (WCY) assesses and ranks economies based on their ability to achieve and sustain long-term value creation. It offers a robust analytical tool to monitor how governments tackle various economic, political, social and cultural challenges to create the framework and conditions necessary to support businesses and citizens alike. The IMD World Competitiveness Ranking therefore aims to measure key aspects of this competitiveness framework and evaluates economies based on criteria as diverse as institutional effectiveness, human development, quality of life, and governance. At the core of competitiveness lies the capacity of countries to be productive. The latter,it is not necessarily a consequence of competing with other countries per se, but rather the result of effective policies that enhance human and physical capital through a variety of means such as open borders, trade and investment facilitation, as well as public spending on education, healthcare and infrastructure.
This annex reviews the fundamental elements of competitiveness and offers insights into their impact and significance. Through this discussion, we highlight some of the most important elements underlining the structure and methodology of our IMD Africa Prosperity Rating: A Report on the Challenges to Competitiveness. Thus, the discussion reveals some of the key underlying concepts that drive our analytical framework in assessing Africa’s potential for higher prosperity.
The size of the economy significantly affect its structure, but not necessarily its competitiveness. On the one hand, large economies can harness their economic influence, benefit from economies of scale, and rely on a large domestic market. On the other hand, large economies tend to be less agile and may have diseconomies of scale (such as traffic congestion and higher pollution levels). The size of an economy is commonly measured through its Gross Domestic Product (GDP), which measures the monetary value of all final goods and services produced in a country, over a specific period, calculated as the sum of
consumption, investment, government spending on goods and services, and net exports (exports minus imports).
However, GDP as a measurement has limitations; it does not measure output quality and omits hidden sectors of the economy. In addition, GDP fails to take into account externalities such as pollution, the distribution of wealth, or the cost-ofliving differences between different economies. GDP is thus a poor measure of an economy’s true performance. Other indicators, such as productivity, HDI, the rule of law, and gender inequality, are better equipped to gauge an economy’s competitiveness. However, GDP remains an interesting and comparable metric across countries, and it remains a key component of the World Competitiveness Ranking because it provides a holistic picture of global trends.
GDP per capita
GDP per capita measures the average economic output per person, offering insights into a country’s standard of living. While total GDP reflects the size of an economy, GDP per capita provides a more nuanced view of individual prosperity and economic well-being. Furthermore, higher GDP per capita often correlates with better access to education, healthcare, and quality infrastructure, all of which contribute to a more productive workforce. However, it is important to note that GDP per capita doesn’t account for income distribution within society. Therefore, while it is a useful measure of economic performance, it should be considered alongside other indicators to fully assess an economy’s competitiveness and the well-being of its citizens.
Globally, the most competitive economies often grow faster than less competitive developed peers, but slower than the fastest growing developing economies. This could indicate an interesting trend whereby economic growth – or how fast an economy has increased its output and productivity over a given period only depicts one side of a coin towards achieving the levels of prosperity that benefit both economic actors and citizens.
China, for instance, by continuing to reduce poverty and boost the infrastructure and education, strengthens the possibility of advancing in the rankings. And yet, China doesn’t rank among the top ten most competitive economies despite its
size and GDP growth potential. Competitiveness is therefore about prosperity, not necessarily growth.
Investment is a critical driver of economic growth and competitiveness. It drives the development of infrastructure, technology, and human capital, and, in doing so, lays the foundations for future productivity and innovation. Economies that attract and sustain high levels of investment often show stronger growth trajectories and greater resilience to economic fluctuations. In this context, robust institutions are fundamental because they contribute to increasing levels of investor trust, which is necessary for investors to commit their resources and capital.
Strong legal frameworks, transparent regulatory environments, and an effective government ensure that investments are protected, and returns are predictable. In contrast, economies with weak institutions or high levels of corruption may deter investment due to increased risks and uncertainties. Therefore, fostering a safe and reliable investment environment is essential. It not only encourages domestic investors but also attracts foreign direct investment. It also contributes to a higher likelihood of job creation, technological advancement, and overall economic prosperity.
Our focus on a domestic economy is often about whether it produces a wide range of products and services along the value chain, making it more resilient than similar-sized economies that generally do not. This is equally true for small economies that rely on trade (for instance, Singapore) and those with a large domestic market (for example, China and the USA).
Economies that export a wide range of complex products to many economies tend to be more resilient to economic cycles and shocks than similar-sized economies that do not. Additionally, larger economies that benefit from a relatively diversified market tend to trade less proportionally, as they have their own large consumer base that can support industry.
The most competitive economies each have a unique approach to becoming and remaining competitive, making government revenue and expenditure complex in terms of their correlation with competitiveness. The role of the government absolutely has an impact on competitiveness, and a government’s success here depends on how well each aligns governance structures with economic goals, cultural context, and long-term priorities. In contrast, the size of the government does not correlate with competitiveness; both large (for instance, Sweden) and small (for instance, Singapore) governments can be effective.
High tax burdens stifle innovation, and reduce individual motivation. However, tax money well spent has a large multiplier effect on the economy, and the redistributive aspects of taxation increase social cohesion and overall quality of life. While tempting, subsidies for social services and basic goods often come at the expense of long-term investment in infrastructure and education.
Government debt is not necessarily a negative if it results from wise investment, and interest is manageable. Nevertheless, a large existing debt can thwart an economy’s capacity to react quickly to economic shocks, making it less resilient.
A bureaucracy – and the procedures it oversees – should function as enablers, not inhibitors, of economic processes. For instance, small and medium-sized enterprises (SMEs) are often regarded as important drivers of the economy. While there needs to be checks and balances to regulate their activity, hence the existence of bureaucratic processes to set up the regulatory framework in which they operate, these must be simple and effective to facilitate business start-ups. This is because SMEs drive higher levels of innovation and improve the agility of an economy. Looking at the bigger picture, government involvement cannot consist of an ad hoc series of measures. It must be part of a good country strategy, not only in its formulation and objectives but also in its execution.
Societal indicators, which together provide an assessment of a country’s societal framework, play a vital role in measuring the development and quality of life within an economy. Metrics such as the homicide rate and the GINI Index are extremely useful to capture the level of social cohesion within an economy, while indicators like gender equality and the rule of law serve as critical measurements that underpin economic performance.
One necessary condition to achieve progress is often the process of building national consensus, particularly in the face of deep socio-economic reforms. This consensus can emerge from bottom-up engagement of citizens or topdown leadership from governments and institutions, underlining the critical and essential role of political leadership in shaping the unique path to competitiveness that an economy may follow.
Generally, strong institutions provide stability, fairness, and a level playing field, making them important drivers of the long-term performance of the economy. Effective institutions, rather than strong but unenforced laws, provide the foundation for and are a prerequisite to the effective implementation of the rule of law. Corruption, for example, cannot be tackled without strong institutions, and curbing corruption is a necessary condition for a competitive economy.
Corruption threats competitiveness by undermining efficiency and fairness of economic systems. Furthermore, it distorts markets, deters investment, and erodes trust in public institutions. When corruption is prevalent, resources are misallocated, costs for businesses increase due to bribery and fraud, and innovation is restrained as unfair practices discourage competition. Such an uncertain environment discourages domestic and foreign investors who seek transparent and predictable conditions for their financial and capital placements.
Reducing corruption is difficult. It requires strong political leadership willing to challenge the status quo. This could, however, be achieved by strengthening legal frameworks, supporting independent judiciary systems, and promoting integrity and accountability in both the public and private sectors. Despite the longer timeframe required to undergo such transformations, a successful reduction of corruption can significantly enhance government effectiveness and improve the domestic business climate.
Job creation in an economy lies primarily with the private sector. The public sector’s role is ideally to facilitate private sector effectiveness. Indeed, economies in which public employment is disproportionately large tend to be less competitive.
Successful economies tend to bolster an ecosystem in which large and small companies and enterprises coexist within a fair and competitive market. Both are equally important but for different reasons: whereas SMEs create jobs and support the operations of larger firms within their economy, larger firms, often seen as national champions, act as true focal points in financial markets and attract domestic and foreign capital.
The progression of an entrepreneurial idea to the creation of an SME, and potentially to a large or publicly traded company, is an important component of a dynamic economy. Such an economy renews itself and its composition in an agile way by responding efficiently to market demands and trends. Individual firms as well as entire industries wax and wane over time, but without new enterprises, both the economy and standards of living stagnate. A good example of this can be derived from looking at the S&P 500 index measurement, which started in 1957, and for which fewer than 100 of the original companies still figure on the list today.
Two crucial needs for an innovative economy are ideas and access to finance. Financing can come in many different forms. Bank loans, government grants, venture capital, angel investors, or IPOs are just some of the ways that allow a company to invest and develop. To put it differently, a healthy financial sector capable of supporting local firms relies on multiple actors who each provide different types of financial services to firms and entrepreneurs.
Efficient banking systems, for instance, ensure that businesses and individuals have access to reliable credit, encouraging entrepreneurship and the expansion of economic activity. In contrast, venture capital and angel investors are vital in supporting new ideas and startups through their funding, bridging the gap between innovation and the commercialization of new products. Moreover, robust stock markets allow companies to raise capital and act as enablers for larger-
scale investments in technology, infrastructure, and human capital. Lastly, a welldeveloped financial services sector also supports the smooth functioning of the economy by offering risk management tools, facilitating trade, and enhancing resource allocation.
Research drives innovation and allows economies to develop new technologies, improve existing processes, and uncover solutions to complex challenges. Robust investment in research and development (R&D), both by public institutions and private enterprises, also strengthens and promotes a culture of innovation that keeps industries at the forefront of global markets. Research can be funded and disseminated in many ways. For example, innovation parks associated with universities allow clusters of specialist and related businesses to emerge, share information and skills, and form an ecosystem of partners and suppliers.
These clusters facilitate knowledge transfer and efficiency gains, which then strengthen their members’ ability to compete nationally and globally. These processes also tend to accelerate the transformation, commercialization, and monetization of ideas into market-ready products and services. Additionally, research informs evidence-based policymaking, ensuring that policies and national strategies are grounded in data and insights. By prioritizing research, economies boost their innovative capacity, build resilience and adaptability, and gain a competitive edge in a rapidly evolving global landscape.
A healthy population is more productive and capable of driving economic growth as good health reduces absenteeism, lowers healthcare costs, and enables full participation in education and the workforce. Investing in public health infrastructure, preventive care, and access to quality medical services enhances the well-being of citizens and the resilience of the economy against health crises. Additionally, a strong emphasis on health can improve a country’s attractiveness to skilled workers and investors who value a high quality of life. Therefore, health is not only a social priority but also a strategic economic asset that supports long-term competitiveness.
Education is a fundamental driver of competitiveness. Education imbues individuals with the skills and knowledge needed to adapt and excel in a rapidly changing environment. Strong education systems tend to promote innovation by cultivating critical thinking, creativity, and problem-solving capabilities from an early age, skills that are highly complementary to the demands of tomorrow’s job market. Advanced technical and vocational training also ensures a workforce that can meet the demands of modern industries, while world-class universities contribute to producing cutting-edge research and developing leaders who have the necessary skills to shape the future through strong analytical skills and decision-making abilities. In addition, lifelong learning opportunities, including reskilling and upskilling programs, are essential for maintaining adaptability amid technological disruption. Moreover, equitable access to education promotes social mobility and inclusivity.
The talent pool of an economy underlines the quality of its output and its competitiveness potential. Though some talent can be attracted from abroad through channels such as high income, a good quality of life, or low personal income taxes, talent is predominantly fostered domestically through education. Investment in education and ensuring a coherent, flexible, and adaptive educational system are therefore crucial in remaining competitive in the long run. However, investing in education is not always a political priority. In cases in which it is, it has one major pitfall: the impact of increasing investment in education takes time. Indeed, research shows that improvements in education systems and curricula can take up to a generation to reap their full benefits.
Income inequality measures how unevenly income is distributed within a population. High levels of income inequality can affect competitiveness by wearing down social cohesion and creating barriers to economic participation for large segments of the population. Specifically, societies with significant income disparities often experience reduced social mobility, lower levels of education and health among disadvantaged groups, and increased social tensions. Such conditions can lead to underutilization of human capital and reduced consumer demand, both of which are detrimental to economic growth. Measures of income inequality, such as the Gini coefficient, are therefore crucial in offering a more balanced view than other economic metrics, such as GDP per capita, where values are averaged without taking into consideration the spread or distribution of the wealth created.
This annex explored some of the fundamental factors that actively determine the general level of competitiveness of economies. In doing so, it provided insights into the mechanisms that underpin the process of achieving greater levels of prosperity.
This is by no means an exhaustive list of competitiveness-related terms. The WCC believes that competitiveness is a non-linear concept, and that economies achieve higher levels of competitiveness and overall prosperity through different means and adopt very different paths.
Given the transformative and ever-increasing role of technologies in our societies, as well as the inherent geopolitical and geographic differences that exist between countries and regions, it is important to recognize that assessing the prosperity of various economies around the globe must factor in regional considerations and particularities.
In this report, we therefore explore some of the specificities and limitations that apply to the African continent when attempting to measure its competitiveness. Currently, the IMD World Competitiveness Ranking includes just six African economies out of the 69 analyzed: Botswana, Ghana, Kenya, Namibia, Nigeria, and South Africa. This limited representation highlights the need for more comprehensive data and broader inclusion to provide a more complete picture of global competitiveness. In the hope of expanding our analysis in the future and having a sample that is more representative of global actors, we offer a nuanced understanding of additional factors that may have an impact on the prosperity, and thus competitiveness, of the continent.
Managerial dynamics
Algerian Dinar
Offical language(s): Arabic; Standard Algerian Berber
System of government: presidential republic
Aid value (millions US$): 187.23
Coups, attempts since independence: 4
Kwanza
Offical language(s): Angolan Portuguese System of government: presidential republic
Coups, attempts since independence: 1
CFA Franc BCEAO Offical language(s): French
Offical language(s): English
Currency: CFA Franc BCEAO
Offical language(s): Bissa; Dyula; Fula System of government: presidential republic
Coups, attempts since independence: 7
Leaders:
Capital: Gitega
Burundi Franc
Offical language(s): Belgian French; English; Swahili; Kirundi
System of government: presidential republic
value (millions US$): 591.56
Coups, attempts since independence: 14
Cabo Verde Escudo
Offical language(s): Cape Verdean Portuguese System of government: parliamentary republic
value (millions US$): 95.88
Coups, attempts since independence: 0
CFA Franc BEAC
Offical language(s): English; French System of government: presidential republic
value (millions US$): 892.16
Coups, attempts since independence: 1
CFA Franc BEAC
Offical language(s): French
of government: presidential republic
(millions US$):
Coups, attempts since independence: 7
Capital: N'Djamena
Population (millions): 17.7
Currency: CFA Franc BEAC
Offical language(s): Arabic; French
System of government: presidential republic
Aid value (millions US$): 1082.02
Coups, attempts since independence: 7
Leaders:
Capital: Moroni, Comoros
Population (millions): 0.8
Currency: Comoro Franc
Offical language(s): Arabic; Comorian; French
System of government: federal presidential republic
Aid value (millions US$): 158.14
Coups, attempts since independence: 9
Armed forces:Leaders:
Capital: Kinshasa
Currency: Congolese Franc
Offical language(s): French
System of government: semi-presidential republic
Aid value (millions US$): 4167.03
Coups, attempts since independence: 5
CFA Franc BEAC
Offical language(s): French
of government: presidential republic
(millions US$): 357.53
Coups, attempts since independence: 7
CFA Franc BCEAO
Offical language(s): French
Coups, attempts since independence: 4
Capital: Djibouti City
Currency: Djibouti Franc
Offical language(s): Arabic; French
System of government: presidential republic
Aid value (millions US$): 214.65
Coups, attempts since independence: 1 Armed forces: 13,000
Leaders:
Offical language(s): Arabic
System of government: presidential republic Aid value (millions US$): 478.79
Coups, attempts since independence: 3
CFA Franc BEAC
Offical language(s): Portuguese; Equatoguinean Spanish; French
Nakfa
Offical language(s): Arabic; English; Tigrinya System of government: presidential republic
value (millions US$): 121.99
Coups, attempts since independence: 0
Lilangeni
Offical language(s): Swazi; English
System of government: absolute monarchy Aid value (millions US$): 105.57
Coups, attempts since independence: 1 Armed forces:Leaders:
Capital: Addis Ababa
Currency: Ethiopian Birr
Offical language(s): Multiple
System of government: federal parliamentary republic Aid value (millions US$): 5185.7
Coups, attempts since independence: 4
Leaders:
CFA Franc BEAC Offical language(s): French
Dalasi Offical language(s): English
Offical language(s):
of government: presidential republic
value (millions US$):
CFA Franc BCEAO
Offical language(s): Portuguese
System of government: semi-presidential republic
value (millions US$): 178.66
Coups, attempts since independence: 9
Managerial dynamics
Societal empowerment
Kenyan Shilling
Offical language(s): English; Swahili
System of government: presidential republic
value (millions US$): 2493.48
Coups, attempts since independence: 1
Loti
Offical language(s): English; Sotho
System of government: parliamentary constitutional monarchy
value (millions US$): 165.15
Coups, attempts since independence: 4
Offical language(s): English
Capital: Tripoli, Libya
Libyan Dinar
Offical language(s): Arabic
System of government: in transition Aid value (millions US$): 339.28
Coups, attempts since independence: 5
Leaders:
Malagasy Ariary
Offical language(s): Malagasy; French
Managerial dynamics
Societal empowerment
Coups, attempts since independence: 5
Managerial dynamics
Societal empowerment
Kwacha
Offical language(s): English System of government: presidential republic
value (millions US$): 1668.96
Coups, attempts since independence: 0
Offical language(s): Multiple
System of government: semi-presidential republic
value (millions US$): 1237.89
Coups, attempts since independence: 8
Mauritius Rupee
Offical language(s): De facto; English; De jure; French System of government: parliamentary republic
value (millions US$): 88.09
Coups, attempts since independence: 0
Managerial dynamics
Societal empowerment
Moroccan Dirham
Offical language(s): Arabic; Amazigh
System of government: parliamentary constitutional monarchy Aid value (millions US$): 716.57
Coups, attempts since independence: 2
Capital: Maputo
Currency: Mozambique Metical
Offical language(s): Portuguese
System of government: presidential republic
(millions US$): 2824.4
Coups, attempts since independence: 1
Leaders:
language(s): English
Capital: Niamey
CFA Franc BCEAO
Offical language(s): French System of government: formerly, semi-presidential republic; military junta
value (millions US$): 1221.55
Coups, attempts since independence: 6
Leaders:
Offical language(s): English System of government: federal presidential republic
(millions US$): 3444.65
Coups, attempts since independence: 9
Capital: Kigali
Rwanda Franc
Offical language(s): French; Kinyarwanda; English; Swahili
System of government: presidential republic
value (millions US$): 1324.08
Coups, attempts since independence: 2
Leaders:
Capital: São Tomé
Population (millions): 0.2
Currency: Dobra
Offical language(s): Portuguese
System of government: semi-presidential republic Aid value (millions US$): 81.86
Coups, attempts since independence: 2
forces: 1,000
Leaders:
CFA Franc BCEAO
Offical language(s): Pulaar; Wolof; French
of government: presidential republic
value (millions US$): 1769.61
Coups, attempts since independence: 1
Capital: Victoria, Seychelles
Population (millions): 0.1
Currency: Seychelles Rupee
Offical language(s): Seychellois Creole; English; French
System of government: presidential republic
Aid value (millions US$): -
Coups, attempts since independence: 3
Armed forces: -
Leaders:
language(s): English
Capital: Mogadishu
Population (millions): 17.6
Currency: Somali Shilling
Offical language(s): Arabic; Somali
System of government: federal parliamentary republic
Aid value (millions US$): 2198.54
Coups, attempts since independence: 3
Armed forces: 20,000
Leaders:
Offical language(s): Multiple; English System of government: parliamentary republic Aid value (millions US$): 1430.86
Coups, attempts since independence: 0
South Sudanese Pound
Offical language(s): English
System of government: presidential republic Aid value (millions US$): 1737.73
Coups, attempts since independence: 1
Leaders:
Sudanese Pound
Offical language(s): Arabic; English
System of government: presidential republic
Aid value (millions US$): 1339.98
Coups, attempts since independence: 15 Armed forces: 124,000
Leaders:
Managerial dynamics
Societal empowerment
Tanzanian Shilling
Offical language(s): English; Swahili System of government: presidential republic
Coups, attempts since independence: 0
CFA Franc BCEAO
language(s): French
Tunisian Dinar
Offical language(s): Arabic
System of government: parliamentary republic Aid value (millions US$): 1170.86
Coups, attempts since independence: 1
Capital: Kampala
Currency: Uganda Shilling
Offical language(s): English; Swahili
System of government: presidential republic Aid value (millions US$): 2172.12
Coups, attempts since independence: 6
Zambian Kwacha
Offical language(s): English System of government: presidential republic Aid value (millions US$): 1363.19
Coups, attempts since independence: 3
Leaders:
Offical language(s): Multiple and English
Mauritius
Seychelles
Benin
Mozambique
Senegal
Côte d'Ivoire
Egypt, Arab Rep.
Equatorial
Guinea
Ethiopia
Madagascar
Morocco
Niger
Tanzania
Togo
Congo, Rep.
Gambia, The
Ghana
Kenya
Liberia
Libya
Namibia
Sierra Leone
Tunisia
Uganda
Algeria
Cameroon
Chad
Congo, Dem. Rep.
Djibouti
Eritrea
Gabon
Mauritania
Nigeria
Sao Tome and Principe
South Africa
Cabo
Verde
Lesotho
Malawi
Rwanda
Zambia
Angola
Botswana
Burkina Faso
Central African
Burundi
Republic
Comoros
Eswatini
Guinea
Guinea-Bissau
Mali
Somalia
South
Sudan
Sudan
Zimbabwe
Botswana
Mauritius
Cabo
Verde
Lesotho
Namibia
Seychelles
South
Africa
Benin
Gambia, The Ghana
Kenya
Liberia
Madagascar
Malawi
Sao Tome and Principe
Sierra
Leone
Tanzania
Angola
Comoros
Côte d'Ivoire
Djibouti
Eswatini
Mauritania
Rwanda
Senegal
Tunisia
Zambia
Ethiopia
Guinea-Bissau
Morocco
Mozambique
Niger
Nigeria
Somalia
Zimbabwe
Burkina Faso
Burundi
Cameroon
Central African
Republic
Congo, Dem. Rep.
Equatorial
Guinea
Eritrea
Gabon
Guinea
Libya
Togo
Uganda
Congo, Rep.
Egypt, Arab Rep.
South
Mali
Sudan
Algeria
Chad
Sudan
South
Botswana
Cabo Verde
Egypt, Arab Rep.
Eswatini
Kenya
Libya
Mauritius
Cameroon
Congo, Rep.
Gabon
Namibia
Nigeria
Rwanda
Seychelles
Angola
Lesotho
Morocco
Sao Tome and Principe
South
Tunisia
Zimbabwe
Algeria
Central
Côte d'Ivoire
Eritrea
Liberia Mali
Niger
Senegal
Uganda
Burundi
Chad
Gambia, The Guinea-Bissau
Madagascar
Malawi
Tanzania
Togo
Benin
Comoros
Congo, Dem. Rep.
Djibouti
Guinea
Mozambique
Sierra Leone
Somalia
Sudan
Zambia
Mauritania
Benin
Burkina Faso
Burundi
Cabo Verde
Cameroon
Central African Republic
Chad
Comoros
Congo, Dem. Rep.
Congo, Rep.
Djibouti
Equatorial Guinea
Eritrea
Eswatini
Ethiopia
Gabon
Gambia, The
Guinea
Guinea-Bissau
Lesotho
Burkina Faso
Burundi
Cabo Verde
Cameroon
Central African Republic
Chad
Comoros
Congo, Dem. Rep.
Congo, Rep.
Djibouti
Equatorial
Eritrea
Eswatini
Gabon
Guinea-Bissau
Lesotho
Malawi
Mauritania
Mozambique
Sao Tome and Principe
Sierra Leone
Somalia
Togo
Uganda
Cabo Verde
Egypt, Arab Rep.
Mauritius
Morocco
Seychelles
Tunisia
Algeria
Gabon
Ghana
Libya
South
Africa
Botswana
Equatorial
Guinea
Kenya
Namibia
Sao Tome and Principe
Senegal
Comoros
Eswatini
Ethiopia
Madagascar
Mauritania
Rwanda
Sierra
Leone
Tanzania
Uganda
Angola
Burundi
Cameroon
Côte d'Ivoire
Djibouti
Eritrea
Lesotho
Sudan
Togo
Zambia
Zimbabwe
Benin
Congo, Rep.
Gambia, The Guinea-Bissau
Liberia
Mali
Burkina Faso
Congo, Dem. Rep.
Guinea
Malawi
Mozambique
Central African
Nigeria
Republic
Chad
Niger
Somalia
South
Sudan
Benin
Burkina Faso
- Central African Republic
Chad
Comoros
- Congo, Dem. Rep.
Congo, Rep.
Côte d'Ivoire
Djibouti
Equatorial Guinea
Eritrea
Ethiopia
Gabon
Gambia, The
Guinea
Lesotho
Liberia
Libya
Madagascar
Malawi
Mali
Mozambique
Niger
1.01 Gross fixed capital formation, Percentage of GDP
OECD Main Economic Indicators - complete database
Provisional data or estimates for most recent year.
1.02 Economic complexity index, Measures knowledge intensity, by considering exports
The Observatory of Economic Complexity
The Economic Complexity Index (ECI) is a holistic measure of the productive capabilities of large economic systems, usually cities, regions, or countries. In particular, the ECI looks to explain the knowledge accumulated in a population and that is expressed in the economic activities present in a city, country, or region. To achieve this goal, the ECI defines the knowledge available in a location, as the average knowledge of the activities present in it, and the knowledge of a an activity as the average knowledge of the places where that economic activity is conducted.
1.03 Real GDP growth, Percentage change, based on national currency in constant prices
IMF World Economic Outlook
Provisional data or estimates for most recent year.
1.04 GDP (PPP) per capita, Estimates, US$ per capita at purchasing power parity
IMF World Economic Outlook
Data for the most recent year are estimates.
Purchasing Power Parities (PPP) are the currency exchange rates that equalize the purchasing power of different currencies. This means that a given sum of money, when converted into different currencies, at the PPP rates, will buy the same basket of goods and services in all countries. PPPs are the rates of currency conversion, which eliminate the differences in price levels among countries.
1.05 Current account balance, Percentage of GDP
IMF World Economic Outlook
Current account equals the trade balance plus the balance of other goods, services, and income, private unrequited transfers, and official unrequited transfers not included elsewhere.
1.06 Exports of goods, Percentage of GDP World Trade Organization
Estimates based on preliminary data for the most recent year.
1.07 Exports of commercial services, Percentage of GDP World Trade Organization
Commercial services include transportation, travel, other private services and income. Estimates based on preliminary data for the most recent year. Data are not always fully comparable across countries. Due to frequent revisions to the services data, there are numerous breaks in the continuity of the data series
1.08 Export concentration by partner, Exports to top 5 countries, percentage of total exports UNCTAD
Top five named export countries as a percentage of total exports.
1.09 Export concentration by product, Top 5 products, percentage of total exports UNCTAD
Top five named export products, as a percentage of total exports, using the UNCTAD product data based on the SITC commodity classification, Revision 3, at the two-digit level; giving 65 product catagories.
1.10 Trade to GDP ratio, (Exports + Imports) / GDP
World Trade Organization
Estimates based on preliminary data for the most recent year.
1.11 Tourism receipts, International tourism receipts as a percentage of GDP UN World Tourism Organization, Tourism Highlights & Key Tourism Statistics
Provisional data for the most recent year.
1.12
Direct investment flows abroad, Percentage of GDP UNCTAD
Provisional data for the most recent year.
1.13 Direct investment stocks abroad, Percentage of GDP UNCTAD
Estimates, sometime based on the adding of the flows to the stock of a previous year or by accumulating flows.
1.14 Direct investment flows inward, Percentage of GDP UNCTAD
Provisional data for the most recent year.
1.15 Direct investment stocks inward, Percentage of GDP UNCTAD
Estimates, sometime based on the adding of the flows to the stock of a previous year or by accumulating flows.
1.16 Employment, Percentage of population ILOSTAT
Data on employment are often estimates and provisional for the most recent year.
1.17 Unemployment rate, Percentage of labor force ILOSTAT
1.18 Youth unemployment, Percentage of youth labor force (under the age of 25) ILOSTAT
Unemployment of population under 25 years as a percentage of labor force of the same age category. Provisional data or estimates for the most recent year.
1.19 Consumer price inflation, Average annual rate
IMF World Economic Outlook
Harmonized inflation rates, year average.
1.20 Gasoline prices, Premium unleaded gasoline (95 Ron) US$ per litre
OECD Energy Prices and Taxes (International Energy Agency)
Prices refer to the simple average of the domestic monthly reference prices with tax for premium gasoline.
2.01 Government budget surplus-deficit, Percentage of GDP
IMF World Economic Outlook
Provisional data or estimates for the most recent year.
Net lending (+)/ borrowing (-) is calculated as revenue minus total expenditure. This is a core GFS balance that measures the extent to which general government is either putting financial resources at the disposal of other sectors in the economy and nonresidents (net lending), or utilizing the financial resources generated by other sectors and nonresidents (net borrowing). This balance may be viewed as an indicator of the financial impact of general government activity on the rest of the economy and nonresidents (GFSM 2001, paragraph 4.17). Note: Net lending (+)/borrowing (-) is also equal to net acquisition of financial assets minus net incurrence of liabilities.
2.02 Total general government debt, Percentage of GDP
IMF World Economic Outlook
Gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of SDRs, currency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable. Thus, all liabilities in the GFSM 2001 system are debt, except for equity and investment fund shares and financial derivatives and employee stock options. Debt can be valued at current market, nominal, or face values (GFSM 2001, paragraph 7.110).
2.03 Interest payment, Percentage of current revenue
IMF Government Finance Statistics
Current revenue covers all nonrepayable government receipts other than grants.
2.04 General government expenditure, Percentage of GDP
IMF World Economic Outlook
Total expenditure consists of total expense and the net acquisition of nonfinancial assets.
2.05 Collected total tax revenues, Percentage of GDP
IMF Government Finance Statistics
Total tax revenues of general government. This includes: income taxes, profits and capital gains; social security contributions; taxes on payroll and workforce; taxes on property; taxes on goods and services; other taxes. General government consists of supra-national authorities, the central administration and the agencies whose operations are under its effective control, state and local governments and their administrations, social security schemes and autonomous government entities, excluding public enterprises.
2.06 Corporate tax rate on profit, Maximum tax rate, calculated on profit before tax
PricewaterhouseCoopers, “Resource Tax Manager”
Rates in effect on January 1, when available. For better comparability between countries, we show the maximum tax rates. But average effective corporate tax rates are often lower.
2.07 Consumption tax rate, Standard rate of VAT/GST
OECD Consumption Tax Trends
Value Added Tax (VAT)/Goods and Services Tax (GST) to international services and intangibles transactions.
2.08 Employer social security tax rate, %
KPMG
2.09 Employee social security tax rate, % KPMG
2.10 Rule of Law Index
World Governance Indicators (World Bank)
The World Bank rule of law Index uses multiple sources to capture perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.
2.11 Sustainable Development Goals, Country performance on the 17 SDGs
Sustainable Development Report
The Sustainable Development Report presents an updated SDG Index and Dashboards with a refined assessment of countries’ distance to SDG targets.
2.12 Democracy Index, EIU Overall Democracy Index, © The Economist Intelligence Unit Limited © The Economist Intelligence Unit Limited
The Economist Intelligence Unit’s index is based on the view that measures of democracy which reflect the state of political freedoms and civil liberties are not thick enough. They do not encompass sufficiently, or, in some cases, at all, the features that determine how substantive democracy is. Freedom is an essential component of democracy, but not, in itself, sufficient. In existing measures, the elements of political participation and functioning of government are taken into account only in a marginal and formal way. The Democracy Index is based on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. The five categories are interrelated and form a coherent conceptual whole. The condition of holding free and fair competitive elections, and satisfying related aspects of political freedom, is clearly the sine qua non of all definitions.
2.13 Tariff barriers, Tariffs on imports: Applied weighted mean tariff rate for all products World Development Indicators (World Bank)
Weighted mean applied tariff is the average of effectively applied rates weighted by the product import shares corresponding to each partner country.
2.14 Government subsidies, To private and public companies as a percentage of GDP IMF Government Finance Statistics
Grants on current account by the General Government to (i) public corporations (ii) private enterprises and (iii) other sectors, to compensate for losses which are clearly the consequence of the price policies of the public authorities.
2.15 Political terror scale, Index
Varieties of Democracy, Global State of Democracy dataset
Index 0-1. The level of political violence and terror. PTS scores based on information contained in the annual human rights reports produced by the US State Department.
2.16 Corruption, Average of indicators
Varieties of Democracy, Global State of Democracy dataset
Average of two 0-1 indicators. Executive bribery and corrupt exchanges; Public sector employees grant favours in exchange for bribes or other material inducements.
2.17 Corruption controls, Average of indicators
Varieties of Democracy, Global State of Democracy dataset
Average of three 0-1 indicators. The extent of institutionalized constraints on the decision-making powers of chief executives, whether individuals or collectivities; Officeholders who break the law and engage in corruption can do so without fear of legal consequences or adverse publicity; Safeguards against official corruption strong and effective.
2.18 Nepotism, Average of indicators
Varieties of Democracy, Global State of Democracy dataset
Average of three 0-1 indicators. The extent that prevailing modes of advancement give subordinates equal opportunities to become superordinates; Appointment decisions in the state administration based on personal and political connections, as opposed to skills and merit; Appointment decisions in the armed forces based on personal or political connections or alternatively based on skills and merit.
2.19 Military Expenditure, Percentages of GDP
Bayer, M., Croissant, A., Izadi, R., & Scheeder, N. (2023). Multidimensional Measures of Militarization (M3): A Global Dataset. Armed Forces & Society,
Measures the military expenditure of a state and its society against their economic performance (measured as the gross domestic product, GDP). Original data from Military Expenditure Database of the Stockholm Peace Research Institute SIPRI.
2.20 Military Expenditures in Relation to Health Spending, Ratio
Bayer, M., Croissant, A., Izadi, R., & Scheeder, N. (2023). Multidimensional Measures of Militarization (M3): A Global Dataset. Armed Forces & Society,
Assesses the policy priorities of political elites … measures the military expenditure of a state and its society against its health expenditure. Original data from Military Expenditure Database of the Stockholm Peace Research Institute SIPRI.
2.21 Militarism, Average of indicators
Bayer, M., Croissant, A., Izadi, R., & Scheeder, N. (2023). Multidimensional Measures of Militarization (M3): A Global Dataset. Armed Forces & Society,
Average of four 0-1 indicators. Measure if the military possesses significant political veto powers; Measure of military impunity; Measure of prevalence of military repression; Variable indicating military involvement into the economy of a country either through owning, controlling, or operating any kind of private or stateowned enterprise for the sake of generating profits.
3.01 Overall productivity (PPP), Estimates, GDP (PPP) per person employed, US$ © 2024 The Conference Board - Total Economy Database
Conference Board series for productivity. Data for most recent year are based on forecasts. Some figures for earlier years also rely on estimates by The Conference Board.
3.02 Overall productivity (PPP) - real growth, Estimates, Percentage change of GDP (PPP) per person employed
© 2024 The Conference Board - Total Economy Database
Conference Board series for productivity. Data for most recent year are based on forecasts. Some figures for earlier years also rely on estimates by The Conference Board.
3.03 Working hours, Average number of working hours per year © 2024 The Conference Board - Total Economy Database
Estimates.
3.04 Labor force, Employed and registered unemployed (millions)
OECD Main Economic Indicators - complete database
Estimates for the most recent year.
3.05 Labor force, Percentage of population
OECD Main Economic Indicators - complete database
Estimates for the most recent year.
3.06 Female labor force, Percentage of total labor force
OECD Main Economic Indicators - complete database
Estimates for the most recent year.
3.07 Foreign labor force, Migrant stock, age 20-64, % of population
United Nations Department of Economic and Social Affairs, Population Division
The share of foreign or foreign-born workers in a country’s labor force.
3.08 Access to financial services, Proportion of adults with a bank account or mobile-moneyservice provider
World Development Indicators (UN SDG Indicators Database - World Bank Global Financial Inclusion Database)
Proportion of adults (15 years and older) with an account at a financial institution or mobile-money-service provider (% of adults aged 15 years and older.
3.09 Access to financial services - gender ratio, Ratio of the female and male access to a bank account or mobile-money-service provider
World Development Indicators (UN SDG Indicators Database - World Bank Global Financial Inclusion Database)
Proportion of adults (15 years and older) with an account at a financial institution or mobile-money-service provider (% of adults aged 15 years and older. Expressed as a ratio: males minus females.
3.10 Stock market capitalization, Percentage of GDP
Passport, Source: © Euromonitor International
World Development Indicators (World Bank)
3.12 Women in management, Female share of senior and middle management (% of management)
World Development Indicators (World Bank)
The proportion of females in total employment in senior and middle management. It corresponds to major group 1 in both ISCO-08 and ISCO-88 minus category 14 in ISCO-08 (hospitality, retail and other services managers) and minus category 13 in ISCO-88 (general managers), since these comprise mainly managers of small enterprises.
3.13 New business density, Registered new businesses per 1’000 people aged 15-64
World Development Indicators (World Bank) - Entrepreneurship Survey and Database
New businesses registered are the number of new limited liability corporations registered in the calendar year. New business density is calculated by new registrations per 1,000 people ages 15-64.
3.14 High-tech exports, Percentage of manufactured exports
World Development Indicators (World Bank)
High-technology exports are products with high R&D intensity, such as in aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery.
3.15 ICT service exports, Percentage of service exports
World Development Indicators (World Bank)
ICT service exports (% of service exports). Information and communication technology service exports include computer and communications services (telecommunications and postal and courier services) and information services (computer data and news-related service transactions).
3.16 Total expenditure on R&D, Percentage of GDP
UNESCO
National estimates, projections or provisional data for the most recent year.
3.17 Scientific articles, Scientific articles published by origin of author
National Science Foundation Science & Engineering Indicators
Article counts are from a selection of journals, books, and conference proceedings in S&E from Scopus. Articles are classified by their year of publication and are assigned to a region/country/economy on the basis of the institutional address(es) listed in the article. Articles are credited on a fractional-count basis. The sum of the countries/economies may not add to the world total because of rounding. Some publications have incomplete address information for coauthored publications in the Scopus database. The unassigned category count is the sum of fractional counts for publications that cannot be assigned to a country or economy.
3.18 Patent applications per capita, Number of applications filed by applicant’s origin, per 100,000 inhabitants
WIPO Statistics Database
Total patent applications (Direct and PCT national phase entries) per 100’000 inhabitants, by applicant’s origin. Counts are based on the patent filing date. Country of origin refers to the country of residency of the first-named applicant in the application.
4.01
Arable area, Square meters per capita
FAO - Food and Agriculture Organization of the United Nations
Including arable and permanent cropland.
4.02 Secure internet servers, publicly-trusted TLS/SSL certificates, Netcraft Secure Server Survey.
Netcraft (http://www.netcraft.com/) and World Bank population estimates.
4.03 Internet users, Number of internet users per 1000 people
World Development Indicators (World Bank)
4.04 Internet bandwidth speed, Average speed M-Labs / cable.co.uk Ookla Bandwidth Place
Average connection speed in Mbps: data transfer rates for Internet access by end-users. Values presented are an average compiled from three different sources: M-Labs / cable.co.uk; Ookla; and Bandwith Place.
4.05 Life expectancy at birth, Average estimate
UNDP Human Development Report 2024
4.06 Human development index, Combines economic - social - educational indicators/ Source: Human Development Report
UNDP Human Development Report
HDI examines three basic dimensions to measure a country’s growth and achievements in human development. The first of these is health for the country’s people. This is measured by life expectancy at birth and those with higher life expectancies rank higher than those with lower life expectancies. The second dimension measured in the HDI is a country’s overall knowledge level as measured by the adult literacy rate combined with the gross enrollment ratios of students in primary school through the university level. The third and final dimension in the HDI is a country’s standard of living. Those with higher standards of living rank higher than those with lower standards of living. This dimension is measured with the gross domestic product per capita in purchasing power parity terms, based on United States dollars. The human development index values were calculated by the UNDP using a consistent methodology and data series; they are not strictly comparable with those published in earlier Human Development Reports.
4.07 Exposure to particle pollution, Mean population exposure to PM2.5, Micrograms per cubic meter
OECD “Green growth indicators”, OECD Environment Statistics (database)
Particle pollution, also called particulate matter or PM, is a mixture of solids and liquid droplets floating in the air. Some particles are released directly from a specific source, while others form in complicated chemical reactions in the atmosphere. Particles less than 10 micrometers in diameter pose the greatest problems, because they can get deep into lungs and even the bloodstream.
4.08 Total public expenditure on education, Percentage of GDP
World Bank
Total general (local, regional and central) government expenditure in educational institutions (current and capital). It excludes transfers to private entities such as subsidies to households and students, but includes expenditure funded by transfers from international sources to government. It includes preprimary, primary, secondary all levels and tertiary public institutions.
4.09 Pupil-teacher ratio (primary education), Ratio of students to teaching staff
UNESCO
For public and private institutions, based on full-time equivalent. Primary education (ISCED level 1): level of which the main function is to provide the basic elements of education at such establishments as elementary schools, primary schools. The ratio of students to teaching staff is calculated as the total number of full-time equivalent students divided by the total number of full-time equivalent educational personal. Teaching staff refers to professional personnel directly involved in teaching students. The classification includes classroom teachers; special education teacher; and other teachers who work with students as a whole class in a classroom, in small groups in a resource room, or in one-to-one teaching inside a regular classroom. Teaching staff also includes chairpersons of departments whose duties include some amount of teaching, but it does not include non-professional personnel who support teachers in providing instructions to students, such as teacher’s aides and other paraprofessional personnel.
4.10 Pupil-teacher ratio (secondary education), Ratio of students to teaching staff
UNESCO
For public and private institutions, based on full-time equivalent. Secondary education (ISCED levels 2 and 3): level providing general and/or specialized instruction at middle schools, secondary schools, high schools, teacher training schools and schools of a vocational or technical nature. The ratio of students to teaching staff is calculated as the total number of full-time equivalent students divided by the total number of full-time equivalent educational personal. Teaching staff refers to professional personnel directly involved in teaching students. The classification includes classroom teachers; special education teacher; and other teachers who work with students as a whole class in a classroom, in small groups in a resource room, or in one-to-one teaching inside a regular classroom. Teaching staff also includes chairpersons of departments whose duties include some amount of teaching, but it does not include nonprofessional personnel who support teachers in providing instructions to students, such as teacher’s aides and other paraprofessional personnel.
4.11 Secondary school enrollment, Percentage of relevant age group receiving full-time education
UNESCO
Net enrollment ratio, all programs, is the number of children of official school age (as defined by the education system) enrolled in secondary school, expressed as a percentage of the number of children of official school age for those levels in the population. Enrollment data are based on annual enrollment surveys, typically conducted at the beginning of the school year. They do not reflect actual attendance or dropout rates during the school year. Problems affecting cross-country comparisons of enrollment data stem from inadvertent or deliberate misreporting of age, and from errors in estimates of school-age populations. Average of lower and upper secondary.
4.12 Illiteracy, Adult (over 15 years), Illiteracy rate as a percentage of population
UNESCO
Estimates. Rounded up to 1 for all countries that are below 1%.
4.13 Youth exclusion, Share of youth population (15-24) not in education, employment or training ILOSTAT
Share of youth not in education, employment or training (NEET) is the proportion of young people who are not in education, employment, or training to the population of the corresponding age group: youth (ages 15 to 24)
4.14 Homicide, Intentional homicide, Rate per 100’000 population
UNODC
Intentional homicide: Unlawful death inflicted upon a person with the intent to cause death or serious injury.
Inclusions: Murder; honour killing; serious assault leading to death; death as a result of terrorist activities; dowry-related killings; femicide; infanticide; voluntary manslaughter; extrajudicial killings; killings caused by excessive use of force by law enforcement/state officials.
Exclusions: Death due to legal interventions; justifiable homicide in self-defence; attempted intentional homicide; homicide without the element of intent; non-negligent or involuntary manslaughter; assisting suicide or instigating suicide; illegal feticide; euthanasia.
4.15 Gini coefficient, Equal distribution of income scale: 0 (absolute equality) to 100 (absolute inequality)
UNDP Human Development Report
Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. A value of 0 represents absolute equality, a value of 100 absolute inequality.
4.16 Females in parliament, Percentage of total seats in Parliament
World Development Indicators (World Bank)
National sources
Share of seats in national parliament: Proportion of seats held by women in a lower/ single house or /and an upper house/ senate expressed as percentage of total seats. For countries with bicameral legislative systems, the share of seats is calculated based on both houses. China Hong Kong: percentage of Executive Council seats hold by women.
4.17 Gender inequality, Gender Inequality Index (UNDP)
UNDP Human Development Report
A composite measure reflecting inequality in achievement between women and men in three dimensions: reproductive health, empowerment and the labour market. Hong Kong: local calculation based on UNDP methodology.
4.18 Freedom of the press, Reporters Without Borders: World Press Freedom Score
Reporters Without Borders
The degree of freedom available to journalists in 180 countries is determined by pooling the responses of experts to a questionnaire devised by RSF. This qualitative analysis is combined with quantitative data on abuses and acts of violence against journalists during the period evaluated. The criteria evaluated in the questionnaire are pluralism, media independence, media environment and self-censorship, legislative framework, transparency, and the quality of the infrastructure that supports the production of news and information.
4.19 Inequality in life expectancy, Index
UNDP Human Development Report
Inequality in life expectancy is defined as inequality in the distribution of expected span of life-based on data from survival tables estimated using the Atkinson inequality index.
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