The global standards, for economic growth and stability are well defined by the Economic Freedom of the World report (EFW). This annual report is produced by the Fraser Institute. The second important measurement comes via the Rule of Law Index (RLI) compiled and ranked by the World Justice Project. There is a distinct correlation between the two measurements with the 15 highest ranked countries in the RLI, (countries that best respect the rule of law), all found within the top 25% ranked countries in the EFW.
In recent years, rule of law and democracy have both seen worrying regressions and as per the latest Rule of Law Index, 2023 was the sixth consecutive year in which more countries declined than improved in their rule of law performance.
History has shown that countries can only experience growth and progress where the rule of law and a dynamic market economy are maintained. In fact, there is no example where a country that has effected a clear policy of economic freedom and a solid and effective rule of law has failed.
This has been one of the fundamental challenges in Africa where examples such as Zimbabwe, Sudan, Burundi and others, have shown what catastrophic collapses can occur when these two principles are not established and protected.
In contrast the top 2024 EFW ranking African countries are Mauritius, Botswana and Cape Verde. Countries that are all seeing sustained positive economic growth, and are all ranked in the top 30% of the EFW world ranking, are all seeing above average growth and political stability and all have above average scores in economic freedom.
Here are the top African Countries ranked in order of total rating:
Data as provided by the Heritage Foundation
South Africa, in comparison has fallen steadily down the rankings, and came a lowly 18th in Africa and Its rating has decreased by 0.4 point from last year. The country’s economic freedom score is lower than the world average and is considered “mostly unfree” according to the 2024 Index.
South Africa’s slide in economic freedom that has accompanied a slide in economic growth Source: EFW
Economic freedom is the fundamental right of every human to control their labour and property and South Africa now ranks 111th out of 165 countries measured in the EFW and 56th out of 142 in the RLI.
Defining the rule of law
In a recent presentation, Martin van Staden, Head of Policy at the Free Market Foundation, defined the rule of law as “the legal institution that regulates or attempts to eliminate state arbitrariness”.
This principle, together with the principle of economic freedom, are core foundations that any country needs to adopt in order to create economic growth and stability and needs to be adopted widely in Africa to begin a growth cycle that will transform the continent.
With the depth of natural resources combined with a large, young workforce, there is no conceivable barrier to Africa becoming an economic powerhouse. It needs only to adopt business friendly policies and deliver freedom for its countless entrepreneurs to thrive in.
Africa has a population of over 1,5 billion people, and the highest young population percentage of any continent and, as a consequence, estimates show that the size of the total African economy could be triple what it is now. African countries need to look at the success achieved in South Korea and Taiwan as examples of how this can be achieved through ensuring a free market economy and proper rule of law.
