Comparing African Countries on Transformation
To compare African countries among themselves, we developed a subindex for each of the five main aspects of economic transformation and combined them to form an index, the African Transformation Index. Countries are compared for three-year periods centered on 2000 and 2010 (1999–2001 and 2009–11). The comparison is for Sub-Saharan Africa, but due to the lack of data, only 21 countries are represented. We plan in time to extend the index to all of Africa.
Indicators of transformation (DEPTH)
The five subindexes of economic outcomes that are considered to be key features that characterize a transformed economy and that are tracked by the ATI:
- Diversification of production and exports
- Export competitiveness
- Productivity increases
- Technology upgrading
- Human economic well-being
For fuller explanations of each, click above. The reasons behind the choice of these indicators are discussed in Chapter 1 of the report.
The Top Rankers
Putting together all of the elements of DEPTH, the African Transformation Index shows Mauritius, South Africa, Côte d’Ivoire, Senegal, Uganda, Kenya, and Gabon as the top seven countries on economic transformation in 2010 (see above). The middle seven are Cameroon, Madagascar, Botswana, Mozambique, Tanzania, Zambia, and Malawi. The least transformed are Benin, Ghana, Ethiopia, Rwanda, Nigeria, Burundi, and Burkina Faso. (click here to see individual country profiles)
The main surprises are Botswana, Ghana, and Nigeria. Botswana had a stellar record on GDP growth over 1970 to 2010, raising its per capita GDP to the second highest in Sub-Saharan Africa (after Gabon). But its economy is based primarily on the production and exports of raw diamonds—extractives—which we do not include in the measures of diversification and export competitiveness. The country has made efforts in recent years to diversify away from raw diamonds by moving into cutting and polishing, but the results have yet to register in the data. Meanwhile, the economy remains very weak in some of the key indicators of transformation. For example, the share of manufacturing in GDP is around 4 percent and cereal yield is about 375 kg per hectare, compared to over 11 percent and 900 kg per hectare respectively in Burkina Faso, the country at the bottom of the transformation rankings. Ghana’s poor showing in 2010 results mainly from a steady decline in manufacturing production, export diversification, and export competitiveness over the decade. It also relies significantly on unprocessed mineral exports (gold and bauxite). Nigeria’s poor showing also reflects its extreme dependence on producing and exporting extractives.
Uganda, Mozambique, and Rwanda made the most progress on transformation; each country improved its rankings by three places or more. Kenya, Madagascar, Malawi, Côte d’Ivoire, Tanzania, and Ethiopia improved their rankings by one or two positions. The worst deterioration occurred in Ghana and Botswana. Ghana fell seven places, and Botswana five places, between 2000 and 2010 due to the factors mentioned above. Burkina Faso, Cameroon, Senegal, and Zambia also dropped in rankings.