For Immediate Release
Contacts: Jim Weidman, (202) 675-1761, jim.weidman@heritage.org
Kate Dobbin, +44 207 573 4016, kate.dobbin@dowjones.com
INDEX: SUB-SAHARAN AFRICA FINISHES AS WORLD’S SECOND-MOST IMPROVED REGION
WASHINGTON, JAN. 14, 2014—Sub-Saharan Africa’s level of economic freedom remains weaker than that any other region, but it gained enough ground last year to emerge as the second most-improved region in the world, according to the 2014 Index of Economic Freedom, published annually by The Wall Street Journal and The Heritage Foundation.
“No other region has made greater strides in economic freedom than Sub-Saharan Africa over the past three years,” write the editors.
Its competitiveness has improved in several specific areas, with many countries implementing more sustainable fiscal policies, better managed inflation, and more efficient markets. Yet the region continues to lag the rest of the world in economic freedom.
Launched in 1995, the Index evaluates countries in four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on an aggregate score, each of 178 countries graded in the 2014 Index is classified as “free” (i.e. combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
Mauritius remains the only one of 48 countries in Sub-Saharan Africa to rank among the 10 freest economies in the world. “Efficient and transparent regulations underpin a dynamic entrepreneurial environment and support diversified economic development,” the editors write. However, its score of 76.5 is four-tenths of a point lower than last year.
Second-place Botswana picked up 1.4 points for an overall score of 72.0. Cape Verde replaced Rwanda in third place regionally with an impressive increase of 2.4 points.
“Reforms in these countries have supported economic expansion and a gradual reduction in poverty,” the editors write. “The positive economic results achieved through advancing economic freedom have created valuable momentum for additional institutional reforms that are needed to ensure long-term economic development.”
Sub-Saharan Africa still has a long way to go. Economic freedom in the region’s largest economy, South Africa, has declined over the past decade, dimming hopes for a more prosperous and stable future on the African continent’s southern tip.
Of the region’s 46 countries, 11 are rated in the lowest category—“repressed”-- and 26 are in the next lowest—“mostly unfree.” Eight of the world’s 20 least-free economies hail from this region.
Yet even among the poorest performers, there is room for optimism. Zimbabwe is ranked second-worst in the world in economic freedom, but it posted an increase of 6.9 points, making it the most improved. Liberia and Sierra Leone, meanwhile, posted gains of 3.1 points and 2.2 points respectively, lifting both into the “mostly unfree” category.
The world average score of 60.3—seven-tenths of a point above the 2013 average—is the highest average in the two-decade history of the Index, the editors note. Forty-three countries, including Singapore and Sweden, achieved their highest scores yet in the 2014 Index. Among the 178 countries ranked, scores improved for 114 countries and declined for 59. Four recorded no score change.
The 2014 Index was edited by Ambassador Terry Miller, director of Heritage’s Center for International Trade and Economics; Anthony B. Kim, senior policy analyst in the Center for International Trade and Economics; and Kim Holmes, Ph.D., Heritage’s Distinguished Fellow. Copies of the Index (490 pages, $24.95) may be ordered online at www.heritage.org/index or by calling 1-800-975-8625. The full text, including charts and graphs, also is available online.
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