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January 10, 2013

Sub-Saharan Africa Improvement Stalls in Index of Economic Freedom

For Immediate Release
Contacts:
Jim Weidman, (202) 675-1761, jim.weidman@heritage.org
Kate Dobbin, +44 207 573 4016, kate.dobbin@dowjones.com

SUB-SAHARAN AFRICAN IMPROVEMENT STALLS IN INDEX OF ECONOMIC FREEDOM

But Botswana moves into “mostly free” category; Mauritius is in the top 10

WASHINGTON, JAN. 10, 2013—After two years of steady improvement, economic freedom in the countries of Sub-Saharan Africa has stalled, according to the latest scores from the 2013 Index of Economic Freedom, published annually by The Wall Street Journal and The Heritage Foundation.

The region’s overall level of economic freedom “remains weaker than that of any other ,” the Index editors write. A majority of countries in this region either fall into the Index’s “mostly unfree” or “repressed” categories. Indeed, 15 of the world’s 33 “repressed” economies are in Sub-Saharan Africa, and 22 are in the next lowest, “mostly unfree” category.

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 its aggregate score, each of 177 countries graded in the 2013 Index was 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 in the top 10 in annual worldwide rankings—the only one of 48 Sub-Saharan countries to do so. But while it is first for the region, its Index score declined slightly from last year. Second-place Botswana, meanwhile, moved from “moderately free” to “mostly free” by adding one full point to its score. At third place, Rwanda halted two consecutive years of progress by shaving eight-tenths of a point off its score.

Sub-Saharan Africa continues to lag far behind the five other regions of the world in overall economic freedom. It is dead last in seven of 10 measures of economic freedom and collectively scores about 13 points behind average world scores in business freedom and more than 10 points behind in property rights and freedom from corruption.

Burkina Faso slipped to “mostly unfree.” Sào Tomè & Prìncipe and Ethiopia are now considered “repressed.” But several countries showed improvement, with Zimbabwe reporting the best increase by moving up 2.3 points to 28.6. Benin and Seychelles, meanwhile, both added almost two full points to their Index scores; Gabon added 1.4. Yet all three remain mired in the “mostly unfree” category, which shows how far the region has to go.

The world average score of 59.6 was only one-tenth of a point above the 2012 average. Since reaching a global peak in 2008, the editors note, economic freedom has continued to stagnate. The overall trend for last year, however, was positive: Among the 177 countries ranked in the 2013 Index, scores improved for 91 countries and declined for 78.

On the plus side, average government spending scores improved. Unfortunately, this was matched by a decline in regulatory efficiency, as a number of countries hiked minimum wages and tightened control of labor markets.

The 2013 Index was edited by Ambassador Terry Miller, director of Heritage’s Center for International Trade and Economics; Kim Holmes, Ph.D., Heritage’s Distinguished Fellow; and Edwin J. Feulner, Ph.D., Heritage’s past president. Copies of the Index (494 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, is available online.


About The Wall Street Journal

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About The Heritage Foundation

The Heritage Foundation is the nation’s most broadly supported public policy research institute, with more than 710,000 individual, foundation and corporate donors. Founded in 1973, Heritage develops public policy solutions that advance free enterprise, limited government, individual freedom, traditional values and a strong national defense.

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