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AfricaMoney | August 24, 2017

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Mauritius ranks 1st in Sub-Saharan Africa & 10th globally on Economic Freedom

Mauritius ranks 1st in Sub-Saharan Africa & 10th globally on Economic Freedom

Mauritius has scored well above regional and global averages, making its economy first in the region and the 10th freest globally in the 21st edition of the Index of Economic Freedom. (Image: Mauriclick)

Mauritius was ranked 1st out of 46 countries in the Sub-Saharan African region, scoring well above regional and global averages, making its economy the 10th freest in the 21st edition of the Index of Economic Freedom.

Mauritius overall score has been essentially unchanged from last year’s, with a marginal negative score change of 0.1 points reflecting a significant decline in labor freedom that overshadows gains in control over government spending, business freedom, and monetary freedom.

Under the pillar of Regulatory Efficiency, the Business Freedom sub-pillar score increased to 78.0, Labor Freedom decreased to hit 68.2 and Monetary Freedom increased to 77.6; Open market and Trade Freedom parameter score dipped to 88.4, while Investment Freedom and Financial Freedom remained stable at 85.0 and 70.0 respectively.

Furthermore, under Rule of Law, the sub-parameter of Property Rights was steady at 65.0 whereas Freedom from Corruption decreased to reach 52.0.
Finally, under Limited Government, Government Spending increased to 87.4 whereas fiscal freedom has decreased to hit 91.9 points.

The main reason for the stable score is the government’s adherence to a stable fiscal policy and the island economy’s openness to global trade and investment.

Moreover, Economic development in Mauritius has been facilitated by a stable macroeconomic environment, prudent policy decisions, and openness to competition.

Adoption of open-market policies has been accompanied by the development of growing financial and tourism sectors that have helped to supplant traditional subsistence agriculture.

The rule of law has been enforced effectively within a framework of transparency and accountability, although corruption remains a concern.

Moving on, at the regional level, Mauritius was followed by Botswana with an economic freedom score of 69.8, making its economy the 36th freest globally in the 2015 Index Economic Freedom.

Its overall score has deteriorated 2.2 points over last year, reflecting considerable decline in 5 of the 10 pillars of economic freedom, including trade freedom, the management of government spending, and investment freedom.

Next is Cabo Verde, which is ranked 3rd out of 46 countries in the Sub-Saharan Africa region and is globally the 60th freest in the 2015 Index.

Its overall score continues to be much higher than the global and regional averages and is 0.3 points better than last year due to advancements in monetary stability and the rule of law as measured by property rights and freedom from corruption.

Rwanda comes next with an economic freedom score is 64.8, making its economy the 65th freest in the 2015 Index and allowing it a rank of 4 out of 46 countries in the Sub-Saharan Africa region. Its score remains essentially the same as last year’s, with improvements in half of the 10 economic freedoms, including freedom from corruption and trade freedom, undermined by a significant decline in business freedom.

Ghana’s economic freedom score is 63.0, making its economy the 71st freest in the 2015 Index. Its overall score is 1.2 points lower than last year, with improvements in freedom from corruption and monetary freedom outweighed by declines in the management of government spending, investment freedom, and labor freedom. Ghana is ranked 5th out of 46 countries in the Sub-Saharan Africa region, and its overall score remains above the world average.

South Africa fails to make it to the top 5, but is ranked 6th out of 46 countries in Sub-Saharan Africa, with an overall score of 62.6 that is higher than global and regional averages, making its economy the 72nd freest in the 2015 Index Economic Freedom.

Its score is essentially unchanged from last year, with a 0.1-point gain reflecting improvements in labor freedom, fiscal freedom, trade freedom, and freedom from corruption that are largely offset by declines in investment freedom, business freedom, and the management of government spending

Rounding up the top 10 in Africa are Madagascar, Swaziland, Uganda and Namibia at 79th, 91st, 92nd and 93rd places respectively.

Finally, the global top 5 are Hong Kong, Singapore, New Zealand, Australia and Switzerland, in that order, and are the only countries which are rated as ‘free’, with a score ranging from 89.6 for the first to 80.5 for the fifth.

About Index of Economic Freedom:

The 21st edition of the Index of Economic Freedom evaluates economic conditions and government policies in 186 countries.

Since its inception in 1995, the Index, an annual cross-country analysis by The Heritage Foundation, in collaboration with The Wall Street Journal, has tracked the progress of economic freedom around the globe and measured the impact of advancing economic liberty.

Like its predecessors, the 2015 Index provides ample evidence of dynamic gains from greater economic freedom, both for individuals and for societies.

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