To promote development, states need the capacity to raise revenues and direct them into sound investments. They need to deliver public services effectively, efficiently and equitably, and to secure property rights and a predictable set of rules for the efficient operation of markets. States that fail to respond to the needs of their citizens or that succumb to conflict or instability can leave their populations trapped in poverty.

Over the past decade, Africa has experienced its most sustained period of economic growth since the 1960s, although this has yet to translate into major progress on poverty reduction.

While this growth has many causes, it could not have happened without substantial improvements in governance. Africa as a whole has shown dramatic improvement in macroeconomic management and in the quality of its business environment.

Although the challenges remain substantial, African countries are increasingly getting the basics right.

Yet when assessed across its many dimensions, governance in Africa presents a mixed picture. On aggregate measures such as the Worldwide Governance Indicators, Africa’s performance has improved slightly in recent years, and still lags behind that of Asia and other developing regions.

Many African countries have launched ambitious public financial management reforms. In most cases, however, progress has been patchy, with improvements in some areas undermined by status quo in others. Reforms to laws and procedures have not always translated into improved performance, with enforcement of national procurement laws a particular challenge. While the credibility of national budgets has been increasing, expenditure controls and internal audit remain relatively weak.

Independent audit institutions and parliamentary public accounts committees are, however, playing an increasingly important role.

African countries have enjoyed more success in improving their business environment, and have reaped significant returns in increased trade and investment. Many have set up ‘one-stop’ facilities to improve services for investors and streamline business licensing. The average cost and time involved in starting a new business has been reduced by almost half.

A number of countries, including Mauritius, South Africa, Rwanda, Botswana and Ghana, have made major progress on improving overall competitiveness. It is in the macroeconomic management arena that African countries have achieved their most important progress, with sound macroeconomic management, low budget deficits and realistic and stable exchange rates.

External account balances, budget deficits and government indebtedness have all fallen in recent years. These improvements in macroeconomic management helped to make African economies more resilient in the face of recent global economic turmoil.

On political governance, there is strong commitment at the continental level to promote democracy.

The African Union and New Partnership for Africa’s Development (NEPAD) have affirmed that political governance, peace and security, and development are interdependent. Democratic elections are increasingly the norm across Africa, with 17 presidential elections held in 2011.

A small but growing number of countries have now experienced peaceful transfers of power through the ballot box, including Senegal, Ghana, Benin, Cape Verde, Botswana, Mauritius, Tanzania and Zambia. Of the 19 African countries that have held at least two successive elections, 12 have shown positive signs of democratic consolidation, such as improvements in voter processes and participation rates.

However, it takes more than elections to produce democracy. Democratic norms are still weakly entrenched in many countries, and electoral violence remains a perennial risk. Despite some notable successes, overall measures of political voice and accountability, political participation and human rights have remained static in recent years.

State fragility remains a major constraint on Africa’s development.

Four out of every five fragile states around the world are found in Africa. Compared to the rest of the continent, they have 50% higher rates of malnutrition, 20% higher child mortality and 18% lower primary completion rates. Africa’s fragile states have yet to achieve even a single Millennium Development Goal.

Fighting corruption remains a critical challenge for Africa.

While there has been a slight overall improvement, average scores on Transparency International’s Corruption Perceptions Index indicate that corruption persists. While many African countries have ratified international conventions on fighting corruption, challenging reforms will be required to meet those commitments.

A key area is the management of natural resources. While Africa’s current natural resources boom offers a major opportunity to close the development gap, it also comes with risks. Mismanagement of natural resources can fuel corruption, drive conflict and distort patterns of development. It is therefore encouraging to see 18 African countries making good progress with the Extractive Industries Transparency Initiative.

As measured by the Worldwide Governance Indicators, Africa’s governance effectiveness has remained static over the past six years. With the help of development partners, there have been major improvements in the delivery of basic services across the continent, in many cases leading to dramatic increases in primary school enrolment rates and child vaccinations.

However, more widespread improvements in the quality of public administration will entail challenging reforms at the central and local government levels.