In the 2018 SEDA index of wellbeing, South Africa ranked 113th out of 152 countries – placing it in the third quartile of SEDA scores. Over the last decade, South Africa improved its scores across most dimensions, particularly infrastructure, education and environment. Compared to its selected peers, South Africa is making stronger progress across the Investments dimensions, but is lagging in relative progress in Economics. When compared to the rest of the world, South Africa underperforms in all dimensions except governance, and to a lesser degree economic stability and infrastructure.
South Africa’s wealth to well-being coefficient of 0.85 highlights the country’s below average ability of converting wealth-to-wellbeing.
African countries have shown improvements in key indicators over the past decade, particularly Morocco, Rwanda, Ethiopia and Kenya
Data collected over the last decade highlights a clear increase in global well-being post the financial crash, particularly in Africa, where many countries showed strong improvements in Infrastructure and Economic Stability.
Since 2012 The Boston Consulting Group (BCG) has used proprietary Sustainable Economic Development Assessment (SEDA), a comprehensive diagnostic tool, to produce a score that measures the relative well-being of countries and also relative scores for ten dimensions. The 2018 report, Striking a Balance Between Well-Being and Growth: The 2018 Sustainable Economic Development Assessment, reveals that countries which lead in generating well-being for their citizens tended to post faster economic growth over the past decade.
Whilst African countries on the whole have maintained their overall wellbeing rankings, many have made positive strides towards improvement. 26 out of 40 countries (65%) have enhanced their ability to transform wealth into wellbeing and nearly a quarter (9 of 40) are now above the world average ability to do so.
However, despite the encouraging rise, African countries still have much room for improvement as they display lower than average well-being levels, in particular in Sub-Saharan nations.
This is in large part to much lower than average income levels and so comes as no surprise, however there are several factors which should be focused on to help improve wealth to well-being conversion for citizens. The research identified that countries which saw the most progress over this period were particularly successful in improving education, infrastructure and overall governance.
“In Africa, as well as globally, we see that the same three dimensions pop up as differentiators for countries that have made the most progress,” said Joao Hrotko, a BCG Partner and report coauthor. “It is also interesting to note that despite infrastructure having improved in most countries in Africa, the dimension still stood out as a differentiator between most improved and least improved African nations.”
The research also found that digital technology has a positive and significant association with a country’s ability to convert wealth into well-being at low and middle usage levels. Robust digital infrastructure supports employment by allowing faster matches in the job market, improves education by expanding the access of students to new material or instruction and strengthens governance by involving citizens more directly in decision making and reducing the inequality in access to information.
“The positive relation between technology readiness and wellbeing underlines the importance for developing countries to put the widespread adoption of digital technology among the items at the top of policy agenda, either through investing in digital infrastructure and promoting technology usage, or by creating the conditions for the private sector to invest,” added Hrotko.
The last decade has shown that governments who stick to strategies and policies focused on well-being can deliver material impact to the population. African nations that have done so include Morocco, which has improved 5 places, Ethiopia (8 places), Rwanda (7 places), and the Republic of Congo (6 places), which have all improved more than 5 places, and Kenya, which improved 4 places.
“BCG has been a strong advocate of the need for countries to focus policies and development strategies on improving well-being, however there remains a belief that policies aimed at improving well-being may lead to weaker GDP growth,” said Enrique Rueda-Sabater, a Senior Advisor at BCG. “Our analysis finds this tradeoff can be avoided and, in fact, an approach that balances both well-being and growth is advisable under normal circumstances as well as during times of crisis. In such periods, countries must resist the temptation to pursue policies that come at the expense of well-being.”
Most improved African nations are:
Ethiopia rank increase: +8 SEDA Score 2009 vs 2018: 23.8 – 32.9
Rwanda rank increase: +7 SEDA Score 2009 vs 2018: 32.0 – 38.0
Republic of Congo rank increase: +6 SEDA Score 2009 vs 2018: 28.5 – 32.7
Morocco rank increase: +5 SEDA Score 2009 vs 2018: 41.4 – 45.8
Kenya rank increase: +4 SEDA Score 2009 vs 2018: 31.4 – 35.4
About SEDA
SEDA is a fact-based analysis that assesses well-being based on ten dimensions, including health, education, and infrastructure. SEDA scores 152 countries on a relative basis in terms of their current well-being and the change in their well-being over time. It also measures how effectively countries are able to convert the wealth they have into well-being, regardless of their income level. A copy of the report can be downloaded here.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve a sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with more than 90 offices in 50 countries. For more information, please visit bcg.com.