Evaluating the technical efficiency of African economies using DEA and the bootstrap approach

It is well-acknowledged that many African economies perform well below their potential, yet there is little knowledge about the distance of these economies from their productivity frontiers. This study examines the technical efficiency of 43 African countries using the non-parametric DEA technique and the double-bootstrap approach. Technical efficiency results by income class show that the best performers in terms of technical efficiency are countries belonging to the upper middle group, followed by the lower upper middle-income countries, while the least efficient countries belong to the lower income economies. Double bootstrap and truncated regression results show that improvements in governance, promotion of FDI, and information communication technologies are major drivers of technical efficiency. This study provides direction and opportunities for African countries to increase output by improving efficiency of resource utilisation.