Mauritius was the best-run country and Somalia the worst. "People look at headlines from two or three countries and forget there are 55 countries in Africa and in most of them life is normal," Mo Ibrahim told Reuters during the launch of his foundation's index in Ethiopia.

"Governance performance across a large majority of African countries is improving...I hope these results will be used as a tool by Africa's citizens to hold their governments to account."

Improvements in governance are cited by investors as one reason for unprecedented financial flows to Africa in recent years, along with booming Asian investment, rises in commodity prices and debt relief.

Ibrahim, a Sudanese-born telecommunications entrepreneur, also gives a $5 million leadership prize to African leaders to promote democratic principles and combat corruption. Mozambique's former President Joaquim Chissano won last year.

For the latest index, nations were judged by criteria including economic stability, corruption, security, rights, laws, elections, infrastructure, poverty and health. The index, however, uses data that is two years old.

Mauritius, one of Africa's most stable and prosperous nations, was top with a score of 85.1 out of 100. It was followed by fellow Indian Ocean nation Seychelles, then another island state Cape Verde. Botswana came fourth, and regional economic power-house South Africa was fifth.

Africa open for business

The index hailed economic progress on the continent, with thirty countries showing an improvement in a sub-category of macroeconomic stability and financial integrity.

Forty countries increased their score for Internet access and 44 for phone subscribers.

"Africa is open for business," Ibrahim added in an interview. "Investors should look at our growth. And with the global financial situation the way it is, perhaps their money is safer in Africa than in the U.S."
Mired in civil conflict since 1991 and without an effective central government, Somalia propped up the index in 48th place with just 18.9 points.Almost as bad were Democratic Republic of Congo, Chad and Sudan -- all affected by conflict too. Best improver Liberia rose five places to 38th, scoring 48.7 points.

Ibrahim foundation board member Mary Robinson, a former president of Ireland, said the 2008 index showed improvements in rights and participation around the continent.

"The over-arching messages here are positive. More sub-Saharan African countries than ever are holding democratic elections," she said in Addis Ababa."I hope business people will look at the continent through the eyes of our index and see this massive progress," she added.

The Mo Ibrahim Foundation said the index was compiled by a team from Harvard University's Kennedy School of Government.