The Prize is a huge cash award given to a democratically elected African leader who follows constitutional guidelines regarding term limits and who exemplifies excellence in leadership.
The Ibrahim Index, the latest version of which was released a few days ago, ranks African governments in terms of how good a job they do governing their citizens. The best governed countries in Africa, according to this Index? Mauritius, Cape Verde, the Seychelles Islands, Botswana and South Africa. Mauritius is a real star in Africa -- it is also the only African nation in the top 20 group of countries that makes it easy to Do Business.
As the Doing Business group point out: "economic activity requires good rules." What kinds of rules? Countries need rules about how business is conducted as well as rules about how the broader society functions (part of the governance equation). Growth and prosperity depend upon creating incentives to change rules from bad (predatory, inefficient, ineffective) to good (prosperity-enhancing, efficient, and broadly empowering).
The Prize and the Index, in their own ways, try to create a few such incentives -- by identifying and rewarding good behavior but also by analyzing what contributes to poor governance. And because the project is African-driven, it may have additional credibility in the minds of Africans and others.