A $5m prize for Africa's most effective head of state is being launched by one of the continent's top businessmen.

UK-based mobile phone entrepreneur Mo Ibrahim - who was born in Egypt - is behind the plan to rate governance in 53 African countries each year.

The contest, launched in London, will award winning leaders $5m (£2.7m) over 10 years when they leave office, plus $200,000 (£107,000) a year for life.

"We need to remove corruption and improve governance," Mr Ibrahim said.

'No life after office'

Then the continent would not need any aid, said Mr Ibrahim, who sold Cel Tel, his pan-African mobile phone company, to MTC in Kuwait for $3.4bn (£1.8bn) last year.

"The day we do not need any aid will be the most wonderful day in my life."

The Mo Ibrahim Prize for Achievement in African Leadership is being launched on Thursday.

The award will go to African heads of state who deliver security, health, education and economic development to their constituents.

In an interview with the Financial Times newspaper, Mr Ibrahim, 60, said leaders had no life after office.

"Suddenly all the mansions, cars, food, wine is withdrawn. Some find it difficult to rent a house in the capital. That incites corruption; it incites people to cling to power.

"The prize will offer essentially good people, who may be wavering, the chance to opt for the good life after office," said Mr Ibrahim.

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BBC Africa analyst Martin Plaut said it would be the world's richest prize - exceeding the $1.3m (£700,000) awarded by the Nobel Peace Prize.

It will be available only to a president who democratically transfers power to his successor.

Harvard University will assess how well the president has served his or her people while in office.

Nelson Mandela, former US President Bill Clinton and UN Secretary General Kofi Annan are among those who have welcomed the initiative.

Mr Mandela described it as an example to the world. Mr Clinton said he wished Mr Ibrahim and his foundation "much success in its important work".

Differing opinion

And Mr Annan thanked the businessman for "establishing such a generous prize as an incentive".

But not everyone agrees.

Patrick Smith, of specialist publication Africa Confidential, said: "The people who know what to do and have done well are already doing it.

"And the people who are doing badly and are killing their own people or stealing state resources are going to carry on doing that."

Africa has one of the world's richest concentrations of minerals precious metals, yet 300 million of its residents live on less than a dollar a day.