TITLE:
Path to Progress: Sub-Saharan Africa’s Economic Convergence—Learnings for Zambia to Overcome the Middle-Income Trap
AUTHORS:
Brian Kapotwe
KEYWORDS:
Middle-Income Trap, Convergence, Economic Growth, GDP Per Capita
JOURNAL NAME:
Modern Economy,
Vol.12 No.2,
February
22,
2021
ABSTRACT: Until after the year 2000, there has been limited
economic growth in Sub-Saharan Africa. While several countries in this region
have attained middle-income status and are among the fastest-growing economies
globally, many others have stagnated and risk falling back to low-income level.
The paper aims to examine GDP per capita
economic convergence of 35 Sub-Saharan countries using a unit root
model. Second, we isolate countries showing good GDP per capita convergence and
reviewed each country to draw out common successful elements as lessons for
Zambia. Only six out of the sampled 35 countries have slightly converged
towards the United States of America. From the six countries’ in-depth review, three
key success elements come out as recommendations for Zambia. These include 1)
Prudent management of mineral resource endowments such as copper and diamonds.
Proceeds from mineral wealth should be reserved for use during hard years and
to diversify the economy. 2) Strong focus on agricultural mechanization and
support to smallholder farmers to ensure complete agrarian transformation.
While the share of agriculture is expected to reduce as the economy grows, such
a decline should only happen once the secondary sectors are fully developed. 3)
Fiscal discipline in government spending, coupled with a free-market economic
system, is a key to sustaining Africa’s
growth.