Introduction and Overview

Observers of the economic development of Africa often posit the low level of development in many countries that are mired in low income and plagued by widespread poverty and inequality. Yet, a key feature of the trends in the continent’s economic development over the past two decades that has received less attention is the graduation of many countries to middle-income status. According to the World Bank classification, as of April 2021, 21 African economies—Angola, Benin, Cabo Verde, Cameroon, the Comoros, the Republic of Congo, Côte d’Ivoire, Djibouti, Eswatini, Ghana, Kenya, Lesotho, Mauritania, Morocco, Nigeria, São Tomé and Príncipe, Senegal, Tanzania, Tunisia, Zambia, and Zimbabwe—had achieved lower-middle-income status and 5—Botswana, Equatorial Guinea, Gabon, Namibia, and South Africa—had achieved upper-middle-income status. Trends prior to the COVID-19 pandemic indicate that most African countries were projected to reach middle-income status by 2025. Only 13 countries, mostly fragile states, are expected to remain in low-income status. This book represents an important contribution to a better understanding of the middle-income trap on three dimensions: theoretical analysis, empirical observation, and policymaking. From a theoretical standpoint, the book fills a gap in the literature by providing a comprehensive review of the causes of the middle-income trap. From an empirical standpoint, the book examines the growth performance of African countries at various income levels with particular attention to middle-income countries. The rigorous empirical analysis isolates the variables that are most important in avoiding the trap. From a policymaking perspective, this book is innovative because no study has covered the issues involved in transitioning from middle-income to high-income status in Africa. The book fills these gaps by examining five middle-income countries in depth: Botswana, Côte d’Ivoire, Morocco, Nigeria, and South Africa. In each case, based on the findings, it proposes coherent policies to prevent these countries from falling into the middle-income trap. This should help policymakers in these countries and in other African middle-income countries in designing the next generation of policies to enable a smooth transition to high-income status.