Path to Progress: Sub-Saharan Africa’s Economic Convergence—Learnings for Zambia to Overcome the Middle-Income Trap

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.