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Africa middle income

Inequality and Africa’s IDA Middle Income Trap

Ravi Kanbur's picture



Inequality is of concern for at least three reasons. First, lower inequality per se is an objective for a decent society. Second, lower inequality improves the efficiency of economic growth in achieving poverty reduction. Third, high inequality impedes growth itself, through its impact on social cohesion and the investment climate.

Africa's MICs

Wolfgang Fengler's picture

Hardly a week goes by without an African investors’ conference or growth summit. Portuguese professionals are looking for opportunities in Angola. Silicon Valley companies are coming to Kenya to learn about its homegrown ICT revolution. This is not an irrational fad. Since the turn of the century, Africa’s growth has been robust (averaging 5-6 percent GDP growth a year), making important contributions to poverty reduction. The current boom is underpinned by sound macro policies and political stability. Unlike in some rich countries, public debt levels in most of Africa are sustainable.

One way to track Africa’s progress is by charting the number of countries that have achieved “Middle Income status”.