Overcoming the middle-income trap and achieving sustainable development

Abstract

This paper explores the challenges and opportunities African countries face in escaping the middle-income trap—a condition where economic growth stagnates after reaching middle-income status. With 32 African nations currently classified within this income bracket, the study highlights both domestic and external factors influencing development trajectories. While institutional and policy environments are crucial, climate change emerges as a key exogenous factor. However, it also presents an opportunity: global climate efforts can drive the structural transformation needed for sustainable growth. The path forward requires investment in green technologies, agricultural innovation, and infrastructure, supported by strong public-private collaboration and regulatory frameworks. A holistic policy approach, leveraging clean energy, digitalization, and industrial modernization, is essential to help African economies transition toward high-income status.