Structural Dependencies and Economic Convergence in Africa: Analysis of Income Per Capita and Value-added Sectoral Contributions

Despite decades of regional efforts, Africa-wide economic integration remains far from full, partly due to the multiple national currencies, which the African Union (AU) aims to eliminate by 2045. Utilizing data on sectoral value-added and income per capita from 48 African nations (1970–2023), the study tests convergence using pooled ordinary least squares (OLS), fixed-effects, and random-effects estimations, as well as system generalized method of moments (system GMM) estimations. The analysis indicates conditional catch-up in income and structural transformation continent-wide; however, disparities in per capita income and agricultural transformation have widened, especially among agricultural commodity and oil-exporting economies, where convergence is notably absent. While sectoral convergence is evident within groups, fragile and emerging market economies (EMEs) diverge in both industrialization and agricultural modernization. Oil-exporters have the strongest within-group convergence, but absolute cross-country gaps persist, mainly outside the service sector. Overall, convergence hinges on industrial capacity, service-sector formalization, financial development (FD), foreign capital absorption, and exchange-rate stability. For sustainable integration, factor-based economies must prioritize industrial and agricultural transformation, strengthen service formalization, deepen finance, stabilize exchange rates, and pursue governance and policy reforms to close structural divides and foster inclusive growth.