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. JEL Classification F15, O47, O55, E32, O14