Economic complexity to boost the selected sub-Saharan African economies

Abstract

Orientation: Economic complexity is a measure of productive capabilities indirectly by looking at the mix of sophisticated products that countries export. The economic complexity index proposed a proxy for diversity and ubiquity of products in the export basket.

Research purpose: This study seeks to determine if economic complexity can influence the inequality measured by the Gini index in some selected sub-Saharan African countries.

Motivation for the study: The need for the study emanates from the notion that that economic complexity can reduce income inequality hence it is imperative to investigate this relationship in the sub-Saharan African region where most countries produce few sophisticated goods that are also labour-intensive. Inadequate literature within the African continent has also contributed to the formulation of this study.

Research approach/design and method: This study employed the autoregressive distribution lag (ARDL) model to analyze a panel data set, which includes eight sub-Saharan African countries for the period 1994–2017.

Main findings: We found that economic complexity can reduce income disparities.

Practical/managerial implications: Sub-Saharan African countries should shift their productive capabilities and resources from primary to sophisticated products in the manufacturing and services sector to increase economic complexity and reduce inequality.

Contribution/value-add: The study makes an important contribution to the debate about the relationship between economic complexity and income inequality in the sub-Saharan African context and it is envisaged that it will inform the actions of the decision-makers to drive future productivity and prosperity in the region.