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Graduation of African Least Developed Countries (LDCs) - Emerging issues in a new development landscape

Apr 1, 2021

Since 1971, when the least developed countries (LDCs) category was created by the United Nations, sub-Saharan African countries have dominated the list.

Six decades later, Africa still tops this list, accounting for 33 out of the 46 LDCs globally. During this period, only three countries (Botswana, Cabo Verde and Equatorial Guinea) have graduated out of the LDC status, with a further two countries expected to graduate in 2024 (Angola and São Tomé and Príncipe).

Based on the current graduation criteria, an additional four African countries may be found eligible to graduate by 2030, though this is far less than the 50 percent target that was agreed by the 2011–2020 Programme of Action for LDCs.

Pronounced volatility of economic growth has been a defining characteristic of most African LDCs, compounded further by a lack of resilience to shocks, with COVID-19 being the latest and most severe.

This paper analyses growth experiences of African LDCs, including those that graduated from the LDC status and their related structural transformation during 2000–2020. It also examines some of the push and pull factors in graduating from the category, re-examines the theoretical underpinnings of the graduation criteria, and puts graduation in the context of a changed development landscape for Africa and the world.

The paper reveals that most African LDCs were unable to capitalize on the commodity price boom of the early 2000s before the 2008–2009 global financial crisis and notes that despite experiencing high growth rates, the continent has seen little structural transformation to support this. It also finds that African LDC economies remain less diversified with correspondingly little complexity and low productive capacities, meaning they have been highly susceptible to and often adversely affected by falling commodity prices in recent history.

The report findings should provide useful insights as part of the United Nations forthcoming review of LDC graduation, as well as the next Programme of Action for LDCs in the decade of action.

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