Rabat, 21 November 2025 (ECA) –The ECA Office for North Africa held on Thursday 20 November a webinar under the theme: “Middle income countries trap: the case of North Africa.”
The meeting aimed to shed light on new challenges middle-income countries are currently facing, with the aim of helping define an updated analytical framework tailored to their needs. Discussions drew on the experiences of Algeria, Egypt, and Morocco, three of the five largest economies in Africa.
“The global context in which middle-income countries (MICs) must operate today is very different of countries that have achieved high income status,” explained Adam El Hiraika, Director of the ECA Office for North Africa. “Economic development and transformation are presently taking place in a context characterized by technological upheaval, geopolitical and economic fragmentation, an aging global population, and, above all, climate change, with increasing environmental constraints and a considerable economic impact,” he added.
The middle-income trap is currently defined as a situation where a country’s GDP per capita growth slows down persistently, preventing it from achieving high-income status. This situation reflects a decline in productivity gains which had previously allowed the country to escape the poor country status.
Until recently, it was believed that countries could escape the middle-income status by pursuing capital accumulation, structural transformation, integration into global value chains, industrial modernization, and the development of human capital skills and innovation.
Such strategies enabled 36 middle income countries worldwide to achieve high-income status between 1993 and 2023. However, the context that enabled their emergence coincided with exceptionally favorable circumstances that have become less available nowadays, such as abundant and cheap energy, inexpensive capital fueled by growing global savings, geopolitical stability, rapid population growth, and the expansion of international trade and global value chains, which, in turn, stimulated technological diffusion.
Presently, middle-income countries must increase their productivity while facing climate risks that threaten their economies, growth and living conditions. Their water, energy, and food sectors are under increasing pressure, their infrastructures are vulnerable to climate shocks, and building resilient infrastructures will require significant additional investment, thus leaving middle income countries less equipped than high-income ones for climate adaptation.
New pathways out of the middle-income trap currently include investing in sustainable productivity growth through technological modernization, human capital upgrading, and digital transformation; adopting low-carbon and climate-resilient strategies and the sustainable use of natural resources; and equitable and inclusive development by addressing growing income inequality and social exclusion.
To escape the middle income trap, countries must also consider increasing their workforces' ability to manage disruptions and strengthen resilience (AI skills, resource management, climate services, adaptability and resilience to shocks, etc.); improving their national capacity for sovereign innovation (strengthening local capacities for innovation to adapt to geopolitical fragmentation and the potential slowdown in technology dissemination); and strengthening the capacity of institutions to respond to major crises such as COVID-19. Other actions include improving their strategic autonomy and regional or sub-regional integration to make up for the decline in global convergence, said Zoubir Benhamouche, an economist at the ECA Office for North Africa.
The webinar on “Middle income countries trap: the case of North Africa” was held in accordance with the recommendations of the High-Level Ministerial Conference on Middle Income Countries jointly held in Rabat on 5-6 February 2024 by the UN Economic Commission for Africa (ECA) and the Kingdom of Morocco, in quality of Chair of the Friends of Middle-Income Countries group. It was also held as part of the ECA Office for North Africa support to its member countries with a focus on facilitating the exchange of successful experiences to facilitate their escape from the middle-income trap.
Issued by:
Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Ethiopia
Tel: +251 11 551 5826
E-mail: eca-info@un.org