Benin and Tanzania, moved from a previous ‘Low income’ category to ‘Lower-middle income’

In a recently published annual World Bank country income classifications report, two African countries, Benin and Tanzania, moved from a previous ‘Low income‘ category to ‘Lower-middle income’ category.

https://blogs.worldbank.org/opendata/new-world-bank-country-classifications-income-level-2020-2021

On the face of it and viewed within its own context, this is, shall we say, obviously commendable economic ‘progress‘ worth congratulating both countries (and their governments) for hitting that milestone of national economic ‘achievement’. Not least because it gives hope that, if that is the national objective, such things are actually possible with determination, a well implemented national execution strategy but above all; a willing and intentional government. Or, if you’ll and it tackles your fancy, national leadership.

It takes more than simply having a national (or government) objective and execution strategy and government bureaucratic diktats to implement and achieve a national (government) objective. It requires various inputs and, in that quintessential political and government bureaucratic jargon, ‘stakeholders‘, i.e, people who are vital in the project lifecycle or in achieving national objective. From a national level down to, again, another of the politico-government bureaucratic speak, the ‘grassroots’ level. And, equally important, the kissing and hugging and cajoling (a.k.a, diplomatic and international relations) international powers and interest groups, if not for their (direct) support, at least, to pretend to see things from the same perspective or look away, if need be.

So, from that perspective, and within the context of the World Bank categorisation criteria and therefore the achievement; congratulations to both countries!

But while civility is such that we [are] feel obliged to smile and pat each other on the back for a job well-done, at least in public, sometimes we do it while, deep inside, and privately, we’ve reservations and express misgivings; or indignation, depending on the circumstance.

So, it’s in that vein, that the current World Bank classification (ranking) of both Benin and Tanzania from their previous income group (status) to a new group, a notch above, without demeaning efforts by both countries, should be welcomed with a degree of caution and reservations.

This is in no way meant to degrade the achievements of both countries in that regard. Far from it, it’s to acknowledge that while that is a commendable economic milestone, nationally and internationally, it’s, in and of itself as an indicator of economic progress, not enough. There are many, arguably better, admittedly not standard socioeconomic indicators that must be considered such as food security, the quality and availability of food, general health, than the mere increase in Gross National Income (GNI) per capita used in the classification.

It’s also important to note that the current World Bank country income classifications were based on Gross National Income (GNI) per capita data of the previous year 2019, against thresholds adjusted annually for inflation. Therefore, the Gross National Income (GNI) per capita data used for this year’s classification does not account for the impact of COVID-19 on both economies. Next year’s classification could be greatly and negatively impacted by the impact of COVID-19, hence lower!

It must be understood that an increase in Gross National Income per capita, and the subsequent increase in the economic income ranking (status) of countries such as Benin and Tanzania, is of little consequence to the lives of ordinary people. It rarely decreases poverty levels. If anything, the increase in GNI per capita in such countries may well point to an anomaly in economic distribution. It may reflect and be a consequence of an increase in the incomes of a small economically dominant group who control (own) much of the economic activities (of production).

But even if we accept that high (increased) national income status mean something to African countries and their populations, it’s imperative to ask and examine, who ultimately benefits or would benefit more from such vital economic changes?

We must consider and examine the spending habits of African countries (and Africans) to understand who ultimately benefits or would benefit more from increased African (national) incomes.

We must ask:

– How is the increased income spent?

– On what and where is the increased income spent?

There’s one major response (answer) to these questions: Africa is largely a consumer continent. It consumes more than it produces. In other words, it consumes what others produce for it. Africa is a continental market for foreign products. Africa is a big open mouth for foreign products.

So, an[y] increase in African national incomes (even individual earnings) will usually mean an increase in the market (potential) for foreign products. African countries (governments and their officials) and ordinary Africans will increase their consumption of (and spending on) foreign products (imports). They will want to have (and be seen with) all the perceived socioeconomic status symbols, the latest iCraps and SmartCraps. They will want the latest gas guzzlers of all kinds of brands, to show their increased (improved) economic status. They will want and upgrade from a Japanese car brand, to a German car brand, the Mercedes Benz, BMWs, Audios. This bleeds African economies of funds.

Ultimately, Africa’s economic growth (and improvement) from poor, lower, to middle and upper income status (and its growing middle class) mean an increase in the consumption of and spending capacities on foreign products. It also means the degradation of and trampling on many things African in preference for almost all things foreign. From foreign consumer products to education; western educational establishments benefit tremendously from increased African incomes. This is no exaggeration!

There’s almost an unconscious corresponding increase in foreign taste by (many) Africans to the increase in their incomes (earnings) and they rationalise this for wanting better ‘quality‘; better ‘quality‘, of course, means foreign.