Economic development is paramount, especially in Africa, often termed the "developing South." While significant progress in science and technology has been made since World War II, many African nations remain impoverished. This paper challenges the sufficiency of GDP growth as a measure of economic development in Africa. Despite the end of colonialism, Africa's relative standing compared to the rest of the world seems to have deteriorated. For example, Africa's share of global GDP has declined from 3.89% in 1981 to 1.98% in 2000, only slightly increasing thereafter, while its population nearly doubled between 1960 and 2020. This marginalization extends to global production, finance, and labor markets, with a shrinking share of global trade and investment. Existing research acknowledges multiple factors influencing economic development, including capital, labor, human resources, education, technology, innovation, information, geography, policy, politics, democracy, and institutions, and numerous studies have explored these in the context of Africa, examining manufacturing, FDI, governance, education, financial markets, and innovation. However, the complexities and the lack of development in most African countries motivate the authors to utilize a more comprehensive metric. This paper employs a new metric, Revealed Comparative Wealth (RCW), to analyze economic development in Africa and investigate the underlying mechanisms hindering its progress, ultimately offering policy recommendations to unlock its potential.

The existing literature on African economic development presents a mixed picture. Some studies highlight positive factors such as technology spillover from FDI (Haddad & Harrison, 1993), the positive impact of portfolio flows and FDI on growth (Assefa & Mollick, 2017), and the importance of governance and political freedom (Savvides, 1995). Other studies emphasize human resource development (Keita, 2016) and good government capacity (Fayissa & Nsiah, 2013) as key elements. However, other scholars point to the complex and multifaceted nature of the factors involved, highlighting the limitations of relying solely on GDP growth as a measure of economic development. This complexity, coupled with the persistent underdevelopment in much of Africa, necessitates a more nuanced approach that goes beyond GDP growth. This study, therefore, utilizes the RCW metric to address these limitations and provides a more complete picture of African economic development.

The study utilizes data from the World Bank, including GDP (current US$) and population for 46 African countries and 19 developed countries from 1960 to 2020. The core methodological innovation is the application of the Revealed Comparative Wealth (RCW) metric (Gao et al., 2024). RCW is calculated as the ratio of a country's GDP per capita to the world average GDP per capita, essentially representing the ratio of a country's share of world wealth to its share of the world's population. The authors opt for nominal GDP rather than Purchasing Power Parity (PPP) GDP to accurately capture the global distribution of economic power and the capacity of elites to command resources in global markets. The RCW is dimensionless and its time series, normalized by the yearly world average income per capita, is stationary, facilitating correlation analysis. The study constructs bipartite networks based on correlations between RCW curves of African and developed countries to illustrate the economic coupling between them. Strong positive and negative correlations are identified, and the networks are visualized to show the relationships. The Zipf-Mandelbrot law is used to model the distribution of normalized RCW values, defining a global economic hierarchy and revealing the position of African countries within that hierarchy. Finally, the study analyzes international trade data from UN Comtrade to examine Africa's position in global value chains and to evaluate the contribution of colonialism and neo-colonialism to its underdevelopment.

The analysis reveals a strong negative correlation between the RCW of many African countries and those of advanced economies. Over 30 African countries show this negative correlation, indicating an inverse relationship between their economic performance. Approximately one-third of these countries exhibit flat RCW curves in recent decades, suggesting they are trapped in a state of equilibrium, growing only at the world average rate. Further analysis, employing the Zipf-Mandelbrot Law, demonstrates that African countries occupy inferior positions in the global economic hierarchy. Analysis of international trade data confirms that many African countries are situated at the bottom of global value chains, largely providing raw materials to developed nations. A significant portion (over 40%) of African countries have RCW values below 0.1, implying that a substantial percentage of their population struggles for mere survival. The study examines the influence of colonialism and neo-colonialism, highlighting the role of extractivism and the unequal distribution of profits from foreign investment. Even in resource-rich countries, profit allocation frequently favors foreign investors, leaving host countries with minimal gains. Furthermore, internal profit allocation often disadvantages workers, creating social unrest and limiting the potential benefits of foreign investment. The imposition of unfavorable trade terms, currency devaluation through IMF loans, and forced imports further contribute to the economic disadvantage of African nations.

The findings of this study directly address the research question of why many African countries have not developed well. The strong negative correlation between the RCW of many African countries and that of advanced economies reveals a critical mechanism driving this underdevelopment: Africa's position at the bottom of global value chains. This places African nations in a state of persistent dependency, hindering their ability to achieve self-sustaining economic growth. The negative correlation also suggests that the economic cycles of many African economies are inversely linked to those of developed nations, potentially further exacerbating the issue. The significant findings challenge previous explanations focused solely on internal factors. While those factors are crucial, the study highlights the importance of structural factors related to the global economic system and the historical impact of colonialism and neo-colonialism. The study also contributes to existing literature by employing a more robust metric (RCW) and offering a systemic analysis of Africa's economic performance within the framework of a global hierarchy.

This study demonstrates that the underdevelopment in Africa is deeply rooted in its position within a global economic hierarchy where many African nations are trapped at the bottom of global value chains. Colonialism and neo-colonialism exacerbated this situation through unequal profit allocation and exploitative economic practices. To unlock Africa's development potential, diversification of economic activities, fostering local creativity and innovation, and strategic capital accumulation are crucial. Wisely utilizing foreign capital and securing fairer profit-sharing agreements with multinational corporations are critical steps. Examining the success stories of countries like Mauritius offers valuable lessons and potential models for others to follow. However, adapting those models to larger, more diverse economies presents significant challenges requiring careful consideration.

The study acknowledges several limitations. Firstly, the data utilized might not fully capture the complexities of informal economies prevalent in some African nations. Secondly, the RCW metric, while innovative, is relatively new and requires further validation and refinement. Thirdly, the study primarily focuses on macro-level economic indicators, lacking a detailed analysis of micro-level factors. Further research should address these limitations by integrating data from informal economies and conducting more in-depth analyses at the micro-level.