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Does Africa Have What It Takes to Upgrade in Global Value Chains?

  • Samuel K. Gayi
  • Joseph K. Banini
Chapter
Part of the Palgrave Studies of Sustainable Business in Africa book series (PSSBA)

Abstract

World trade in goods and services has increased steadily since the 1990s; and manufacturing processes and services that make up “value chains” are increasingly distributed strategically across the globe. Countries have thus become more and more reliant on assembling imported intermediate goods for their own exports: complex international production arrangements conceptualised as global value chains (GVCs). However, participation in GVCs is uneven across regions, and does not necessarily reflect a region’s participation in global trade, with about 85% of global value-added trade concentrated in three regional blocks—Asia, America and Europe. By comparison, despite a 60% increase in trade from 1995 to 2011, Africa’s share in global value-added only accounted for 2.2% of the total in 2011, as its participation is limited to the lower segments of GVCs, primarily supplying raw materials to which value is added in other regions. This chapter examines the critical components of GVCs in relation to Africa’s trade and evaluates the continent’s capacity to meet the requirements for upgrading gainfully in these chains, as well as the implications of GVCs for regional integration, trade performance and general economic development in Africa. It attempts to identify the types of policies that would facilitate the continent’s greater participation in GVCs in a manner that leads to sustainable growth and development, including employment creation. The chapter contends that considering the structural constraints of Africa, policies to promote GVC participation cannot simply be grafted onto its economy. Comprehensive development policies are necessary to address these constraints in order to promote intra-Africa trade as a basis for regional value chains (RVCs), through which the continent could develop its comparative and competitive advantages to position itself gainfully in GVCs.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Samuel K. Gayi
    • 1
  • Joseph K. Banini
    • 2
  1. 1.African Continental Free Trade Area (CFTA)United Nations Conference on Trade and DevelopmentGenevaSwitzerland
  2. 2.Sustainability Management SchoolGlandSwitzerland

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