Global Value Chains and Africa’s Industrialization

The challenge for African economies is to ensure that global value chains have a positive impact on socially inclusive development. Africa’s participation in global value chains is currently limited to lower value activities although opportunities exist for upgrading to higher ones. African countries can further integrate into global value chains by opening to trade, targeting regional and emerging markets, modernising infrastructure, promoting local entrepreneurship, and investing in education. Global value chains require additional considerations: each value chain has unique requirements; policies may be suited for integrating into global value chains but not conducive to upgrading; and unnecessary tax incentive systems can result in a loss of revenue. Equitable economic and social transformations and environmental sustainability remain core concerns for Africa to maximise the gains that global value chains can offer.

In order to put in place the policies that will stimulate the development of competitive firms in job-creating activities, policymakers need
i.    to be aware of what the new rules of the game in international trade mean for African economies,
ii.    to assess those economies’ strengths and weaknesses in that context and
iii.    to consider the policy options best suited to their country’s endowments and their own national strategy.
This AEO2014 thematic volume, complete with individual case studies for all 54 African economies, aims to help them in that endeavour.