In a series of discussions in the month of October we discussed ‘Africa within Global Value Chains’. The discussion focused on the following:
- What are global value chains? You can listen to the podcast here.
- Whether Africa can do better in Global Value Chains (GVCs). You can listen to the podcast here or on our YouTube channel.
- Ideas for Africa to grow into Global Value Chains. You can listen to the podcast here.
In summary, the discussions noted the following:
- Global Value Chains refer to the cross-border production and distribution networks of goods and services. This has resulted in a disintegration of the production and distribution networks while integrating trade globally. In addition, there has been a raise in multinational entities, franchising arrangements and globalization.
- On Africa’s level of participation in GVCs we noted that Africa mainly participates at the entry level of the value chains. This is largely through supply of raw materials or unskilled labour. This being the case, Africa tends to receive very low remuneration from its participation in global value chains. An example give is that Africa would supply copper used for making a phone charger of a high end smart phone which is valued significantly lower than the end product which is the smart phone.
- In the third discussion we considered some ideas that Africa could explore to grow into GVCs. The ideas shared include, review of taxing regimes, institutional reforms and using regional trading blocks including the Africa Continental Free Trade Area (AcFTA).