Industrial policy in the global value chain era: a new paradigm for Africa

Abstract

In recent years, African countries have been giving greater priority to building their industrial capacity, placing particular emphasis on manufacturing in order to reduce their dependency on commodity trade. However, most African countries face significant challenges – not least of which are severe infrastructural shortcomings, weak trading links with their regional neighbours, and skills deficiencies in both the public and private sectors. Although the growing prominence of global value chains (GVCs) has, in principle, opened many doors to African producers and traders, most countries on the continent lack the basic ‘building blocks’ that will enable them to take full advantage of such opportunities. Clearly, African countries need effective and realistic industrial policies that address economy-wide shortcomings while creating business-friendly conditions that encourage more firms to engage in regional and global trade.