Trade under Global Value Chains in Africa (Lessons from Asia)

Abstract

A global value chain refers to a globalized manufacturing process in which the tasks for manufacturing the final product are differentiated and performed in different countries. Due to the high transport and coordination costs, globalized production in Africa is very rare. Most of the goods were made in the country or simply in a workshop. Tackling trade in global value chains is on the high-level political agenda of African countries. Despite trading among global value chains, there is a heated debate as to why some African countries are making progress in global markets and others are not. Some authors have noted that Asia has played an important role and performed well within global value chains. The purpose of this article is to understand the importance African countries place on the global value chain and also to explain why trade has succeeded in African global value chains and why some African countries are unable to interact with global value chains. Despite Asian lessons. The data used in this study was collected through 100 questionnaires and six semi-structured and open interviews with managers of African exporting organizations. For quantitative research, a systematic random sampling method was used to select respondents, while respondents were used for qualitative research. SPSS version 21.0 was adopted for the analysis of quantitative data, while the method for reducing qualitative data. The results show that there is no clear understanding and usual meaning for global value chains. Some African countries are now ranked in Africa in terms of foreign direct investment by the United Nations Conference on Trade and Development (UNCTAD) according to the World Investment Report (2018).

Keywords: Global Value Chains, Africa, Asia, Trade, manufacturing.

DOI: 10.7176/JESD/12-4-03

Publication date: February 28^th 2021