New perspectives on value chains in sub-Saharan Africa

The Covid-19 pandemic has caused major disruptions to global value chains (GVCs) around the world.¹ Trade wars were already posing challenges to current GVC arrangements and encouraging efforts to reorganise production networks, diversify supply chains and localise activity. Whether the recent instability represents a temporary disturbance to a longer-term trajectory or an historic transition to a new configuration remains to be seen.

Prior to the disruptions, it was clear that the world was becoming increasingly interconnected. It was hard to imagine a place unaffected by the value chains that criss-cross the globe. The 2020 World Development Report was the latest example of a paradigm that promotes liberalisation and integration into such networks, suggesting that this path ‘boost[s] growth, create[s] better jobs, and reduce[s] poverty’ (World Bank, 2020: 1). Morris et al. (2012) have made essential contributions in this regard, showing how African countries benefit from the opportunities to insert themselves into commodity GVCs (see also: Resources Policy, vol. 37, no. 4). Critical scholars, meanwhile, argue that the literature suffers from an ‘inclusionary bias’, dealing with successful cases only and neglecting countries that fail to benefit (Bair & Werner, 2011). They reason that the fortune of some in the world economy cannot be divorced from the misery of others (Werner, 2016; see also: Environment and Planning A, vol. 45, no. 11).

We believe that, while acknowledging that participation in the world economy offers opportunities for the Global South, researchers ought to pay more attention to downsides and pitfalls of GVCs (Phelps et al., 2018). Countries may find themselves locked into low value added activities and forced to sacrifice environmental and labour standards. They may become more exposed to external shocks, such as extreme weather events and epidemics in distant regions. This special issue provides new insights and perspectives on value chains. It highlights that tradable services are a path towards development that may complement more traditional strategies of industrialisation. The territoriality of GVCs is emphasised with regard to corridors and intermediary locations. The relevance of government policies is stressed, as are ecological and social features of value chains. Several articles deal with the emerging theme of regional value chains (RVCs), instead of GVCs.

The contribution by Das Nair and Landani shows how supermarkets can help to increase the capabilities of their suppliers. The authors observe a recent shift towards supplier development as a mutually beneficial and commercially oriented approach. Yet, they also argue that government efforts are needed to complement and support the measures taken by supermarkets – both nationally and within the framework provided by the Southern African Development Community (SADC). Visagie and Turok make a convincing case for tradable services to be taken more seriously as a potential driver of growth and development. Their assessment of corresponding data on the SADC countries indicates that tradable services currently contribute little to total trade. There is also not much evidence of significant regional integration in this regard or specialisation in higher value added activities. Nonetheless, the authors rightly point out that tradable services merit more attention by policy makers and researchers, especially at the scale of RVCs.

The article by Black, Edwards, Ismail, Makundi and Morris reveals that there is increasing trade in manufactured goods in SADC. It also provides evidence of emerging RVCs in agro-processing and the apparel and textile industries. These RVCs are, however, tied to global ones. Hence, the authors call for an industrial policy for SADC that facilitates not only RVCs but also harnesses the region’s participation in the world economy. In a second article, Barnes, Black, Markowitz and Monaco take a closer look at the automotive sector. Because many smaller regional countries are likely to miss out on attracting investment in yet-to-be formed automotive RVCs, there is a need for some compensation in other sectors, with each country benefitting from some value chains but not necessarily from all of them.

Other contributions highlight various negative outcomes. They do so based on the conviction that these are due to misguided policies and can be rectified by more suitable political action. Grant and Oteng-Ababio analyse the formalisation of Ghana’s e-waste economy, uncovering risks of downgrading informal businesses. These result from the fact that everything beyond formal e-waste management has been side-lined in a policy-making process that is top down and neglects local particularities. Gargallo and Kalvelage show that the local economic impact of trophy hunting in Namibia is often below expectations and unevenly distributed. They add that participation in this GVC allows for ecologically and socially sustainable outcomes only under very specific conditions. Hulke, Kairu and Revilla Diez shed light on conservation areas in Namibia and local small-scale farmers, revealing that instead of upgrading, there is mostly stagnation, with communal farmers failing to integrate into GVCs.

Hartmann, Mwaka and Dannenberg examine how foreign investment is channelled into farmland in the Southern Agricultural Growth Corridor of Tanzania, finding that the integration of smallholders aims at legitimacy for the corridor project, rather than economic sustainability. This becomes highly problematic whenever there are ruptures in the financial flows from global players to local farmers. The contribution by Scholvin and Breul on Mauritius and the oil and gas sector not only shows how ‘gateways’ integrate other places into GVCs. It also indicates that these spatial intermediaries may capture value at the expense of others. Being a tax haven, Mauritius enables transnational companies to reduce their tax liability in resource-rich countries, depriving them of income that could be used to facilitate development.

Summing up, this special issue addresses a variety of countries, sectors and topics in order to enhance our understanding of value chains. It offers new perspectives on an issue of critical relevance in economic development, identifying challenges that the Global South faces in today’s world economy and highlighting the opportunities that result from participation in value chains.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Being aware of differences between the concepts of production networks and value chains, we use the term value chains in this introduction for the sake of simplicity. Some of the contributions to the special issue use the production networks approach.