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Africa’s Position in the Global Value Chain

According to the World Bank, increasing value chain participation by 1% could increase per capita income by more than 1%. Despite evidence that some African small firms have moved up global value chains through process upgrading over the past decade, there is a deficiency in product upgrading – the transition to production of higher-value goods and services. This aspect must be improved. Most African countries are still primary commodity producers and specific steps need to be taken to reverse the situation. The first is that both the public and private sectors must work together to capture domestic value and be prepared for the repercussions of deglobalisation. Industrialists such as Tony Elumelu and scholars such as Kenneth Amaeshi and Uwafiokun Idemudia  have argued for a framework they call Africapitalism. The idea is that it will support Africa’s socio-economic realities through the commitment of the private sector. But the role of government is also critical in creating an enabling environment. According to the African Development Bank, up to 263 million young people will be deprived of employment prospects in the near future. There has therefore never been a better time for the public and private sectors to collaborate and capture domestic value in Africa.