ABSTRACT
The rhetoric on the need for Africa to industrialize while leveraging its natural resources’ endowment has had mixed outcomes so far. The bulk of Africa’s export is still dominated by unprocessed commodities. Yet, continental markets provide opportunities for value addition in resource-rich countries and the establishment of regional value chains (RVCs) in various sectors ranging from agricultural food to mining value-added products. The COVID-19 pandemic has increased the continent’s vulnerability to foreign markets, meaning Africa needs to produce more of what it consumes. The African Continental Free Trade Area is expected to address fragmentation of African economies and therefore improve their competitiveness. These will provide businesses with new and expanded opportunities to invest in higher value-added segments of regional and continental value chains, unlocking the potential of African resource-rich countries to catalyze the continents’ industrial development. Yet, such an outcome will not be automatic. Deliberate efforts are required to establish wide-reaching RVCs. Effective implementation of the AfCFTA should be complemented by concerted efforts to address non-tariffs barriers to production and trade, especially infrastructure bottlenecks. The urgent need to match labour force with required skills, promote integrated special economic and industrial zones, enhance access of businesses, to low-cost financing cannot be overemphasized.
