Abstract:
Strong participation in Global Supply Chains (GSCs) indicates the structural transforma- tion at the heart of the 'Africa we want' described in African Union's Agenda 2063 project. We report new input-output based measures at several levels: across countries, regions, and sectors over the period 1995-2022, explore correlates of their participation, seeking to detect differences in patterns between Sub-Saharan Africa (SSA) and Middle East and North Africa (MENA), two regions often treated separately. On average, for both SSA and MENA, exports have a low content of imported intermediates. Exports undergo further transformation in destination countries before reaching consumers. Compared with other regions, SSA and MENA mostly engage in supply chain trade with countries outside their respective regions. In sum, despite regional trade agreements focusing on reducing trade barriers to intra-regional trade, regional value chains have failed to develop in both regions, a significant pattern in a world of increasing reshoring in a world of rising geopolitical tensions. For both regionas, higher mobile subscriptions and higher scores on political stability are associated with higher GVC participation rates. Higher trade costs are associated with lower backward participation and lower overall GVC participation. The dampening effect of high trade costs on imports is greater for SSA countries compared to those in the MENA group. For MENA, a 1% increase in trade costs reduces the import content of exports by 2.6% and by 3.3% for SSA.