Manufacturing in Southern Africa: Dream or Reality?

The document argues that Southern Africa remains largely excluded from global value chains due to poor infrastructure, weak manufacturing, and a lack of regional integration. It suggests that while governments should focus on enabling sectors like energy and transport, the region needs better data collection—noting that only South Africa participates in the OECD's TiVA database—and a strategic rebranding effort similar to Costa Rica's approach to attract lead firms. The text highlights agro-processing and services as key areas for competitive advantage and growth.

• Southern Africa is largely excluded from global value chains due to geographical distance, high comparative costs, and a failure to establish regional value chains. This exclusion is driven by weak manufacturing sectors, a poor mix of tradable products, and a lack of economic and infrastructural integration, including border difficulties.
• Integration into value chains requires a dual focus on enabling sectors (energy, water, and transport) and production sectors (extractives, agro-processing, and manufacturing). While progress has been made in enabling sectors, capacity in production sectors is lagging.
• There is a critical shortage of accurate data in Southern Africa to inform value chain strategies. Only South Africa participates in the OECD's TiVA (trade in value addition) database, which limits the tool's utility for policymakers across the Southern African Development Community (SADC).
• Analysis of South Africa's trade shows that in 2011, the foreign content of its exports was low at 19.5%. However, services content accounted for 35.7% of the value of its manufactured exports, suggesting that job creation and regional value chain growth are more likely to emerge from the services sector than from manufacturing.
• Africa's primary competitive advantage is identified as agro-processing due to under-utilised arable land and growing global food demand. Unlocking this potential will require services liberalisation agreements within Southern Africa.

APA

South African Institute of International Affairs (2016). Manufacturing in Southern Africa: Dream or Reality? https://saiia.org.za/research/manufacturing-in-southern-africa-dream-or-reality-the-need-to-integrate-into-global-value-chains/

Chicago

South African Institute of International Affairs. Manufacturing in Southern Africa: Dream or Reality? 2016. https://saiia.org.za/research/manufacturing-in-southern-africa-dream-or-reality-the-need-to-integrate-into-global-value-chains/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Manufacturing in Southern Africa: Dream or Reality? |date=27 July 2016 |url=https://saiia.org.za/research/manufacturing-in-southern-africa-dream-or-reality-the-need-to-integrate-into-global-value-chains/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2016manufacturing, author = {{South African Institute of International Affairs}}, title = {{Manufacturing in Southern Africa: Dream or Reality?}}, institution = {South African Institute of International Affairs}, year = {2016}, month = jul, url = {https://saiia.org.za/research/manufacturing-in-southern-africa-dream-or-reality-the-need-to-integrate-into-global-value-chains/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }