Manufacturing in Southern Africa: Dream or Reality?

The research paper argues that Southern Africa remains largely excluded from global value chains due to poor infrastructure, weak manufacturing, and a lack of data. It highlights that while South Africa has a strong services component in its exports, the broader region should leverage agro-processing and services liberalisation to drive economic growth and regional integration.

• 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 further exacerbated by weak manufacturing sectors, a poor mix of tradable products, and a lack of economic and infrastructural integration, including border difficulties for exporters.
• Integration into value chains requires focus on both 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. The author suggests governments should manage enabling sectors while the private sector links production sectors to global chains.
• Southern Africa lacks the accurate data necessary to create sophisticated strategies for value chain participation. While the OECD's TiVA database measures trade in value addition, South Africa is the only country in the region or continent participating in the initiative, limiting the tool's utility for other SADC policymakers.
• Analysis of South African exports in 2011 shows a low foreign content rate of 19.5%. However, 35.7% of the value of its manufactured exports consisted of services content goods, a level similar to OECD countries. This suggests that job creation and regional value chain growth in South Africa 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. Because agro-processing has a high services component, services liberalisation agreements in Southern Africa are considered essential for creating regional value chains.

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} }