International Development Lending and Global Value Chains in Africa

The paper analyzes how international lending influences African countries' integration into global value chains. It finds that Chinese lending, which focuses heavily on transport and communication infrastructure, increases the overall intensity of GVC participation. In contrast, World Bank lending, which prioritizes social sectors like education and health, helps countries move toward higher value-added, upstream positions in production networks. The study emphasizes that reducing trade costs through infrastructure is key to initial GVC access, while human capital investments support economic upgrading.

• Chinese Development Lending (CDL) increases the overall intensity of African countries' participation in global value chains, with the effect becoming statistically significant from the second year after the loan and increasing in magnitude over time.
• World Bank Development Lending (WBDL) is more effective than Chinese lending at helping African countries upgrade their position within GVCs, moving them toward upstream specialization as exporters of higher value-added intermediate goods.
• The differing impacts of the two lenders are attributed to their sectoral focuses: Chinese loans prioritize infrastructure, while World Bank loans prioritize social sectors such as education and health.
• Within the infrastructure sector, loans specifically targeting transport and communication significantly enhance GVC participation by reducing trade costs, whereas loans for power and water do not show significant results.
• Concessional loans provided by China for transport and communication infrastructure yield a stronger positive impact on GVC participation than non-concessional loans granted at market rates.

APA

Amendolagine, V. (2021). International Development Lending and Global Value Chains in Africa. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2021/05/CARI_WP48_AmendolagineIntlDevtLendingGlobalValueChainsAfrica-1.pdf

Chicago

Amendolagine, Vito. International Development Lending and Global Value Chains in Africa. South African Institute of International Affairs, 2021. https://saiia.org.za/wp-content/uploads/2021/05/CARI_WP48_AmendolagineIntlDevtLendingGlobalValueChainsAfrica-1.pdf.

Wikipedia

{{cite report |last1=Amendolagine |first1=Vito |title=International Development Lending and Global Value Chains in Africa |publisher=South African Institute of International Affairs |date=May 2021 |url=https://saiia.org.za/wp-content/uploads/2021/05/CARI_WP48_AmendolagineIntlDevtLendingGlobalValueChainsAfrica-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{amendolagine2021international, author = {Amendolagine, Vito}, title = {{International Development Lending and Global Value Chains in Africa}}, institution = {South African Institute of International Affairs}, year = {2021}, month = may, url = {https://saiia.org.za/wp-content/uploads/2021/05/CARI_WP48_AmendolagineIntlDevtLendingGlobalValueChainsAfrica-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }