Connecting Countries and Cities for Regional Value Chain Integration

The report analyzes the current state of intra-African trade, which has remained stable at approximately 15% for five years, and identifies barriers such as poor infrastructure, high tariffs, and a reliance on raw material exports. It argues that the AfCFTA and the Boosting Intra-African Trade (BIAT) action plan provide frameworks to overcome these hurdles. Using the automotive sector as a blueprint, the document proposes a 'hub-and-spoke' model for industrialization, drawing lessons from Morocco's success and Thailand's regional integration. It emphasizes the need for coordinated industrial policies, the strategic use of Special Economic Zones (SEZs), and the management of used-vehicle imports to create a sustainable market for new, locally produced vehicles.

• Intra-African trade has remained stagnant for several years, with exports and imports between African countries hovering around 15% of total trade from 2015 to 2019.
• The COVID-19 pandemic caused significant trade declines in the first quarter of 2020, with imports to sub-Saharan Africa falling by 15% and North Africa imports decreasing by 13%.
• South Africa is the dominant intra-African exporter, accounting for approximately 35% of aggregated Africa exports to African markets in 2019, and is the primary supplier of machinery and vehicles.
• The African Continental Free Trade Area (AfCFTA) is expected to generate significant economic gains, including a 33% growth in intra-African trade, a 1.2% increase in employment, and a 50% reduction in the continent's trade deficit.
• Morocco has successfully developed an automotive industry with a local integration rate of 60%, producing over 400,000 vehicles and creating more than 148,000 direct jobs between 2014 and 2019.
• A major barrier to the growth of a new vehicle market in Africa is the heavy reliance on used-car imports; in 2016, over 96% of vehicles imported into Kenya were second-hand.
• The proposed Sub-Saharan Africa (SSA) Automotive Pact suggests a hub-and-spoke model that could create 46,482 hub jobs and 11,072 spoke jobs, with an estimated shared gross value add of approximately $2 billion.
• Regional value chain integration is hindered by high transport costs and poor infrastructure; in 2019, Africa had the highest costs of transporting goods globally and fewer kilometers of road than it had 30 years prior.
• Special Economic Zones (SEZs) are identified as critical tools for GVC integration, with Ethiopia generating nearly 50,000 jobs and Kenya's export processing zones accounting for nearly 60,000 jobs.

APA

World Economic Forum (2021). Connecting Countries and Cities for Regional Value Chain Integration. http://www3.weforum.org/docs/WEF_Regional_Value_Chain_Integration_Automotive_Case_Study_2021.pdf

Chicago

World Economic Forum. Connecting Countries and Cities for Regional Value Chain Integration. 2021. http://www3.weforum.org/docs/WEF_Regional_Value_Chain_Integration_Automotive_Case_Study_2021.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Connecting Countries and Cities for Regional Value Chain Integration |date=January 2021 |url=http://www3.weforum.org/docs/WEF_Regional_Value_Chain_Integration_Automotive_Case_Study_2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2021connecting, author = {{World Economic Forum}}, title = {{Connecting Countries and Cities for Regional Value Chain Integration}}, institution = {World Economic Forum}, year = {2021}, month = jan, url = {http://www3.weforum.org/docs/WEF_Regional_Value_Chain_Integration_Automotive_Case_Study_2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }