The paper
This article examines how services contribute to African value chains, both as exports and as inputs embodied in goods. It combines value-added accounting with simulations of regional goods-market integration.
Research findings
- Services contribute substantially to goods exports, but African value chains source relatively little of their services inputs from elsewhere in the region.
- In the simulated integration scenarios, liberalizing goods trade raises demand for regional services inputs without widespread displacement of globally competitive suppliers.
Policy takeaways
- Give services a more prominent place in African integration strategies, including reforms that improve access to competitive inputs.
- Combine regional integration with openness to global suppliers, and assess value-chain development through income and production opportunities rather than maximizing the domestic value-added share.