Enhancing industrial performance in Africa: the role of global value chains participation

The literature on economic development underscores the crucial role of industrial growth in driving economic expansion and accelerating the structural transformation of economies. In this regard, active engagement in value chains is instrumental to Africa's industrial transformation. In this article, we analyse the effect of global value chains (GVCs) participation on industrial performance as measured by the Competitive Industrial Performance (CIP) index in Africa. Using the Instrumental Variables-Two-Stage Least Squares (IV-2SLS) and the Generalized Method of Moments (GMM) estimators, the study examines data from African countries over the period 1995-2020. The findings provide strong evidence that GVCs participation enhances industrial performance in Africa. More interestingly, the results reveal a positive and significant effect of regional value chains participation on industrial performance in the region. Based on these findings, African countries should develop a result-oriented industrial policy and promote Regional value chains by identifying and focusing on key sectors of comparative advantages.