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Global value chain contributes 30% to Africa’s growth – Report

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UNGlobal Value Chains (GVCs) contribute about 30% of Africa’s growth and this makes GVC in economic growth contribution very significant.

However, the only region which surpasses Africa is West Asia with 37% which is explained by activities in India and some of the powers therein.

Foreign Direct Investment (FDI) also plays a major role in the activities of GVC and increases value added growth. So Ghana must now access how she can harness the advantages relating to this GVC to support production and increase GDP.

For the first time in the compilation of the World Investment Report (WIR 2013) launched  by the United Nations Conference on Trade and Development (UNCTAD) in Accra, developing countries are shown to have absorbed more FDIs than developed countries, an indication that developing countries had higher earning returns as compared to developed countries as in repatriated earning and re-invested earning.

Presenting the WIR 2013, Philip Cobbina, a lecturer at the GIMPA School of Business said as per the WIR 2013, “0.7% of the development pacts of the level of production and manufacturing means the country is engaging, 1.2% means competing, 2.2% means converting and 3.4% means the country is leapfrogging into a higher level of production and manufacturing.”

“In adopting GVC, countries should be conscious of the ups and downs and make a decision on what to support and which pact to take to ensure higher earned activities, as in research and development and the level of contribution the country make.”

He asked, “how much of our GDP goes into research and development; employ a pool of higher trained workers as a pre-requisite to leapfrog to 3.4%?”

The WIR 2013, made some policy framework recommendations for GVC and development to be put in place which includes embedding GVC in development strategy in a structured approach and start GVC along development pacts.

“Creating and maintaining environment for trade and investment and enable participation,” it adds.

The WIR 2013 noted that, when countries negotiate, absorb ideas and put resources together as a region to leverage and synergise, it will improve trade and investment.

Mr. Cobbina explained that, “trade and investment work in tandem so they should be treated as such.”

The theme for the launch was Global Value Chains: Investment and Trade for Development.

B y Dorcas Appiah

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