africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
of inputs and outputs, and create efficient links with global markets (Cattaneo and
others, 2013).
Recent studies suggest that the reduction of supply-chain barriers to trade (i.e.
barriers posed by border administration, transport, and telecommunications infrastructure
and related services) would do more to speed the growth of GDP and
trade than would the complete elimination of tariffs. For example, WEF (2013)
suggests that the reduction of supply-chain barriers to trade could increase world
GDP by nearly 5 percent and trade by 15 percent, compared to less than 1 percent
and 10 percent, respectively, from a complete elimination of tariffs. As illustrated
by Figure 16.3, Sub-Saharan Africa would be the main beneficiary if supply-chain
barriers were removed.
Figure 16.3: Reducing Supply-Chain Barriers: Impact on GDP and Trade
Source: WEF (2013).
16.3.1.3 Improving business and investment climates
The improvement of business and investment climates is essential to attracting lead
firms and connecting developing countries to value chains. Cattaneo and others
(2013) stress that the importance of business climate may vary with the governance
structure of value chains, decreasing as a value chain becomes more vertically
integrated. Those authors distinguish five components of an effort to improve the
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