Research Article

South Africa’s agro processing trade in value added, global value chains (GVCs) perspective

DOI: 10.1080/20421338.2021.1908693
Author(s): Ajebush A. Shafi, Republic of South Africa, Mammo Muchie, Republic of South Africa, Getachew T. Sedebo, Republic of South Africa

Abstract

The agro-processing sub-sector of the manufacturing industry has high recognition on the South African government’s development agenda. Yet, the contribution of the sector to the economy with respect to the foreign trade earning appears to be low in comparison to its potential and counterparts in the developed world. The objective of this study is to analyze the South African agro-processing sub-sector of the manufacturing industry trade performance in global value chains perspective and identify the potential policy recommendations to improve the sector benefit. The paper also gives an overview of South Africa’s agro-processing sector global value chains participation and the benefits from this in the form of value-added trade earning through backward linkages. The study used secondary data derived from Statistics South Africa (Stats SA); International Trade Center, COMTRADE; and Quantec EasyData (2017) and focused only on the agro-processing sector defined as food, beverage, and tobacco. The study results in general show that in each specific period the growth in real export and import values of agro-processing sub-sector of manufacturing industries has a decreasing trend with few exceptions. The results also indicate that South Africa has relatively low shares of foreign value-added products in its exports of food, beverages, and tobacco products in the agro-processing sub-sector of manufacturing industries goods.

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