Global Value Chains Participation for African Countries: An Overview from UIBE GVC Index System

This paper analyzes the pattern of trade in value-added in Africa using a comprehensive database from the Research Institute for Global Value Chains at the University of International Business and Economics. We find that African economies absorb more foreign inputs in complex GVCs compared to their domestic factor content exported in simple GVCs. In addition, Southern Africa and North Africa are respectively top exporter and importer in simple GVCs while West Africa ingest the largest proportion of intermediate goods coming from abroad in complex GVCs. The secondary sector has the highest level of integration in absorbing foreign inputs. Finally, African countries, albeit weakly, are involved in downstream specialization particularly in Western and Eastern Africa.


Introduction
The aim of this paper is to provide an overview of the pattern of global value chains participation in Africa. The interest in this continent comes from the fact that very few studies are exclusively devoted to it. The main reason is probably the lack of suitable and available data on trade in value-added. However, research which has been conducted so far use Eora database (e.g. [1] [2]). The Africa competitiveness report 2015 by African Development Bank and its international partners such OECD, WEF, World Bank (see [3]) relies on the value chains breadth from World Economic Forum 1 . Although these previous works 1 offer critical insights regarding the evolution of value chains within Africa, they are nevertheless limited.
In the context of the increased prevalence of cross-border production chains and where the participation in GVCs of developing countries is vital for their structural transformation (see e.g. [4]- [10]), it is worthwhile to understand how evolves international fragmentation of production among African countries particularly. To the best of our knowledge, the index system from Research Institute for Global Value Chains at University of International Business and Economics (UIBE) presents a better decomposition of trade in value-added. The understanding of this paradigm in Africa is conducive to implement a "new generation" of trade policies that allow to fully capture the benefits of the global production sharing.
The remainder is as follows: Section 2 briefly explains the specificity of the UIBE GVC database; Section 3 assesses the participation in simple and complex GVC; Section 4 explores the position in GVC; Section 5 is the conclusion.

A Brief Explanation of UIBE GVC Index System
Since the prevalence of international fragmentation of production, different measurements have been used to quantify trade in sequential activities. The existing indicators present some major limits (e.g. double counting problem and lack of uniformity). To overcome these drawbacks, Research Institute for Global Value Chains at University of International Business and Economics (UIBE) has developed a comprehensive set of accounting indexes to describe with accuracy the origin and destination of the factor content 2 . For the purpose of this study, we focus on three characteristics of the so-called UIBE GVC index system (see Appendix).
First, the index system decomposes GDP by country and by sector taking into account the forward and backward linkages as proposed by [11]. The forward linkage represents the trading relationship where a country, known as a supplier, exports domestic value-added to another country for export processing or final consumption. Similarly, the backward linkage denotes in which extent a local economy imports foreign value-added for its own consumption or for export processing.
Second, the Research Institute have decomposed total value-added into simple and complex GVC. The simple GVC stands for domestic/foreign value-added which is exports/imports and directly absorbed by trading partner. By contrast, complex GVC symbolizes domestic/foreign value-added crossing at least two borders and finally consumed abroad 3 . Thus, associated with the forward and backward linkages, simple and complex GVC allow identifying where value-added comes from and whether it is directly or indirectly ingested by others players along the value chain. 2 The construction of this comprehensive database is not only based on the Inter-Country Input-Output (ICIO) tables and the System of National Accounts (SNA) standard, but also on the outstanding papers by [12] [13] [14] [15]. For further information, visit: http://rigvc.uibe.edu.cn/english/D_E/database_database/index.htm. Open Journal of Business and Management The third characteristic is the production line position index. Following the works by [16] and [17], the Research team has set up two indexes showing for every single sector its position in upstream activities (Antras and Fally Upstreamness index) as well in downstream activities (Antras and Chor Downstreamness index). In clear terms, being in upstream position basically means that a country is engaged in the first stages of production and its participation in forward linkage might be higher than the participation in backward linkage. Inversely, being involved in downstream activities refers to specialization in the last steps of production and therefore the highest GVC participation comes from backward linkage. In this study, we make the difference between upstreamness

Simple and Complex GVC within African Countries
The analysis of Figure 1 shows that the supply side of value chains in simple GVC within African countries accounts for on average 12 percent while the demand side of value chains is 10 percent on average. By contrast, the tendency is reversed when it comes to complex GVC: it clearly appears that forward participation stands at 7 percent on average whereas backward participation is on average 16 percent.
On the whole, this suggests that the share of domestic value-added to export for direct partners is larger than the proportion of imported foreign inputs consumed in Africa. On the other hand, given that the percentage of foreign value-added exceeds the one of domestic inputs involved in complex activities, the

Simple GVC within African Regions 4
As shown in Figure 2, Southern Africa is the most engaged in forward linkage with a participation of 15% on average. North Africa is second in the supply side of value chains (13%). West and East Africa are involved in domestic value-added to export toward direct partners respectively with 11% and 10%. Central Africa is the least engaged in simple GVC (7%).
For backward participation, we observe that North Africa with 12% is the first importer of foreign inputs. The level of involvement of West and Central Africa is 11%. Southern Africa exhibit a participation of 10% and East Africa has the lowest engagement (9%).

Simple GVC by Country within Regions
In North Africa (Figure 3), the highest participation (20%) in domestic value-added to export toward direct partners is observed in Tunisia. Morocco is second with 11% and the least involved is Egypt (8%). By contrast, this latter imports the largest share of foreign inputs (14%) that is consumed domestically.   percent. On the contrary, the highest share of foreign value-added and consumed domestically goes to Ethiopia and Tanzania (both 10%).
In Central Africa (Figure 6), the engagement of Cameroon is only 7%. By contrast, the Cameroonian economy absorbs directly 11 percent of the foreign inputs.
In Southern Africa (Figure 7), Mauritius and Madagascar are the largest exporters of domestic factor content (20%) directly consumed by importers. The second largest exporter is Namibia with 19 percent followed by Zambia and

Simple GVC by Sector within Regions
North Africa

West Africa
As shown in Figure 9, the second sector has the highest participation in simple forward linkage (13%) particularly in metals and ferrous metals industries.
By contrast, the tertiary sector is the most engaged in simple backward participation, i.e., countries within this region import the largest proportion of foreign inputs consumed domestically. The sectors concerned are: air transportation, water transportation, electricity and other transportation.
We observe also that the primary sector in West Africa is the least involved in both forward (8%) and backward GVC participation (6%).

Southern Africa
The analysis of Figure 12 shows that the three main sectors are strongly involved in forward participation. We observe that the secondary sector exports 16% of domestic factor content directly absorbed abroad particularly within metals, ferrous metals and chemical rubber plastic products. The primary (minerals, cotton and wool production, and oil and gas) and tertiary (gas manufacture and distribution, air transportation and water transportation) have the same percentage of engagement (14%).
For the backward linkage, the tertiary sector ingests the highest proportion of Figure 11. Simple GVC participation by sector (Central Africa).   Figure 13 clearly shows that Africa, on the whole, is chiefly an importer of foreign value-added that crosses more than two borders. The most involved region is West Africa with 17% followed by North Africa importing 16%. Southern

Complex GVC within African Regions
Africa absorbs 16% and the participation of East Africa is 14 percent. Central Africa has the lowest engagement in complex GVC (10%).
We also notice that the engagement in complex forward linkage is nearly insignificant for most African regions except Southern Africa that is 9 percent.

Complex GVC by Country within Regions
The analysis of Figure    and Uganda display 13% while Rwanda and Ethiopia respectively account for 12% and 11%.
In Central Africa (Figure 17), the engagement of Cameroon in supplying value-added that crosses at least two borders is very low (3%). Conversely, the share of foreign inputs that straddles minimum two borders and finally consumed in the domestic economy is 10 percent.
In Southern Africa (Figure 18)   Mozambique and Zambia absorb 17%. South Africa with 10% lags behind Botswana and Malawi (15% for both) and Namibia (14%). On the other hand, within Southern Africa the highest participation in complex supply side of value chains is observed in Zambia (18%) and Zimbabwe (12%).

Complex GVCs by Sector within Regions
North Africa Figure 19 reveals that the secondary sector (e.g. ferrous metals, machinery and equipment, and metals) is the most engaged in complex demand side of value chains (21%). The primary sector (e.g. coal and forestry) has also an important Open Journal of Business and Management  West Africa Figure 20 shows that the secondary sector (e.g. motor vehicles and parts, electronic equipment and petroleum coal products) ingests the highest share of foreign value-added in complex GVC trade (24%). Another high participation (16%) comes from the primary sector (e.g. coal, oil and gas, and minerals). The engagement of the tertiary sector is simply insignificant.

East Africa
In Figure 21 we observe that the level of participation in complex backward linkage is similar (18%) for the primary sector (e.g. coal, and oil and gas) and the   secondary sector (petroleum coal products, ferrous metals and metals). The tertiary sector still lags behind compared to the two previous ones.

Central Africa
The sectoral analysis among the economy of Cameroon in Central Africa

Position in GVC
In overall, Africa is on average weakly involved in downstream specialization as shown the GVC position in Table 1   With respect to East Africa (Figure 26), Uganda is the only country involved in upstream production while the rest of economies are engaged in downstream specialization. We observe that most countries in this region of Africa consume the largest proportion of value-added coming from abroad.
In Central Africa (Figure 27), Cameroon is mainly engaged in downstream production. In others terms, the economy of Cameroon imports a larger quantity of foreign valued-added for domestic consumption than it exports.
In Southern Africa (Figure 28), two countries (Malawi and Mozambique) out

Conclusions
The world economy is currently driven by the paradigm of trade in value-added commonly known as global value chains (GVCs To this end, we focus on three indexes: the first presents the simple GVC participation in forward and backward linkages; the second deals with the engagement in complex GVCs in forward and backward linkages as well; the last one highlights the countries' position along the value chain.
Our analysis points out that, on the whole, Africa exports more domestic value-added than it absorbs by importing foreign factor content in simple GVCs.
By contrast, the continent consumes the larger proportion of value-added involved in complex GVCs. At the regional level, Southern Africa exports the highest share of domestic value-added to direct partners but North Africa is the On the whole, African economies are engaged albeit weakly in downstream specialization. However, the analysis reveals some facts that deserve a deepened understanding. For instance, two countries with forward participation higher than backward participation, one is located in downstreamness and another in upstreamness. We observe a similar situation when the integration in backward linkage exceeds the one of forward participation.