Linking Southern Africa to South Africa's exports: New opportunities for regional value chains

Karishma Banga and Neil Balchin

The World Economy, 2023, vol. 46, issue 2, 346-362

Abstract: This study explores the potential for South Africa to become an engine for intra‐regional trade and industrial development in Southern Africa. It focuses on new backward linkages that can be created from South African exports of final products to producers of intermediate inputs in other Southern African countries. We do so by identifying South Africa's lead products, where it has formed its own GVCs, and, in turn, earmarking intermediate inputs used in the production of these lead products. Using Revealed Comparative Advantage and Unit Cost analysis, we identify Southern African countries that could supply the identified imported intermediate inputs more competitively than South Africa's existing partners and kickstart regional integration. We explore issues around the nature of linkages, supplier capabilities and industrial policies in the region, with special reference to the identified product value chains. Focusing on the agricultural sector—a key regional priority with immense potential for industrial growth and large‐scale employment—we also identify existing agricultural lead products in South Africa, and the ‘new markets’ to which South Africa can export.

Date: 2023
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