Trade in intermediates, mission-oriented policies and the African Continental Free Trade Area

Abstract

The fragmentation of production has delivered the phenomenon of production networks that transcend national borders. While the phenomenon of production networks is global, such networks are largely regional and have led to a significant growth of trade in intermediate goods, which has grown in both breadth and depth, notably in the European Union and East Asia. This trade carries potentially beneficial lessons for the nascent African Continental Free Trade Area (AfCFTA) initiative. Against this plausibility, I call for African governments to intentionally develop capacity and capabilities for participation in the production and assembly of components of defined capital and consumer end-products as a core activity of delivering the AfCFTA. In that respect, I propose the adoption of a mission-orientated policy regime as a critical approach to Africa overcoming numerous contemporary global crises, including financial, climate, health and war challenges that have and will continue to limit the continent's development aspirations. I posit that mission-oriented policies are critical for ensuring that countries worldwide, and Africa especially, strengthen their economic resilience and fully exploit their competitive advantages.