1. DIGITAL ARTIFACTS: GVC AND LIBERIA CASE STUDY
WBGx WDR2001xTrading for Development in the Age of Global Value Chains - WDR 2020
ADWOA PREMPEH SEPTEMBER 2020
3. OBJECTIVES
Global value Chains offer new economic opportunities to African countries
that are no longer obliged to set up entire production units, but can now
integrate themselves as links in such value chains. In this way developing
countries can align with countries to produce goods and services across
borders. Liberia stands to benefit if policies are properly placed and
implemented fully because SMEs don’t not have finance to purchase
machine to produce on a large skill for export and so to add value to
products like almost impossible. Example to increase agro-processing,
value addition and exports requires a lot of cash.
4. TARGET AUDIENCE
Business Sector
Partners & Stakeholders
Policy Makers
Finance Exporter as well as importer
Promote policies that governs Global value chains (GVCs) so
Exporters, Importers and the country can benefit.
Government should sign memorandum of understanding (MoU) with
firms in other countries to export raw material.
5. INTRODUCTION TO GVCS
Production of goods and services was increasingly
globalized from 1990 to 2008. The process was more
pronounced in some regions and sectors than in others as
firms began to organize their production in complex global
value chains (GVCs).
They designed products in one country, procured parts and
components from several countries, and assembled the final
products in yet another country. As a result, international
trade and investment flows increased considerably, far
outpacing the growth of economic output.
1990 -
2008
• However, with the 2008 global financial
crisis and the great recession that
followed, the growth of GVCs and trade
slowed, prompting speculation that the
phenomenon had run its course.
2008
+
6. DEFINITION OF GVC
A global value chain (GVC) is the series of stages in the production
of a product or service for sale to consumers. Each stage adds value,
and at least two stages are in different countries.
Regardless of the shape of GVCs, the possibility of fragmenting
production across borders gives rise to a finer international division
of labor and greater gains from specialization. GVCs allow
resources to flow to their most productive use, not only across
countries and sectors, but also within sectors across stages of
production. As a result, GVCs magnify the growth, employment,
and distributional impacts of standard trade.
7. KEY CHALLENGES
Promote political stability and
improve policy predictability; pursue
deep trade agreements
Adopt supportive investment policy
and improve the business climate.
Lower tariffs are important, including
zero-tariff treatment of regional
partners through trade agreements.
Government should sign
memorandum of understanding
(MoU) with firms in other countries to
export raw material.
Policies that promote linkages, build
managerial capabilities, and facilitate
upgrading of domestic SMEs.
Adam Smith’s Comparative
Advantage… Does this fit Portugal’s
long term policy?
8. GVC IN LIBERIA
Substantial economic gains
possible with production of value-
added goods
Some goods have well-
established regional
competitors (ex: cocoa
butter, cocoa paste, palm
kernel oil)
For other goods, Liberia
can emerge as a regional
leader
Côte d’Ivoire Ghana Senegal World Imports
Palm kernel cake 2,000 807 1 1,384,000
Palm kernel oil 12,000 117,000 - 2,881,000
Cocoa butter 265,000 66,000 - 3,446,000
Cocoa paste 542,000 476 Unavailable 2,392,000
Cocoa powder and
cake
88,000 483 212 3,291,000
Coffee, roasted 15 6 104 8,486,972
Cassava starch 15 - 45 1,338,688
Feed, vegetable
products
- Unavailable - 904,644
9. GVC LIBERIA: PATH OF INCREASE AGRO-PROCESSING, VALUE
ADDITION, AND EXPORTS REQUIRES
1. Improve technical knowhow and equipment for generating value-added products
Oil palm: Palm kernel oil and cake require machinery for palm kernel cracking and processing
2. Improve infrastructure
Bad roads raise costs every time product needs to be transported (farm value chain actor market)
Poor road connectivity inhibits access to markets
3. Increase availability of loans & financial products for farmers and agribusinesses
Commercial banks concentrated in Monrovia
Difficult for producers to meet collateral requirements or show creditworthiness
4. Strengthen farmer organization, regulation, marketing activities
Cocoa producers tend to export through informal networks at sub-optimal prices
Regulatory mechanisms for quality assurance still developing (ex: sanitary conditions, crop grades,
sustainability certification).
