Impacting developing countries through GVCs

1. Global Value Chains (GVCs): The Good, the Bad and
the Way Forward in Ghana
On my first vacation to the UK two years ago, I got attracted to a deliciously
ripened bunch of bananas on one of the stalls at the fruit section of a local grocery
shop. I had no banana on my shopping list but I could simply not walk past without
adding a bunch to my basket. To my dismay, I found on its label: Product of Ghana!
I was so happy to see this fruit coming from my beloved country, Ghana, in West
Africa.
A lot of questions raced through my mind including:
·​ ​how the bananas got to the UK still looking fresh,

2. ·​ ​which farm in Ghana are the bananas from and
·​ ​who the lucky farmer is (because he might be making so much money).
A close look on the package of the bananas revealed a logo which I later got to
know represents Fairtrade. And it reads “Product of Ghana: Imported by
Fairtrade.
Without any idea in the field of Global Value Chains (GVCs) at that time, I did not
take any further interest as to how they got to the UK except to savour them. I
have now understood how those bananas from my home country, Ghana got to the
United Kingdom. Thanks to the World Bank Group for this course in Global Value
Chain.
The benefits derived from GVCs for both the developed and developing countries
cannot be overemphasised. Ghana for instance is a developing country and most of
the citizens can’t afford a three square meal a day. The story in the rural areas is
even worse as most of the rural folks lack basic amenities like good drinking water,
good motorable roads, well equipped medical facilities and employment. GVC related
activities are however helping change the story through the creation of jobs,
bringing development to hitherto underdeveloped communities and encouraging
more people to venture in various activities including commercial farming.
Lets delve into the activities of Fairtrade as an example. It’s main aim is “to help
producers in developing countries achieve sustainable and equitable trade
relations”. Fairtrade has given a platform for local farmers to supply them with
produce such as bananas and cocoa for export. What Fairtrade does is to buy
these farm produce from the local farmers and ship them to Europe. Through this,
there is a growth in the agribusiness sector creating more jobs in farming
resulting in better living standards.
There is also an example of a mining company, Anglogold Ashanti, whose presence in
that particular community has brought about development in the area. This
company refines gold for export and this falls under GVCs. As part of the
company’s social corporate responsibilities, it has built roads, health centres and

3. provided employment for the people. All those in this community are benefiting one
way or the other from the company.
There are however other bad sides of GVCs that need to be looked at by the
government to protect its citizens and the environment from abuse and
exploitation. An example is the wages received by some labour force involved in
GVC activities. There have been incidents where unskilled workers for example are
exploited just because there is unemployment and are therefore paid lower wages
than what they work for. They are overworked but receive low wages which is not
commensurate to the work they do. This is serious exploitation and must be
seriously looked at. Policies must be set by the government to regulate the
activities of parties involved in GVCs to promote and ensure fair grounds for all to
benefit especially the poor.
Normally it is the poor who are mostly unskilled and are ready to accept anything in
terms of wages for hard and long hours of work. They run these long hours, fall
sick and at the end of the day, what they get as wages are woefully inadequate to
cater for in medical expenses.
Another example is that some farmers are not paid what they are supposed to get
from these GVC transactions. For fear of their produce going bad, they accept any
price offered them whiles their exporters make huge profits. There should be
transparency in pricing in GVC transactions and government policies can help in this
area.
Another downside of GVC activities that need to be looked at is the exploitation of
the environment. An example is a popular site in the capital city of Ghana Accra,
called Agbogbloshie. This place is known for the dumping of electronic waste and
also for its supply of scraps by the local folks. They get these scraps by burning
these electronic gadgets which have been dumped at the site by various companies.
Their activities create massive pollution in the area. Thick smoke engulfs the
entire area every single day from their burning activities. It has been established
that many people in the area have developed several health conditions. In order to
meet their scrap demands, these people end up polluting the environment,

4. endangering their lives and the lives of everyone living in the community. This is a
serious aspect of GVCs and needs to be tackled by the government.
The following are some measures that can be employed to enhance GVC activities in
Ghana as well as in other developing countries:
1. Education on GVCs should be highly sensitized. If GVCs can help create jobs
and help better the lives of the poor, then everyone including the poor
should be given training on what it takes to participate in GVC activities. It
is my suggestion that GVCs be made part of the secondary school curricular
so the students can have an idea early in their lives. This can even help those
who are not able to continue to the tertiary levels venture into something
profitable in the area of GVCs.
2. There should be pragmatic measures to help farmers grow the agri sector.
This is because agriculture contributes to 54% of Ghana’s GDP, and accounts
for over 40% of export earnings (SRID, 2001). There should be sustained
assistance from the government to help farmers stay in business. Areas such
as irrigation can be made available by the government. National Extension
Officers can be employed to assist farmers in areas they might be lacking.
3. Policies must be set to cater for fair wages especially among the unskilled
labour force. 52% of Ghana’s labour force is engaged in agriculture (SHRID,
2001). They therefore need to be protected. There should be stringent
measures to check exploitation of this huge labour force.
4. The government must enforce regulations that seek to protect the
environment against exploitation. There should be severe fines and penalties
against firms whose activities exploit and degrade the environment. For
instance the activities of some mineral refinery companies pollute our water
bodies. There should be a task force to ensure that measures against such
bad practices are enforced.
The government needs to streamline the activities of GVCs in order for the gains
to far outwit the losses. It is only through this that the country, firms and
individuals especially the poor can benefit from Global Value Chains.