Notes

experience of East Asia and Pacific and recently South Asia makes the answer clear: use the advantage of low labor costs and a large domestic labor force, perhaps just moving out of agriculture in search of employment; provide political and macroeconomic stability; and work closely with foreign investors to arrange for better local infrastructure and access to export routes. These policy lessons are actionable recommendations for national governments in many areas, such as the emphasis on bolstering investment in infrastructure and human capital and improving market and government institutions.

Finally, an initiative that can complement the AfCFTA to speed the integration of the countries in Sub-Saharan Africa would be to make Africa’s leading regional economic communities more vibrant. This could be done by granting all the countries in regional groupings such as ECOWAS, COMESA, and the SADC preferential access to leading world markets with attractive rules of origin, conditional on their taking the lead in promoting regional production networks in competitive sectors in West, Southern, Central, and East Africa. This effort might require revisiting the US African Growth and Opportunity Act and the EU’s Everything but Arms program— two preferential agreements that have been available to some LMICs since 2001. In the spirit of the G-20 Compact with Africa, a complementary aidfor-trade initiative could help bolster investment in sectors other than natural resources, to build up non-resource exports from African countries.

Notes

1. GVC participation is measured by the share of trade that crosses at least two borders (Borin and Mancini 2019). It is composed of two key indicators: backward GVC participation (the share of foreign value-added content of exports in the economy’s total gross exports) and forward GVC participation (the share of domestic value added sent to third economies in the economy’s total gross exports).“Foreign value-added content of exports” refers to the value added of inputs that were imported to produce intermediate or final goods or services to be exported. “Domestic value added” is contained in intermediate goods or services exported to a partner economy that reexports them to a third economy as embodied in other products. 2. “North America” follows the World Bank’s regional definition, comprising Bermuda, Canada, and the United States. 3. The 15 Sub-Saharan African countries covered are Benin, Burkina

Faso, Cabo Verde, Cameroon, Côte d'Ivoire, Ethiopia, The Gambia,

Ghana, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, and Togo. 4. This discussion excludes the AfCFTA, which came into operation in 2021 and is not reflected in the data, which are for 2011–15 in this study. 5. Trade in services is defined as the supply of a service through four modes, only three of which are discussed here, numbered by the

General Agreement of Trade in Services (GATS) of the World Trade