African countries are exploring opportunities to add more value to their critical raw materials f... more African countries are exploring opportunities to add more value to their critical raw materials for green industrialisation. This paper assesses the potential for an African lithium-ion battery value chain as a case.
It argues that while green industrialisation ambitions hold promising new prospects for African economies, they nonetheless add another layer of complexity to already existing challenges. The interplay of actors and interests at different levels collectively influences these ‘green windows of opportunity’.
Presently, African countries mainly supply raw materials in the global battery value chain, while China leads in both manufacturing and innovation. The US and the EU strive to catch up, but it is unclear how their geostrategic goals support African industrialisation.
African processing and manufacturing for batteries will depend on establishing a regional value chain, supported by the African Continental Free Trade Area. But this requires overcoming the structural, institutional and coordination challenges that have limited regional industrialisation in the past. At the same time, there is a need for effective implementation of policies at the national level. This involves using limited resources to build domestic capabilities through robust industrial policies while balancing diverse interests and incentives.
To capitalise on opportunities at different stages of the value chain, African countries should (i) improve mining potential for socio-economic development, (ii) implement targeted industrial policy to develop capabilities in the battery value chain, (iii) ensure market access to maximise export potential, (iv) proactively position themselves amid geopolitical competition between great powers, and (v) involve private sector actors early in the process.
Mozambique has signed and recently ratified the African Continental Free Trade Area (AfCFTA) agre... more Mozambique has signed and recently ratified the African Continental Free Trade Area (AfCFTA) agreement. This study review's the country's experience of the Southern African Development Community (SADC) Protocol on Trade in Goods and draws lessons for designing AfCFTA-related policies. Collected evidence suggests that, while imports to Mozambique have been rising, much of this is from outside Africa, while imports from the region are arguably not driven by the SADC free trade agreement (FTA) per sé. Administrative, logistic and infrastructure hurdles have limited the use of the SADC FTA and thus its impact, while evidence suggests that the main tariff reductions led to lower levels of misreporting and border corruption rather than increasing import volumes. Although this does not preclude some competition from SADC imports, it implies that the overall effect of the SADC FTA has been limited in terms of displacing industries or stimulating structural change. Mozambican exports to South Africa and the region grew over the SADC FTA implementation period but these relate primarily to the extractive sectors. Nonetheless, Mozambique has seen some 'new' export products over the last 15 years, with documented cases of small-scale SADC-focused investments. These examples, and the challenges of using the SADC FTA should offer guidance for taking advantage of the AfCFTA. The paper concludes that the political momentum around the AfCFTA and recent industrial policy efforts can, and should, be used as a tool to promote job-creating exports to SADC and the continent through a problemsolving approach to promote further export development.
Nigeria's position on regional integration can appear inconsistent, despite having ratified the A... more Nigeria's position on regional integration can appear inconsistent, despite having ratified the African Continental Free Trade Area and its commitment to achieving a customs union through ECOWAS. For example, in 2019, it unilaterally closed its land borders with neighbouring countries, causing major disruptions to regional trade networks. This in turn negatively affected the trade facilitation efforts promoted by development partners to
The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present time... more The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present timely, concise assessments of current economic trends in Mozambique in light of the country's broader development challenges. Each edition includes a section on recent economic developments and a discussion of Mozambique's economic outlook and constraints to growth, followed by a focus section analyzing an issue of particular importance. The focus section for this edition evaluates Mozambique's evolving fiscal risks in a context of rising public investment. The MEU series seeks both to inform discussions within the Bank and to contribute to a robust debate among government officials, the country's international development partners, and civil society regarding Mozambique's economic performance and key macroeconomic policy challenges.
The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present time... more The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present timely, concise assessments of current economic trends in Mozambique in light of the country's broader development challenges. Each edition includes a section on recent economic developments and a discussion of Mozambique's economic outlook and constraints to growth, followed by a focus section analyzing an issue of particular importance. The focus section for this edition evaluates Mozambique's evolving fiscal risks in a context of rising public investment. The MEU series seeks both to inform discussions within the Bank and to contribute to a robust debate among government officials, the country's international development partners, and civil society regarding Mozambique's economic performance and key macroeconomic policy challenges.
Les échanges commerciaux intra-africains sont dans une large mesure informels, à petite échelle, ... more Les échanges commerciaux intra-africains sont dans une large mesure informels, à petite échelle, transfrontaliers et non comptabilisés. L'importance du commerce informel transfrontalier (CIT) et de fait la nécessité d'en tenir compte dans les politiques publiques est de plus en plus reconnue, notamment en raison de la place prépondérante qu'y occupent les femmes. La dimension du CIT que les programmes d'appui extérieurs cherchent à traiter et les raisons qui les poussent à le faire ne sont, en revanche, pas très claires. Cette étude se penche sur le « problème » du CIT et la façon de le « traiter ». Au travers d'un examen des perspectives des commerçants, de l'État et des agents frontaliers, elle met en exergue les contextes complexes et les produits idiosyncrasiques du CIT ; il en ressort que le commerce informel tient moins de l'anomalie-comme le suggère la politique commerciale officielle-que d'une gamme de combinaisons possibles, qui sont les produits de l'interaction entre commerçants et agents frontaliers, dans le cadre d'un système plus large. Les aspects visibles du CIT qui semblent entraver la formalisation ne sont que la partie visible de l'iceberg, alors qu'une série de facteurs et de relations importants, mais sous la surface, conditionnent et perpétuent cette pratique. Notre conclusion est que les approches qui ciblent directement le CIT (sous l'angle du renforcement des capacités ou de la simplification des procédures complexes aux frontières, par exemple) peuvent, certes, infléchir dans une certaine mesure les dynamiques existantes, mais qu'elles ont peu de chances de modifier les incitations au commerce informel eu égard aux relations structurelles qui le sous-tendent. Le CIT étant conditionné par des facteurs contextuels spécifiques, il convient d'entrevoir des approches propres à chaque zone frontalière. Bien qu'elles s'inscrivent dans un horizon temporel plus long, des approches plus indirectes pourraient se concentrer sur la création d'alternatives économiques.
While trade and transport costs in Africa are high, those faced in Malawi are higher than in the ... more While trade and transport costs in Africa are high, those faced in Malawi are higher than in the wider region. International partners are keen to invest in improving trade and transportation, with a view to promoting socio-economic development in the region, but trade and transport are highly political in both Malawi and Mozambique. This study maps out the different factors and actors that shape current use of the Nacala and Beira corridors connecting Malawi to the Mozambican coast. High-level political relations have fluctuated through time, and though cordial, do not provide a solid basis for improving efficiency along the Nacala rail corridor, with domestic priorities on both sides dominating cross-border cooperation. Thus far, Beira has emerged in Mozambique as the more efficient port serving Malawi and the wider region where state-business relations have aligned with political objectives. Nacala has been made efficient for coal exports but coordination for other trade is lacking, with political interests more geared towards a competition for control of rents. Mozambican road transporters have also the upper hand over Malawian transport, though the market is highly segmented for imports and exports and different goods. External support to improve efficiency will need to take account of the vested state-business interests round the ports and corridors, particularly in Mozambique, and rekindle multi-actor cross-border coordination mechanisms, ideally including different government bodies, private service providers as well as businesses engaged in exports/imports, and learning from past failures to coordinate better.
African countries are exploring opportunities to add more value to their critical raw materials f... more African countries are exploring opportunities to add more value to their critical raw materials for green industrialisation. This paper assesses the potential for an African lithium-ion battery value chain as a case.
It argues that while green industrialisation ambitions hold promising new prospects for African economies, they nonetheless add another layer of complexity to already existing challenges. The interplay of actors and interests at different levels collectively influences these ‘green windows of opportunity’.
Presently, African countries mainly supply raw materials in the global battery value chain, while China leads in both manufacturing and innovation. The US and the EU strive to catch up, but it is unclear how their geostrategic goals support African industrialisation.
African processing and manufacturing for batteries will depend on establishing a regional value chain, supported by the African Continental Free Trade Area. But this requires overcoming the structural, institutional and coordination challenges that have limited regional industrialisation in the past. At the same time, there is a need for effective implementation of policies at the national level. This involves using limited resources to build domestic capabilities through robust industrial policies while balancing diverse interests and incentives.
To capitalise on opportunities at different stages of the value chain, African countries should (i) improve mining potential for socio-economic development, (ii) implement targeted industrial policy to develop capabilities in the battery value chain, (iii) ensure market access to maximise export potential, (iv) proactively position themselves amid geopolitical competition between great powers, and (v) involve private sector actors early in the process.
Mozambique has signed and recently ratified the African Continental Free Trade Area (AfCFTA) agre... more Mozambique has signed and recently ratified the African Continental Free Trade Area (AfCFTA) agreement. This study review's the country's experience of the Southern African Development Community (SADC) Protocol on Trade in Goods and draws lessons for designing AfCFTA-related policies. Collected evidence suggests that, while imports to Mozambique have been rising, much of this is from outside Africa, while imports from the region are arguably not driven by the SADC free trade agreement (FTA) per sé. Administrative, logistic and infrastructure hurdles have limited the use of the SADC FTA and thus its impact, while evidence suggests that the main tariff reductions led to lower levels of misreporting and border corruption rather than increasing import volumes. Although this does not preclude some competition from SADC imports, it implies that the overall effect of the SADC FTA has been limited in terms of displacing industries or stimulating structural change. Mozambican exports to South Africa and the region grew over the SADC FTA implementation period but these relate primarily to the extractive sectors. Nonetheless, Mozambique has seen some 'new' export products over the last 15 years, with documented cases of small-scale SADC-focused investments. These examples, and the challenges of using the SADC FTA should offer guidance for taking advantage of the AfCFTA. The paper concludes that the political momentum around the AfCFTA and recent industrial policy efforts can, and should, be used as a tool to promote job-creating exports to SADC and the continent through a problemsolving approach to promote further export development.
Nigeria's position on regional integration can appear inconsistent, despite having ratified the A... more Nigeria's position on regional integration can appear inconsistent, despite having ratified the African Continental Free Trade Area and its commitment to achieving a customs union through ECOWAS. For example, in 2019, it unilaterally closed its land borders with neighbouring countries, causing major disruptions to regional trade networks. This in turn negatively affected the trade facilitation efforts promoted by development partners to
The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present time... more The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present timely, concise assessments of current economic trends in Mozambique in light of the country's broader development challenges. Each edition includes a section on recent economic developments and a discussion of Mozambique's economic outlook and constraints to growth, followed by a focus section analyzing an issue of particular importance. The focus section for this edition evaluates Mozambique's evolving fiscal risks in a context of rising public investment. The MEU series seeks both to inform discussions within the Bank and to contribute to a robust debate among government officials, the country's international development partners, and civil society regarding Mozambique's economic performance and key macroeconomic policy challenges.
The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present time... more The World Bank's biannual Mozambique Economic Update (MEU) series is designed to present timely, concise assessments of current economic trends in Mozambique in light of the country's broader development challenges. Each edition includes a section on recent economic developments and a discussion of Mozambique's economic outlook and constraints to growth, followed by a focus section analyzing an issue of particular importance. The focus section for this edition evaluates Mozambique's evolving fiscal risks in a context of rising public investment. The MEU series seeks both to inform discussions within the Bank and to contribute to a robust debate among government officials, the country's international development partners, and civil society regarding Mozambique's economic performance and key macroeconomic policy challenges.
Les échanges commerciaux intra-africains sont dans une large mesure informels, à petite échelle, ... more Les échanges commerciaux intra-africains sont dans une large mesure informels, à petite échelle, transfrontaliers et non comptabilisés. L'importance du commerce informel transfrontalier (CIT) et de fait la nécessité d'en tenir compte dans les politiques publiques est de plus en plus reconnue, notamment en raison de la place prépondérante qu'y occupent les femmes. La dimension du CIT que les programmes d'appui extérieurs cherchent à traiter et les raisons qui les poussent à le faire ne sont, en revanche, pas très claires. Cette étude se penche sur le « problème » du CIT et la façon de le « traiter ». Au travers d'un examen des perspectives des commerçants, de l'État et des agents frontaliers, elle met en exergue les contextes complexes et les produits idiosyncrasiques du CIT ; il en ressort que le commerce informel tient moins de l'anomalie-comme le suggère la politique commerciale officielle-que d'une gamme de combinaisons possibles, qui sont les produits de l'interaction entre commerçants et agents frontaliers, dans le cadre d'un système plus large. Les aspects visibles du CIT qui semblent entraver la formalisation ne sont que la partie visible de l'iceberg, alors qu'une série de facteurs et de relations importants, mais sous la surface, conditionnent et perpétuent cette pratique. Notre conclusion est que les approches qui ciblent directement le CIT (sous l'angle du renforcement des capacités ou de la simplification des procédures complexes aux frontières, par exemple) peuvent, certes, infléchir dans une certaine mesure les dynamiques existantes, mais qu'elles ont peu de chances de modifier les incitations au commerce informel eu égard aux relations structurelles qui le sous-tendent. Le CIT étant conditionné par des facteurs contextuels spécifiques, il convient d'entrevoir des approches propres à chaque zone frontalière. Bien qu'elles s'inscrivent dans un horizon temporel plus long, des approches plus indirectes pourraient se concentrer sur la création d'alternatives économiques.
While trade and transport costs in Africa are high, those faced in Malawi are higher than in the ... more While trade and transport costs in Africa are high, those faced in Malawi are higher than in the wider region. International partners are keen to invest in improving trade and transportation, with a view to promoting socio-economic development in the region, but trade and transport are highly political in both Malawi and Mozambique. This study maps out the different factors and actors that shape current use of the Nacala and Beira corridors connecting Malawi to the Mozambican coast. High-level political relations have fluctuated through time, and though cordial, do not provide a solid basis for improving efficiency along the Nacala rail corridor, with domestic priorities on both sides dominating cross-border cooperation. Thus far, Beira has emerged in Mozambique as the more efficient port serving Malawi and the wider region where state-business relations have aligned with political objectives. Nacala has been made efficient for coal exports but coordination for other trade is lacking, with political interests more geared towards a competition for control of rents. Mozambican road transporters have also the upper hand over Malawian transport, though the market is highly segmented for imports and exports and different goods. External support to improve efficiency will need to take account of the vested state-business interests round the ports and corridors, particularly in Mozambique, and rekindle multi-actor cross-border coordination mechanisms, ideally including different government bodies, private service providers as well as businesses engaged in exports/imports, and learning from past failures to coordinate better.
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Papers by Poorva Karkare
It argues that while green industrialisation ambitions hold promising new prospects for African economies, they nonetheless add another layer of complexity to already existing challenges. The interplay of actors and interests at different levels collectively influences these ‘green windows of opportunity’.
Presently, African countries mainly supply raw materials in the global battery value chain, while China leads in both manufacturing and innovation. The US and the EU strive to catch up, but it is unclear how their geostrategic goals support African industrialisation.
African processing and manufacturing for batteries will depend on establishing a regional value chain, supported by the African Continental Free Trade Area. But this requires overcoming the structural, institutional and coordination challenges that have limited regional industrialisation in the past. At the same time, there is a need for effective implementation of policies at the national level. This involves using limited resources to build domestic capabilities through robust industrial policies while balancing diverse interests and incentives.
To capitalise on opportunities at different stages of the value chain, African countries should (i) improve mining potential for socio-economic development, (ii) implement targeted industrial policy to develop capabilities in the battery value chain, (iii) ensure market access to maximise export potential, (iv) proactively position themselves
amid geopolitical competition between great powers, and (v) involve private sector actors early in the process.
It argues that while green industrialisation ambitions hold promising new prospects for African economies, they nonetheless add another layer of complexity to already existing challenges. The interplay of actors and interests at different levels collectively influences these ‘green windows of opportunity’.
Presently, African countries mainly supply raw materials in the global battery value chain, while China leads in both manufacturing and innovation. The US and the EU strive to catch up, but it is unclear how their geostrategic goals support African industrialisation.
African processing and manufacturing for batteries will depend on establishing a regional value chain, supported by the African Continental Free Trade Area. But this requires overcoming the structural, institutional and coordination challenges that have limited regional industrialisation in the past. At the same time, there is a need for effective implementation of policies at the national level. This involves using limited resources to build domestic capabilities through robust industrial policies while balancing diverse interests and incentives.
To capitalise on opportunities at different stages of the value chain, African countries should (i) improve mining potential for socio-economic development, (ii) implement targeted industrial policy to develop capabilities in the battery value chain, (iii) ensure market access to maximise export potential, (iv) proactively position themselves
amid geopolitical competition between great powers, and (v) involve private sector actors early in the process.