Evolution of Sourcing Patterns for Intermediate Inputs among Manufacturing Firms

enterprises are likely to operate under a foreign technology license include Nigeria, Uganda, and Zambia.

Industries with enterprises in this category include transport equipment and electrical and machinery. Those enterprises with backward or forward links to manufacturing GVCs in transport equipment are in Côte d’Ivoire and Malawi; the Democratic Republic of Congo, Ghana, and Zambia; and Indonesia and Vietnam among the comparators. Those with forward or backward links to GVCs in electrical and machinery are in Côte d’Ivoire, South Africa and Zambia, and the comparator country, Bangladesh.

In addition, when considering enterprises with forward or backward links to manufacturing GVCs, Kenya, South Africa, and Zambia have links in metals products, as do Bangladesh, Cambodia, and Vietnam. Participants in GVCs in manufacturing chemicals and non–minerals and metals products include Malawi and Kenya; the Democratic Republic of Congo, South Africa, and Zambia; and Cameroon.

Evolution of Sourcing Patterns for Intermediate Inputs among Manufacturing Firms

Domestic Markets as Sources of Intermediate Inputs

Manufacturers in Sub-Saharan Africa have relied more on domestic intermediates in the organization of manufacturing production, with significant variation across countries, accounting for 77 percent in Djibouti, 66 percent in Rwanda, and more than 50 percent in Cameroon, Guinea, Madagascar, Mali, and Mauritania (figure 4.10). Overall, the share of domestically sourced inputs, on average, is 48 percent; the share of imported intermediate inputs is 14 percent; and the share of value added created domestically is 38 percent.

Overall, countries in the region differ in the sources of inputs for producing manufactures, but the share of imported inputs varies less across countries, except in Zambia. Botswana, Mauritius, and Namibia seem to have a more balanced structure in the sources of inputs for manufacturing.

Multinational Firms Source Intermediate Inputs from Domestic Firms

Small manufacturing firms import about 22 percent of their inputs, a share that has increased steadily over time. Multinational firms in the region are more active in international engagement than domestic firms. Still, a sizable share of intermediate inputs (44 percent) used by multinational firms is sourced from domestic firms in the region. However, domestic sourcing by multinationals in the region has weakened in recent years (figure 4.11).