[ACCI-CAVIE] Africa exports enormous volumes of raw materials, yet captures only part of the value created from them. The obvious response is to transform more locally. But for a company, the real question is more demanding: what should be processed, where, for which market and with which partners? The AfCFTA expands the field of possibilities. It does not, however, tell businesses where value can be captured most profitably. That remains a strategic question.
Processing is not automatically value creation
For an African producer, moving from raw cocoa to cocoa butter, from cotton to textiles or from minerals to processed inputs may appear to be the logical next step. Yet each additional stage introduces new costs, standards, technologies, financing needs and commercial risks. A processing project can therefore be technically viable without being commercially attractive. The critical question is not simply whether a product can be processed, but whether the additional value created will compensate for the additional complexity. This requires knowing the target market, its demand, competitors, standards, distribution channels and purchasing conditions before committing significant capital.
The market should come before the factory
This is where many value-upgrading strategies can become exposed. The instinct is often to secure equipment and financing first, then search for buyers. A more secure sequence begins with the market. Which African market offers the strongest demand? Where are competitors positioned? Which standards apply? Which partners control distribution? What will logistics actually cost? Which regulatory changes could alter the business case?
These questions can change the investment decision itself. A company may discover that exporting a higher-value intermediate product is more attractive than manufacturing a finished good, that a partnership is preferable to building new capacity, or that another African market offers better conditions for the next stage of the chain.
The AfCFTA creates a larger commercial space, but market access is not market knowledge. The latter has to be built.
The information gap can become the investment risk
A value-chain strategy can look convincing when based on sector statistics and projections. But national production figures do not identify the buyers most likely to purchase the finished product. Market growth does not reveal who will capture it. A list of competitors does not show which ones control the decisive relationships. For a company preparing an investment, these gaps matter. Before deciding where to process, it may need to monitor competitors, prices, regulations, standards, potential partners and demand signals across several markets. The objective is not to collect more information, but to determine which information could change the decision.
The subject is already part of the CAVIE’s current field of work. For CAVIE Open Universities 2026, the Centre placed due diligence, sectoral monitoring and regional market mapping among the pillars intended to help African businesses navigate cross-border value chains under the AfCFTA. The underlying logic is straightforward: before deciding where to transform, an organisation needs to know where, for whom and under what conditions value can actually be captured.
The question is no longer whether Africa should process more
The question is where, how and for whom processing can create a defensible competitive advantage. For companies considering a new production unit, a strategic partnership or expansion into another African market, the quality of the decision will depend increasingly on the quality of the information available before the investment is made.
The AfCFTA can open the door. It does not determine which door is worth entering. Before investing in the next stage of a value chain, a more decisive question may therefore be: where is the value actually captured and what evidence do we have? That is the point at which market information becomes strategic intelligence, and where a value-chain ambition can begin to become a competitive position.
The Editorial Staff