Integration of Regional Value Chains: Targeting and Positioning Strategies for Algeria

Integration of Regional Value Chains: Targeting and Positioning Strategies for Algeria

¹Younes FERDJ, ²Abdelkader DJEFLAT

¹Maître de recherche -A- (HDR), CREAD, Laboratoire LAMOPS, ENSSEA

²Prof./Senior researcher, DIMS/Maghtech Labo CLERSE University of Lille

DOI: https://dx.doi.org/10.47772/IJRISS.2025.9010105

Received: 31 December 2024; Accepted: 04 January 2025; Published: 06 February 2025

ABSTRACT

Regional integration in Africa has mainly taken place at the level of regional economic communities or at the sub-regional level and has progressed at an uneven pace. The rise of regionalism in the world accentuates the need to strengthen intra-African integration. (OECD). The relative failure of WTO agreements, deglobalization and the difficulty of certain countries, such as Algeria, to access the WTO, gives full meaning to a balkanization of trade agreements between smaller geographical blocs. This phenomenon, which is likely to lead to fragmentation and regionalization of international trade, advocates for the development of regionalized trade and the development of regionalized value chains.  In this work, our objective is to reflect on the socio-economic prospects of Algeria in the context of the implementation of this agreement, which is necessary in order to better understand its instruments and its impact on Algeria’s foreign trade. The overall objective is to determine the main strategic axes by identifying: the threats, the opportunities, the key success factors and the comparative advantages available to Algeria, the actions to be carried out in the short and medium term, taking into account the weaknesses and strengths of the national economic fabric.

Keywords: Integration, regionalized value chains, Africa, knowledge economy, Innovation, Algeria

INTRODUCTION

Since the 1990s, global trade has experienced significant acceleration. Advances in communication and transportation technologies, along with economic liberalization, have been the main drivers of this acceleration. This evolution has led to increased competition, reduced margins, and has pushed companies to reorganize their structures. Many have opted for geographic expansion strategies such as offshoring and outsourcing to seize growth opportunities and gain competitive advantages (Kherrazi, 2015). Thus, Global Value Chains (GVCs) emerged, covering all activities from the design of a product or service to its final use (OECD, 2013). This reconfiguration of global trade is sometimes referred to as “deglobalization” (Science Po, 2023), marking a trend towards fragmentation and regionalization of international trade (Djeflat, 2024 ; Ferdj, 2024a). This dynamic promotes the development of regionalized trade and regional value chains. In Africa, regional integration has primarily developed within regional economic communities and at the sub-regional level, progressing at uneven but accelerated rates, especially after the Covid-19 pandemic (OECD, 2022). Trade between countries is based on the principle of “most favored nation” treatment (CNESE, 2023). The implementation of the African Continental Free Trade Area (AfCFTA) is a key driver for the development of intra-African trade, thereby facilitating regional and continental integration.

The African Continental Free Trade Area (AfCFTA) will cover a market of 1.3 billion people, expected to reach 2.5 to 3 billion by 2050, with a Gross Domestic Product (GDP) of $2.5 trillion for all 55-member states of the African Union. It will become the largest free trade area in the world since the creation of the World Trade Organization (WTO). Its objective is to intensify intra-African trade by creating a single market for goods and services, thereby strengthening the economic integration of the African continent in line with the Pan-African vision of an “integrated and prosperous Africa” outlined in Agenda 2063 (CNESE, 2023).

The ratification of the convention regarding Algeria’s accession to the AfCFTA in May 2021 will have a significant impact on Algeria’s foreign trade and intra-African exchanges by promoting South-South cooperation. According to experts, the AfCFTA agreement is a new generation trade agreement, as it not only focuses on tariff reductions or exemptions but also includes provisions on competition, trade in services, investment, intellectual property rights, and e-commerce. Intra-regional exports by African businesses are 4.5 times more diversified than their exports outside of Africa (OECD, 2019).

The rise of global regionalism underscores the need to strengthen intra-African integration (OECD, 2022). The relative failure of WTO agreements, deglobalization, and the difficulty for some countries, such as Algeria, to access the WTO, highlight the importance of developing trade agreements between smaller geographical blocs. In this context, continental coordination among African countries is essential. According to the OECD (2022), the AfCFTA can contribute to the growth of regional value chains by reducing intra-African trade costs, overcoming investment barriers, and improving competitiveness. It is crucial to note that African value chains represent only 2.7% of global value chains, a very low figure compared to the 43% of value chains in developing Asia (OECD, 2022). This situation offers a significant opportunity for African countries to increase their market share in the global network. Leveraging regional complementarities will optimize the comparative advantages of African countries, as regional markets are catalysts for the development of production capacities (Ferdj, 2024b). To achieve this, it is essential to develop high-quality basic infrastructure and enhance the added value of raw materials (Djeflat, 2024).

It is necessary to move from the classic export model to Africa towards a new order focused on sustainability and mutual wealth creation for inclusive development of the African continent. This raises important questions: What is the potential of the semi-finished goods industry? Which regional value chains offer opportunities for sustainable investment in Africa?

In this work, we aim to reflect on the socio-economic prospects of Algeria within the framework of the implementation of this agreement to better understand its instruments and its impact on Algeria’s foreign trade. The overall objective is to determine the main strategic directions by identifying the threats, opportunities, key success factors, and comparative advantages of Algeria, as well as the actions to be taken in the short and medium term, considering the strengths and weaknesses of the national economic fabric (Ferdj and Djeflat, 2024). After presenting the phenomenon and the concept of global value chains in the first part, we will examine the opportunities and risks associated with their integration into the Algerian economy, considering its potential and weaknesses, in the second part. This analysis will include a regional comparison with other African countries. Finally, in the third part, we will briefly address the risks related to integration and how to ensure sustainable maintenance in regional value chains.

Global Value Chain: Theoretical and Conceptual Framework

Globalization has profoundly transformed the landscape of goods and services production, extending far beyond national borders. Trade, once confined to a single country, is now organized through production networks that span multiple countries, even the entire planet. These networks, known as Global Value Chains (GVCs), result from companies leveraging technological advancements and regulations to optimize their sourcing strategies by geographically distributing production activities. GVCs offer new possibilities for structural transformation in Africa (Djeflat, 2014) , where countries can integrate into these chains, often focusing on assembly in the manufacturing sector and raw material production in agriculture. Ideally, this strategy allows for upgrading through knowledge transfer, product differentiation, and achieving new stages in the value chain (Baldwin and Martin, 1999 ; Baldwin, 2006; Baldwin, 2011). Measuring trade in value-added terms, as opposed to traditional gross measures, can provide insight into the degree of integration into GVCs and their potential benefits.

Currently, Africa contributes only a modest share of global trade measured in value-added terms but is relatively well integrated into GVCs compared to other regions, primarily due to its role in supplying raw materials exported to other regions for processing (Ferdj, 2024a). However, the share of value-added generated in Africa remains very low. Regarding the benefits of GVCs, they have more often favored export growth and productivity than job creation. Success depends on a country’s ability to meet external demand, as well as the nature of the value chain and the leading company (Baldwin, 2011).

The value chain describes the division of the production process into various stages, ranging from purely productive activities to the creation of added value, including design, intermediate stages of the production plan, execution, and delivery of the product as a final good or service (Baldwin and Martin, 1999 ; Baldwin, 2006). This concept is related to value chain analysis, a method that identifies opportunities for cost reduction and product differentiation at different stages of the production and delivery process (Gereffi and Fernandez-Stark, 2011; OECD, 2013). A value chain becomes a Global Value Chain (GVC) when companies from different countries, often spread beyond a single region, establish contractual relationships for the processes and tasks involved. In a GVC, companies from various countries participate in an integrated production system, thus forming a supply chain for the manufacture and provision of goods and services (OECD, 2013). These companies are interconnected at each stage, where one imports raw materials to produce items destined for export to another participant in the chain, located in another region or country. This “import for export” process goes beyond simple commercial transactions between the involved companies. It also includes the sharing of action plans and management practices, thereby facilitating the continuous transfer of new ideas and skills from one region or country to another (OECD, 2013).

Figure 1. Stages of a Generic Value Chain (OCDE/UNDP 2014)

Global value chains present ever-expanding opportunities. The evolution of trade in goods has synchronized with technological advancements in their production. Adherence to the standards established by companies and integration into certain global value chains can enhance capabilities, foster employment, and influence the social structures of African countries (OECD, 2022). A country’s position within a chain and its ability to increase its participation is crucial for its success, as is the availability of suitable services, effective governance, innovative entrepreneurs, and adherence to the chain’s specific rules (Djeflat and Lundvall, 2016). Advances in transportation and communication technologies have significantly extended global value chains. The large-scale international trade of goods took off in the 19th century with the advent of modern transportation methods. Before the emergence of fast transport for large volumes by train, steamship, or truck, each city or region generally had to produce most of the goods it consumed. From the mid-19th century onwards, transport allowed for the exchange of massive volumes, prompting cities, regions, and even countries to adopt a division of labor. They specialized in producing the goods they were able to consume and sell, while purchasing other goods from other regions. With decreasing transportation costs, trade continued to grow significantly (OECD, 2022).

The concept of global value chains dates back to the 1960s, much earlier than commonly thought. Jaroslav Vanek (1971) is recognized as the first economist to discuss it, and since then, the concept has been widely explored in economic research. Richard Baldwin (2006),  highlighted the concept of decoupling to better understand the fragmentation of global value chains in recent decades. This decoupling has manifested in two ways: first, between production and consumption, meaning that goods are no longer necessarily produced where they are consumed; second, between goods and services, indicating that not only are goods fragmented across the world, but also the different internal functions of the company are outsourced and services are traded (Baldwin, 2011). This decoupling between goods and services aligns with Michael Porter’s (1996) analyses on business functions and those of Gene Grossman and Esteban Rossi-Hanberg (2008) on the trade of tasks. The OECD, in its work with the WTO on trade in value-added, refers to Gary Gereffi’s (2011) definition, which states that a value chain encompasses all the activities of a company, from the design of a product to its final use, including activities such as design, production, marketing, distribution, and customer service, which can be carried out by a single company or spread across multiple companies (Gereffi, 2011).

METHODOLOGY

The research methodology used rests on three major components. The first one is an extensive search of appropriate secondary data related directly or indirectly to the integration in Global Value Chains, both internationally and regionally. This component required acquisition of data from the appropriate bodies such as the National Office of Statistics of Algeria through direct contact and secondary data from major international organisations specializing in the Afreican economies such as the African Development Bank and the UN Economic Commission of Africa.

The second component relates to the analytical approach which is mostly comparative by conducting a regional benchmarking study among African countries. This analysis made it possible to compare the integration strategies of different countries into global and regional value chains, while highlighting the development of intra-African trade.

The third component is the use of analytical instruments and indexes. In this respect, the criterion of Revealed Comparative Advantage (RCA) and its index proved to be valuable to highlight the sectors with the greatest comparative advantage. In the case of Algeria this is the field of fuels. The upstream and downstream analysis contributed to identify most integrated segments in both global and regional value chain.

Implications and Benefits of Integration into Global Value Chains for Algeria’s Economy

In 2022, Algeria’s foreign trade totaled USD 104.2 billion, marking a 37% increase compared to the previous year. This growth in Algerian trade is largely attributed to changes in hydrocarbon prices. Algerian exports reached USD 68.4 billion in 2022, up 76.4% from the previous year. This increase is mainly due to the rise in hydrocarbon prices, which account for 89.8% of the country’s total exports, including 41% from natural gas, 30.3% from crude oil, and 15.4% from fuels. Other exports include derivatives from the petroleum and gas industries as well as agricultural products such as dates and sugar. In 2022, France was Algeria’s third-largest customer, accounting for 10.5% of total exports, behind Italy (32.3%) and Spain (12%). Algerian imports, totaled USD 35.9 billion in 2022, recording a 3.6% decrease compared to the previous year. Imports are diversified, with four product groups contributing to more than a third of the total, including foodstuffs, industrial equipment goods, plastic products, and electrical equipment goods. While purchases of industrial and electrical equipment goods decreased, purchases of foodstuffs and plastic products increased between 2021 and 2022. China was Algeria’s main supplier in 2022, accounting for 18.6% of total imports, followed by France (14%) and Italy (7.7%).

Due to exports rising more significantly than imports, Algeria achieved a trade surplus of USD 32.4 billion for the second consecutive year, following six years of trade deficits.

Figure 2. Evolution of Algeria’s Trade (USD Billion)

Source : Trade Map 2023. https://www.trademap.org/Index.aspx

Participation in global value chains (GVCs) is reflected in trade exchanges. Over the past five years (2015-2020), almost all exports have been dominated by “Energy and lubricants” products, although the percentage has decreased (from 94.4% in 2015 to 90% in 2020). From 2015 to 2020, we observe the low weight of semi-finished product exports, while the share of equipment is insignificant. However, it is on these types of (manufactured) products that GVCs are built.

Table 1. Evolution of the Structure of Merchandise Exports by Usage Group (in %)

Source: ONS, Statistical Collections, No. 228/2022

Participation in global value chains (GVCs) is reflected in trade exchanges. Table 1 shows that over the past five years (2015-2020), almost all exports have been dominated by “Energy and lubricants” products, although the percentage has decreased (from 94.4% in 2015 to 90% in 2020). From 2015 to 2020, we observe the low weight of semi-finished product exports, while the share of equipment is insignificant. However, it is on these types of (manufactured) products that GVCs are built.

The hydrocarbon sector is undoubtedly the domain in which Algeria is deeply rooted in the global economy. Immediately after independence, this sector received special attention from public authorities, making it a top priority in development programs. However, this integration into global value chains is compromised by a persistent crisis in the industrial sector, marked by frequent changes and reforms that have not been successful. Furthermore, the hydrocarbon sector has had a negative impact on GDP formation during this period, as indicated in table 2. Moreover, the comparative advantages linked to this sector tend to diminish and become disadvantageous, especially for crude oil. The expected spillover effects of this sector fade in the absence of a strategic and integrated vision of its activities. As for other hydrocarbon products, such as raw materials or those that have undergone initial processing, their integration is more limited (Mahoui and Ferfera, 2017).

Table 2 Structure  of Merchandise Imports by Utilization Group (%)

Source: ONS, Statistical Collections, No. 228/2022

This indicates that to reverse the deficit trend, the focus should be more on exports than on imports. Table 2 shows the evolution of the import structure has been relatively stable, with significant importance given to industrial equipment, semi-finished products and food and beverages.

Merchandise Exports by Economic Region

Table 3 shows that Algerian exports are primarily oriented towards the “North,” representing 53.9% to Europe, 2.5% to North America, and 17.6% to Asia. Horizontally, there is a gradual expansion of trade with Asia, while trade with North America has declined by about 20%, likely due to the exploitation of shale gas in the United States. Unlike its neighbors, Algeria has not developed a strategy to diversify its partnerships, preventing it from capitalizing on the growing demand observed in Africa and Arab countries.

Table 3 Evolution of the Structure of Merchandise Exports by Economic Region (%)

Source: ONS, Statistical Collections, No. 228/2022

Although the volume of non-hydrocarbon exports has increased, this growth remains relatively modest compared to that of hydrocarbon exports. This situation partly results from the absence of an effective industrial policy, which is notably reflected in the low contribution of the industrial sector to GDP. This contribution has been decreasing since 2006, dropping from 6.5% to 3.6 % of GDP in 2016 (Mahoui and Ferfera, 2017). However that trend seems to be reversing gradually.

Table 4 Evolution of Merchandise Exports by Use Group (In Millions of Algerian Dinars)

Source : ONS, Collections Statistiques, n° N° 228/2022

Table 5 shows the analysis of the evolution of merchandise exports by use group over the period 2015-2020: it reveals disproportionate variations in non-hydrocarbon export potential. The food, beverages, and tobacco sector saw its potential increase fivefold on average, with a significant rise in the share of processed products in this sector. It is followed by the semi-finished products sector, whose volume increased over the last year. In contrast, the industrial equipment and consumer goods sectors experienced an increase in their export levels.

Points of Comparison in Integration into Regional and Global Value Chains

As illustrated in the graph below, African countries stand out due to their significant involvement in global value chains, primarily in the downstream production of raw materials. However, these contributions remain relatively modest, representing only 2.2% of global trade in value-added.

According to the United Nations Economic Commission for Africa (UNECA) Report (2015), at the sectoral level, the manufacture of transport equipment emerges as the most integrated sector in global value chains, as shown in the graph. This situation can be attributed to the presence of major automobile manufacturers in Morocco and South Africa (AfDB, OECD, and UNDP, 2014). Toyota is the largest vehicle producer in South Africa (UNCTAD, 2010).

Figure 3. Sector Participation in Global Value Chains, Upstream and Downstream Integration (UNECA 2015)

A regional analysis of the participation of African countries in regional value chains reveals that Algeria generally ranks last in most of these sectors. In absolute terms, Algeria, along with Angola, Egypt, Nigeria, and South Africa, is one of the main drivers of regional trade in value-added terms. However, these countries import relatively little value-added from other African countries. In contrast, countries such as Swaziland, Zimbabwe, Namibia, Botswana, and Zambia, although contributing little in absolute terms to value-added trade, exhibit strong upstream integration in their total exports to the region, according to the report.

Figure 4. Country Participation in Regional Value Chains, Upstream and Downstream Integration (UNECA 2015)

However, based on the criterion of Revealed Comparative Advantage (RCA), Algeria stands out as the African country with the greatest comparative advantage in the field of fuels. Compared to its North African neighbors, it shows the lowest RCA index in basic food products, manufactured goods, and machinery and transport equipment, as shown in the following table.

Table 5. Revealed Comparative Advantage Indices of North African Countries (CEA, UA & BAD 2012),

Another level of regional comparison can be identified by looking north this time. This comparison will confirm previous results regarding the strong upstream integration of African countries, particularly concerning raw material exports. It will also highlight the importance of not limiting the analysis to the closest neighbors. The possibilities for Algeria’s integration must also be evaluated on a global scale (Ferdj, 2024b).

The Development of Intra-African Trade

Industrial development in most African countries has generally progressed at a more or less slow pace, as indicated by the average trend observed on the continent (represented by the red curve, figure 5). However, it is also important to note the disparity between Sub-Saharan nations and Maghreb economies. Indeed, North Africa remains the most advanced African region in this area, followed by Southern Africa, Central Africa, West Africa, and East Africa (AfDB, 2022). Figure 5 illustrates that between 2010 and 2021, industrial development was generally more pronounced in the Maghreb than in countries south of the Sahara.

Despite African economies exhibiting a relatively high level of trade openness, with export and import rates representing approximately 65% of GDP in 2021, Africa’s contribution to international trade remains very modest. As highlighted in Figure 5, from 1995 to 2015, Africa’s share of global trade never exceeded 3%. According to recent data, this proportion has remained similar: for instance, UNCTAD reports that in 2019, Africa accounted for only 2.8% of global trade.

Figure 5. Comparison of the Level of Industrialization by Country Group (AfDB 2022)

Furthermore, the level of intra-African trade is estimated at around 16%, which is significantly lower than the levels observed in intra-regional trade in Europe, North America, and the Association of Southeast Asian Nations (ASEAN), which are respectively 60%, 40%, and 30% (UNCTAD, 2013).

Although several factors contribute to the weakness of intra-African trade, Sané (2017) identifies the infrastructure deficit as one of the main causes. Indeed, Africa faces a massive infrastructure deficit in areas such as roads, electricity, railways, ports, and airports. In Africa, less than one-third of the population has access to all-season roads, and transportation costs as well as delivery times along road corridors are two to three times higher than in other regions of the world (AfDB, 2012).

Another significant factor contributing to the high costs of intra-African trade is the complexity of customs procedures related to outdated customs infrastructure in African countries. The hassles and bureaucracy of customs formalities, often carried out manually, lead to delays in customs for goods transit as well as for the import and export of goods.

Deploying the African Continental Free Trade Area to Strengthen Regional Value Chains and Accelerate Productive Transformation

The establishment of the African Continental Free Trade Area (AfCFTA) opens new prospects for the integration of regional value chains. It is currently the most advanced continental agreement in Africa, addressing crucial issues such as sanitary and phytosanitary standards, technical barriers to trade, intellectual property, and investment (World Bank, 2020). Its main objective is to boost intra-African trade within a continent of 1.2 billion people and a GDP exceeding USD 3 trillion. The growth of domestic markets, driven by demographic growth, urbanization, and the emergence of a new category of workers and consumers, offers new opportunities in various sectors such as food, pharmaceuticals, and the digital domain. n a step that takes the AfCFTA well beyond typical free trade agreements, on 19February 2023, the AU Assembly of Heads of State and Government adopted three new protocols to the AfCFTA Agreement – on investment, on intellectual property rights (IPR), and on competition policy. These protocols are seen as major steps in deepening continental market integration. A snapshot of each of these protocols reveals a significant speed of progress in the effort to establish a truly integrated African market in all its forms  ( Elitcha et al. 2023)

As of February 2024, significant progress has been made on various protocols, although some specific articles still require finalization. This includes the need for participating countries  to negotiate and adopt final Schedules of Tariff Concessions which comply with the AfCFTA negotiating modalities and have been domestically promulgated (Erasmus 2024). The AfCFTA Guided Trade Initiative was launched in October 2022 to facilitate trade among eight member states, which has since expanded to twelve countries by January 2024 (Tralac 2024). Debrah et al. (2024) propose that future research should examine the role of the AfCFTA in achieving SDGs and sustainability goals of member states.

Integrating Africa into global value chains can be supported by the development of regional value chains, thus facilitating productive transformation. Despite this, African producers remain largely marginal players in global production, accounting for only 1.7% of global value chains in 2019, compared to 1.5% in 2000. According to our estimates, regional value chains account for only 2.7% of Africa’s participation in global value chains, compared to 26.4% for Latin America and the Caribbean, and 42.9% for developing Asia (see Figure 6). Strengthening regional production networks could help African countries diversify their economic base and increase their productive capacities.

In 2019, processed or semi-processed products represented 79% of intra-African exports, while they accounted for only 41% of Africa’s exports to other destinations. Additionally, African companies can leverage their geographical, social, cultural, and institutional proximity to diversify and strengthen their productive capacities when targeting regional and continental markets. This increase in capacities and inputs would enable them to enter more demanding markets.

Figure 6. Share of Regional Value Chains in Global Value Chain Contributions, 2019

Currently, African countries’ participation in global value chains is mainly focused on the export of raw materials and agricultural products, which are then processed in other countries. This downstream participation in value chains represents 5.9% of Africa’s GDP, a level comparable to that of other developing regions. In contrast, the contribution of using foreign inputs processed locally, or upstream participation, accounts for only 2.1% of African GDP, a figure lower than that of Latin America and the Caribbean (4.5%) and developing Asian countries (3.3%).

Strengthening regional production for local markets could improve upstream participation in value chains and create quality jobs. Local processing to meet domestic demand can help producers specialize in certain upstream segments, such as food processing, marketing, transportation, and distribution, by leveraging their proximity to end consumers. For example, in agri-food value chains, upstream segments contribute to creating non-agricultural jobs both in rural and urban areas. These jobs can generate up to eight times more income than agricultural jobs (Tschirley et al., 2015).

Figure 7. Evolution of Intra-African Trade Costs and Trade Costs with the Rest of the World, 2005–19  ( UN ESCAP/ (2021), ESCAP‑World Bank Trade Cost

The increase in intra-African trade costs hinders regional production networks. As illustrated in Figure 7, intra-African trade costs have returned to their 2007 levels, despite a significant reduction in intra-African tariffs. These high costs harm production networks as they accumulate each time an item crosses a border. This situation is due to inadequate transportation infrastructure, the presence of non-tariff barriers, and insufficient commercial services in areas such as logistics, export credit, and payment systems. According to some estimates, logistics costs in Africa could be up to four times higher than the global average (Plane, 2021). The health crisis has further increased trade costs due to disruptions in transportation, restrictive trade policies, and uncertainties about the global economic situation.

CONCLUSION

This paper is a preliminary attempt to study, from both macroeconomic and microeconomic perspectives, the extent to which North African countries are integrated into global value chains (GVCs), using various datasets. Our findings show that North Africa has not yet managed to gain widespread access to global production networks, although their upstream integration has significantly increased over time. The integration of different countries varies, and successful examples of fruitful participation in a value chain are few, indicating that they risk being confined to low-value-added stages. However, GVCs are an important means of connecting developing countries with global production and trade, which can support the tendency of SMEs to export.

Regardless of its position within the value chain, a company must meet minimum quality, cost, and reliability requirements. Clients’ purchasing strategies are constantly revised to improve elements of their supply chains. The complexity and heterogeneity of quality standards have become a significant obstacle, especially for SMEs, which face substantial additional costs. Companies involved in the early stages of the production process and supplying various destinations with intermediate inputs will likely need to duplicate their production processes to meet different standards or undergo demanding certification procedures multiple times for the same product. In this regard, international regulatory cooperation (standard convergence, certification requirements, and mutual recognition agreements) can alleviate the compliance burden and improve competitiveness. For GVCs to have a positive impact, adequate preparation is necessary. Human capital development can be tailored to the needs of specific segments of the value chain. Specialized skills are a prerequisite for participation in high-value-added stages of industries such as information technology, electronics, and pharmaceuticals. Therefore, policies supporting education and technical training are an important tool for enhancing gains from global production..

The manuscript suffers from inconsistent formatting in its tables and figures, with numbering and captions not aligned with journal standards. The references list, though extensive, lacks recent publications, missing valuable insights into evolving trade dynamics and AfCFTA progress. Additionally, the methodology section provides limited detail about data sources and comparative analyses, making replication and validation difficult. These weaknesses undermine the manuscript’s readability and professional presentation, detracting from its overall impact. Addressing these issues will enhance the manuscript’s clarity, credibility, and alignment with academic and policy-making standards. The references section of the manuscript does not follow the formatting guidelines of the target journal.

Suggestions

To improve the manuscript, reformat tables and figures to conform to journal guidelines with consistent numbering and descriptive captions. Update references to include recent studies on AfCFTA and regional trade integration. Expand the methodology section to clearly outline data sources and analytical approaches, particularly for comparative analyses. Enhance the visual presentation of data with high-resolution graphs andwell-labeled legends. Broaden the scope of comparative analyses to benchmark Algeria’s integration into regional and global value chains against other economies. Refining the references as per journal standards will enhance the manuscript’s professionalism. These improvements will increase the manuscript’s relevance, accessibility, and scholarly impact.

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