Rethinking Africa’s Place in Global Value Chains: Why Value Addition Alone Won’t Cut It

In nearly every sector in which Kenya participates—tea, mangoes, coffee, textiles, gemstones, and even tourism—the same pattern repeats itself. We grow, harvest, or extract, but someone else owns the rest: the processing, the branding, the distribution, and the profit margins. These industries were not left to chance. They were designed, structurally and strategically, for extraction. Kenya was positioned as a reliable supplier of raw materials, not as a designer of markets. The value chain model we operate in was never built for us to lead. Even now, when policymakers and entrepreneurs discuss moving up the value chain, they often mean adding value within a system created elsewhere—a ladder we were never meant to climb to the top of.

This is why the conversation must change. Value addition is essential, but unless we also address how the entire system is structured, most of the additional value will continue to flow out of the country. Value chains do not simply emerge; they are engineered through business models, infrastructure, procurement policies, and trade agreements. In most global industries, that design works very efficiently for others. Kenya’s goods are often grown or mined here, then shipped abroad for processing, blending, and branding. The certifications, financing, and logistics that make these chains function are located in—and for—the importing countries. Even when a product is technically manufactured in Kenya, most of its value is generated elsewhere.

It is not for lack of trying that our role remains fixed. The reality is that pricing structures, processing hubs, and global standards are set up to route the bulk of value toward Asian manufacturing hubs and Northern consumer markets, not back to Kenyan producers. At its core, a value chain is about negotiating power—who sets the terms and who must follow them. On almost every front, Kenya is at a disadvantage. As sellers, we mainly offer raw commodities that are easily replaced. Buyers in global markets dictate standards, prices, and timelines. As buyers, we rely on imported machinery, certification services, packaging, chemicals, and software, making local value addition heavily reliant on foreign inputs and regulations. As potential new entrants, we face significant barriers, including tariffs, complex standards, and limited domestic infrastructure. The system itself makes it easier and cheaper to export raw materials than to extract higher returns locally.

When Kenya attempts to export processed goods rather than raw materials, the obstacles multiply. Tariff escalation means that raw mangoes may enter an export market duty-free, but mango purée or dried mangoes face higher tariffs, more paperwork, and stricter regulations. Certification requirements—whether for food safety, organic standards, or ethical sourcing—often necessitate the use of expensive external labs, foreign audits, or imported traceability systems. These barriers may not always be deliberate, but their effect is the same: the further up the value chain we try to move, the more costly and complex the process becomes.

Local processing, product development, and branding can strengthen industries and create jobs. Still, if the inputs—machinery, energy, packaging, certification—are imported, and if distribution and pricing are still controlled abroad, much of the benefit leaks away. Foreign investment often promises jobs and infrastructure, but too often it means foreign-owned operations using local labour to feed global chains. At the same time, ownership, intellectual property, and pricing power remain offshore. True transformation comes not from merely adding value but from designing for value retention, through local ownership, infrastructure, and stronger negotiating power.

Not all value chains are equally open to change. Established chains, such as those in tea, coffee, and textiles, are locked into mature global systems with fixed buyers, thin margins, and entrenched rules. Change in these sectors is slow and incremental. However, increased pressure on environmental stewardship could offer an unexpected opportunity for value enhancement. The European Union Deforestation Regulations offer Kenya a chance to regain control over the value in its agricultural and natural resource sectors. These regulations require global brands to ensure traceability, ethical sourcing, and environmental stewardship throughout their supply chains. Kenya can position itself as a leader in environmentally conscious production by investing in domestic certification bodies, traceability systems, and sustainability labs. Aligning domestic policies with these global requirements can secure greater negotiating power, retain value locally, and build resilient industries.

In addition, greenfield value chains—those still in the process of taking shape—offer a rare opportunity. Sectors such as seaweed, insect-based agricultural inputs, water hyacinth fibre, and indigenous wellness ingredients like baobab, moringa, and African botanicals are emerging that Kenya can shape standards, infrastructure, and branding from the start. This does not mean abandoning established industries, but it does require being strategic about where to invest energy and resources.

In traditional industries, standards have often acted as barriers: complex, costly, and controlled externally. But in emerging sectors, they can be turned into competitive advantages. Sustainably, for example, new European Union regulations on traceability and circularity are forcing brands to rethink their supply chains. Kenya cannot and should not compete based on the lowest price or fastest turnaround, but it can differentiate itself through transparency, ethical sourcing, and environmental stewardship. The same logic applies to regenerative agriculture, ethical cosmetics, and carbon-conscious packaging. If we invest in domestic labs, certification bodies, and traceability tools, standards can move from being hurdles to being part of our selling point.

Many development programs still focus on increasing production as the primary measure of success. But higher output alone does not guarantee higher local value. If certification, branding, and market control remain in foreign hands, value will still flow outward. The critical questions then become: who sets the prices, who controls the standards, and who owns the brands and infrastructure? The answers to these questions determine whether Kenya merely participates in global value chains or has the power to shape them.

If Kenya wants value chains that genuinely serve its economy, value addition must be seen as part of a larger system design challenge. That means focusing less on export volume targets and token foreign investment, and more on setting the rules that keep value local—through domestic procurement, enforced standards, incentives for local production, and trade policies aligned with value capture. It means supporting the enabling systems—shared processing facilities, quality labs, and aggregation platforms—that unlock wider value chain performance. It means backing businesses that anchor ecosystems and shape new markets, rather than chasing short-term wins in broken systems. It means encouraging entrepreneurs to take the lead in greenfield value chains, where Kenya can still set the logic and infrastructure from the outset.

This is not just about building more businesses. It is about shifting the system in which they operate. Kenya will never outproduce or underprice industrial giants like China or Vietnam—and it does not need to. The opportunity lies in changing the game, in designing intelligent, locally anchored value chains where wealth does not just pass through but stays, circulates, and compounds. That requires seeing value chains not as ladders to climb but as systems to be re-engineered, spotting where power sits, deciding where Kenya can set the rules, and investing accordingly. In some sectors, that window may already be closed. In others, it is still wide open. The challenge is knowing the difference and acting before the design is locked in.

This article was co-authored by Liesbeth Bakker of CASBI - Centre for Applied Sciences & Business Innovation