The world seen from africa : when reshoring threatens global growth

The OECD recently unveiled the results of its Supply Chain Resilience Review, showing that an aggressive relocation strategy – through increased import tariffs, massive support for local production, or restricted access to inputs – could reduce global trade by more than 18% and push global real GDP down by over 5%. In some scenarios, declines of up to 12% are even projected for highly exposed national economies.

Marion Jansen, Director of the Trade and Agriculture Directorate at the OECD, stated: “In the past, we may have underestimated the risk of over-dependence on a single trade partner, but swinging too far toward localization and avoiding international trade would be another mistake, leaving us exposed to domestic shocks and major inefficiencies.”

A Context of Disruption

Since the outbreak of the Covid-19 pandemic, the war in Ukraine, and Sino-American trade tensions, businesses and states have questioned the reliability of global supply chains. However, according to the OECD, simply bringing back value chains does not improve resilience: more than half of the countries analyzed would actually experience increased GDP volatility. The study also reveals that import concentration has increased by nearly 50% between the late 1990s and the early 2020s, with China as the single dominant partner in 30% of highly concentrated import cases.

Why This Warning?

Today’s global economic model largely relies on fragmented and open value chains that cross multiple countries, enabling efficient production, innovation, and employment. By choosing to bring back or isolate these chains, economies expose themselves to higher costs, less specialization, and greater vulnerability to domestic shocks. The OECD estimates that relocation efforts could reduce growth by 3% to 13% of GDP in advanced countries.

“Geopolitics is becoming a structural factor of economic risk”

Business leaders and investors should take away three major lessons. First, “resilience” is not built by moving all activities within national borders, but by diversifying sources, improving logistical agility, and working on supply chain flexibility. Second, geopolitics is becoming a structural factor of economic risk: dependence on a single supplier or partner can be a bottleneck even in a reshoring plan. Third, medium-sized or emerging economies have an advantage: they can negotiate their place in global value chains by remaining open, but better connected and more specialized, rather than trying to produce everything internally.

We must enhance the flexibility of global supply chains

The OECD’s message calls for repositioning rather than disruption: “Instead, we need to tap into new, untapped sources of supply globally and enhance the flexibility of global supply chains, particularly for products with highly concentrated imports.” For African countries or those at the margins of major manufacturing hubs, the opportunity is twofold: on one side, integrate into these diversified value chains, and on the other, remain vigilant to the cascading effects of a global slowdown.

Prioritizing an Agile Approach to Globalization

The supply chain crisis is not just a matter of logistics: it reflects a new era where trade and investment must rely on diversity, flexibility, and openness, rather than on a reflex to pull back. Businesses and governments must adapt their strategy to this reality: abandon the idea that “reshoring” equals “security,” and favor an agile approach to globalization. The OECD reminds us that without a measured approach, renovation equals regression.