Costed Action Plan for SADC Industrialization Strategy and Roadmap been, albeit very limited to date, development of regional (non-South African) value chains in tourism and hospitality, energy supply (electricity and gas) and retail. The potential for agro-based RVCs is significant but constrained, especially by very low levels of agricultural productivity along with supply chain and logistical challenges as well as the infrastructure deficit. Moreover, downstream processing, most relevant in agro-processing, “is constrained by a restrictive trade policy environment that undermines downstream competitiveness in an attempt to protect upstream markets” 2, apparent in intra-SADC trade restrictions on a range of agricultural commodities. Minerals beneficiation and associated downstream operations are prioritized in a number of Member States but the rate of development will depend on global market conditions, access to capital (constrained by weak end-market demand for mineralrelated products) and access to skills and technology. The potential for backward integration into the provision of mining inputs, intermediates, capital plant and machinery and mining services, is huge. Most Member States have prioritized links in the cotton-textiles-apparel value chain for which there would seem to be greater regional than global opportunities. Even with the sharp depreciation of the South African rand, South African manufacturers and retailing groups are under pressure to contain costs, which makes regional outsourcing to lower wage locations potentially attractive. Key obstacles that must be overcome include access to fabric and finance, the skills deficit and logistics. For the foreseeable future the development of both RVCs and GVCs in the SADC region will be constrained by the acute scarcity of skills, especially those necessary for value chain upgrading. 3.7 Action Plan for Regional Value Chain Development a) Deeper Regional Integration Although SADC is a free trade area numerous obstacles to the free movement of goods and services remain in place, underscoring the role of trade facilitation measures, including promoting frictionless border posts and vastly improve physical infrastructure, in levelling the playing field. Deeper regional integration, including further trade liberalisation, is an essential pre-requisite for the development of RVCs and increased integration in GVCs. 2 World Bank (2015) Factory Southern Africa. 37