Building capacity to help Africa trade better

The services sector in Africa

Working Papers

The services sector in Africa

The services sector in Africa

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Services are playing an increasingly important role in the modern economy, but while economists and policy makers focus on trade in merchandise goods they tend to spend significantly less time examining the services trade. The lack of detailed information as well as the complexities of the embodied services components, such as brand marketing within manufactures, makes it hard to quantify the international trade in services.

In this paper we present a preliminary examination which could be referred to as the standard services profile of African countries and, in particular, services trade for these countries. We note that the paucity of data almost always precludes a bilateral examination, so our examination is limited to the broader profile. The data source is mostly the International Trade Centre (ITC) database, and we have reported on data through to and including 2012 and, where practical, 2013.

As a generalisation, services comprise between 60% and 70% plus of the Gross Domestic Product (GDP) in the developed economies; the Sub-Saharan African share increased in recent years to over 60% in 2013. Most, but not all, of the African economies report an increasing share of services in their economies.

Africa is a net debtor on services trade, with global imports rising from 2.8% in the early years to just over 4% in the latter period, while Africa’s export share is lower and perhaps ever marginally declining. Overall, Africa imports $170 billion in services from the world and exports just $97.4 billion. Egypt is the largest individual trader, although South Africa just verges on Egypt for service imports.

The imbalances are interesting in that some countries such as Morocco and Tunisia export more than they import, while for others, and in particular the oil-exporters of Algeria, Nigeria and Angola, imports are substantially higher than exports. Examining services trade as represented by combined services imports and exports expressed as a percentage of GDP shows that Sub-Saharan Africa is very close to the global average.


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The services sector in Africa - Author(s): Ron Sandrey

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