Building capacity to help Africa trade better

ICTs Services Development and Trade: How Africa Can Benefit

Trade Reports

ICTs Services Development and Trade: How Africa Can Benefit

ICTs Services Development and Trade: How Africa Can Benefit

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This paper examines services made possible by new information and communication technologies (ICTs) that are capable of being domestically and internationally traded. The emphasis is on the implications for African economies, as a unique subset of the emerging economy group.

We begin by discussing the economics of modern ICTs, where we argue that these technologies and the services they enable are strongly pro-growth and efficiency-raising. We then explain how ICTs have been pro-trade and especially services trade from even before the smartphone, or even the online social network era. We then look at the recent history of ICTs-driven trade and describe the trends over the first decade of the millennium. During this period, communication services trade nearly tripled and information services trade more than quadrupled.

We then present data comparing growth in ICTs services trade post 2005, for a variety of cross-sections of countries and country groupings. Africa’s share in this trade is small, and is less than 25% of the developing country total, which is approximately 20% of the global total. Nevertheless, rates of uptake of this service trade are high for Africa, especially among the West African states.

We follow up the presentation of data trends with an examination of the state of services trade liberalisation. The General Agreement on Trade in Services (GATS) process has stalled, and at the time of writing of this paper it is not clear how effectively it will serve the services trade liberalisation momentum in Africa. Within Africa and its regional economic communities (RECs), services trade liberalisation is on the negotiating agendas of both the continental free trade area (CTFA) as well as the RECs.

We then consider Africa’s readiness for ICTs services trade and their platforms from 3 perspectives: ICTs infrastructure; SMEs, skills and entrepreneurship; and the regulatory environment. The final section of the paper reviews the current predominant trade-related ICTs and their potential for Africa.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.


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