Boosting the intra-African digital trade in the AfCFTA context: does regulatory framework matter?

Abstract

AbstractDigital trade is one of the promising areas for the African Continental Free Trade Area (AfCFTA) and a factor of success of the African Union Digital Transformation Strategy (DTS) for Africa (2020–2030). However, the benefits of digital trade are not automatic and require an adequate regulatory environment. The objective of this study is to show how an adequate regulatory framework can boost the intra-African digital trade in the AfCFTA context. Our descriptive analysis shows that digital trade has increased across all regions in the world particularly in Africa since the beginning of the covid-19 pandemic. As a share of digitally deliverable services in total export services, digital trade represents 35% of total export services in Africa. Digital trade expansion faces regulatory barriers and the lack of a harmonized regulatory framework. Our econometrics results shows that digital trade and digital trade regulatory barriers (RDTII) are strongly negatively correlated in Africa. This result establishes the need to improve digital trade regulations framework in Africa.