Position of services and trade in Аfrica and their impact on export diversification

Abstract

The article provides a detailed assessment of the potential role of services in enhancing export diversification in Africa.In addition, the potential of SMEs (small and medium-sized businesses) in promoting the key role of services in the growth of production and competitiveness is assessed. The author also examines the key factors undermining the eff ectiveness of export diversifi cation and economic transformation in Africa. African exports continue to focus on a narrow range of commodities, but several African countries have achieved a certain level of export diversification over the past decade. The higher the level of development of the service sector, reflected by the variety and quality of services sold, the better the access of domestic firms to competitive key services. As a result, the author comes to the conclusion that traditional services, such as travel and transport, dominate the trade in services, covering more than two thirds of the total trade in services. Despite the importance of simplifying production and supply links, traditional services do not have a direct impact on the complexity and diversity of the export basket,which, as can be seen, increases due to services with high knowledge intensity, such as ICT. The development of trade in services promotes inclusive growth by reducing poverty and inequality and contributes to the achievement of the 2063 Agenda and the Sustainable Development Goals.