World Bank says Africa could boost intra-continental services trade by over 60 percent

The World Bank said Tuesday that Africa could increase intra-continental trade in services by 60 to 64 percent by 2035. The estimate is based on projections that deeper liberalization of transport, telecommunications, financial, and professional services would boost trade among African countries, contingent on regulatory and market-access reforms.

The World Bank’s projection that intra-African trade in services could increase by 60 to 64 percent by 2035 is based on a scenario of deeper liberalization in transport, telecommunications, financial, and professional services, contingent on comprehensive regulatory and market-access reforms, according to the bank’s analysis. This medium-term estimate focuses specifically on trade in services among African countries and does not include Africa’s global services trade.

The projection builds on modeling related to the African Continental Free Trade Area (AfCFTA), which the World Bank says could increase total exports by about 29 percent and intra-African exports by approximately 81 to 82 percent by 2035.

However, gains in services exports are expected to be more modest, with total services exports rising roughly 4 percent overall and intra-African services exports increasing by about 13 to 15 percent, the bank’s report “Making the Most of the African Continental Free Trade Area” states. The value of intra-continental trade in goods and services is projected to grow from approximately US$294–297 billion in the baseline to about US$532–540 billion by 2035 after AfCFTA implementation. Specifically, intra-continental services exports are forecast to rise from around US$24 billion in the baseline to a significantly higher level under the trade agreement.

The World Bank emphasizes that services liberalization is critical because services act as job-creating and productivity-enhancing inputs that support firms’ participation in regional and global value chains. The bank’s policy recommendations include integrating a services trade strategy into national development plans, improving data collection on services, and fostering stakeholder dialogue on reforms. Countries are encouraged to identify priority service sectors such as banking, insurance, business services, ground transportation, and construction, where increased competition, foreign investment, and new technology could drive efficiency and growth.

Regulatory barriers remain a major obstacle to expanding intra-African services trade. A regulatory survey conducted by the World Bank and the World Trade Organization between 2020 and 2022, in collaboration with the AfCFTA Secretariat and supported by GIZ, the European Union, and the International Trade Centre, identified non-tariff barriers including licensing rules, foreign equity caps, and restrictions on cross-border service provision as significant constraints. The World Bank’s modeling assumes that about 50 percent of actionable non-tariff barriers could be reduced, underpinning the projected gains in services trade.

The bank also stresses the importance of cross-border regulatory cooperation, recommending the establishment of committees or platforms to bring regulators together to manage liberalization while ensuring service quality and financial stability. Harmonizing standards and mutual recognition of professional qualifications within regional economic communities are highlighted as key steps to ease cross-border provision of services.

Africa’s current share of global services exports is small, accounting for about 2.2 percent of the world total, according to a World Bank study. Intra-African trade, which includes both goods and services, represented only about 15 percent of Africa’s total trade in 2022, reflecting relatively low regional integration compared with other parts of the world. The share of services in Africa’s total trade has been rising post-pandemic, reaching around 23.6 to 24.3 percent in 2022, slightly above the global average of 22.9 percent and second only to the Middle East. Between 2000 and 2022, Africa’s services trade value increased more than fourfold, from about US$66.4 billion to US$269.4 billion, indicating rapid growth from a low base.

The World Bank’s recent messaging urges Africa to transition from simple trade links toward integrated production hubs, with services reform as a central pillar. Efficient cross-border services networks in logistics, finance, communications, and professional services are seen as essential to regional industrialization and diversification, the bank said. This approach requires coordinated reforms at both regional and national levels, with regional bodies providing frameworks and member states responsible for implementation.

The 60 to 64 percent projected increase in intra-African services trade is part of a broader development narrative emphasizing services as key to employment, productivity, and participation in global value chains. Earlier World Bank reports have documented barriers and identified priority sectors for services liberalization. For example, a 2016 report titled “From Hair Stylists and Teachers to Accountants and Doctors – The Unexplored Potential of Trade in Services in Africa” highlighted underutilized opportunities in services exports and the need for trade policy attention. A 2015 speech on deepening African integration stressed the importance of services as job-creating inputs and called for enabling African professionals to practice across borders.

The World Bank continues to advocate for regulatory reform and capacity building among national and regional institutions to effectively implement services liberalization while safeguarding quality and consumer protection. The bank’s analyses underscore that reducing non-discriminatory services barriers and unilateral liberalization of discriminatory barriers could substantially increase consumption and efficiency across the continent.