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Services

African tertiary sector

by admin0289

Although Africa is characterized by its abundance of natural resources, services represent more than 50% of the GDP of the countries concerned and the sector is constantly growing.

The continent presents an atypical structural transformation profile. Unlike Western economies and those of South and Southeast Asia, the downward trend in agriculture has not benefited industry and then services; there has been less agriculture and more services in the African economy without it going through an intermediate phase of industrialization. On the contrary, manufacturing activity has declined while the share of services has grown.

Services mainly accompany export activities, including agricultural ones; for example, services account for 83 percent of the selling price of Ethiopian roses in the Netherlands. But among exports, it is those of manufactured goods that are most associated with services; for example, in Lesotho and Tunisia, who are exporters of such goods, the weight of services in their economy (61.7 percent) is higher than the average. The countries least concerned are oil exporters, for whom services represent 33.9 percent of GDP (but it is in these same countries that growth in services is strongest). Some small countries are heavily dependent on this sector, as they are essentially focused on travel and tourism services; in 2013, services represented 75 percent of the GDP of Cape Verde and 74 percent of that of Mauritius.

The growth of services, in addition to exports, is also driven by domestic consumption. Population growth has led to strong demand, particularly for telecommunications, despite poor infrastructure. The telecommunications sector attracted 74% of private investment in infrastructure during the period 1990-2013.

In terms of human resources, the services sector represents 32.4% of total employment in Africa during the period 2009-2012 (56.5% for agriculture and 11% for industry), which is significantly less than its share in GDP. The importance of informal employment is the cause, knowing that the bulk of services are provided by small informal enterprises, particularly in the wholesale and retail trade sub-sectors as well as in catering and transport.

Some African countries have explicitly identified services as an economic priority: Botswana for the entry and analysis of computer data; Cameroon is banking on call centers and remote data processing, like Rwanda, which is also promoting financial services; and Namibia aims to become a regional transport hub. Finally, some countries are massively dependent on tourism: Cape Verde, Comoros, Ghana, Kenya, Lesotho, Seychelles, etc.

Internationally, Africa is a minor player in the services market; it accounts for 2.2% of global services exports and 4% of total global imports. Its competitiveness is weak, hampered by ineffective regulations and policies and by the infrastructure deficit.

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