CHAPTER 1. The Services Sector in Africa: Emerging Trends
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Table 4 shows real growth in the services sector by category. Over the period 2009–2012, real growth exceeded 10 per cent in the wholesale trade, retail trade, restaurants and hotels subsector in countries such as Burkina Faso, Burundi, Chad, Ethiopia, Libya, Nigeria and Togo. Real growth exceeded 10 per cent in the transport, storage and communications subsector in 11 countries, including Burundi (26 per cent) and Nigeria (23 per cent). In the other activities category, growth exceeded 10 per cent only in Equatorial Guinea, Ethiopia and Togo. Identifying the drivers of services growth in Africa requires understanding factors accounting for both an increase in demand for services and in supply. On the demand side, the growth of services is driven by broader economic growth, rising exports revenues and a growing population. As both disposable incomes and urbanization increase, the demand for infrastructure services also rise. During the period 2009–2012, simple correlation coefficients between growth in the services sector and real GDP growth was a high 0.63 and coefficients between services growth and growth in exports was 0.19. On the supply side, the services sector tends to expand as countries undertake commitments to improve access to basic services (for example as undertaken in Ethiopia) and reforms to introduce greater competition among services suppliers, and as regional integration deepens through projects to improve transport and logistics. The services sector was the most important driver of growth in 30 out of 54 countries during the period 2009–2012. Figure 1 shows the sharp expansion of the services sector in real terms in Africa since 2000, which was maintained during the 2008–2009 global crisis. The services sector can play an important role in cushioning the effect of global economic shocks in Africa, by sustaining domestic consumption and domestic output when exports are adversely affected by international crises. Weighted real GDP growth rates were calculated for each African country and the contribution of the services sector to real growth was assessed.2 The analysis reinforced the importance of services as a cushion for national economies at times of global economic shock. During the period 2009–2012, the services sector was the most significant driver of economic growth in 30 out of 54 countries, accounting for more than 50 per cent of real economic growth. The sector accounted for more than 70 per cent of total real economic growth in 12 countries, and in seven of these countries, services accounted for more than 50 per cent of GDP. In Côte d’Ivoire, Madagascar, Mali, Seychelles and Swaziland, the services sector accounted for