By Swati Sharma, independent trade law and policy professional; and Neil Balchin, Economic Adviser, Commonwealth Secretariat, London
Services is the fastest growing segment of international trade. Yet, while service exports from least developed countries (LDCs) grew by 9% in 2021, they still accounted for less than 1% of global services trade.
Recognising the potential for trade in services to create jobs and accelerate development, the World Trade Organisation (WTO) adopted a Waiver in 2011 to support LDC service suppliers.
In addition to non-market access preferences, the Waiver enables developed and developing countries to grant direct-market-access preferences to LDCs that would otherwise be inconsistent with the most-favoured-nation rules of the WTO’s General Agreement on Trade in Services. In response, LDCs collectively identified their export interests under the Waiver. Continue reading How to maximise the benefits of the LDC Services Waiver
By Jose Luis Guasch, Former Head of the World Bank Global Experts Group on PPP and Logistics, Professor Emeritus University of California, San Diego
Pedro, a small farmer in the Andes, spends another sleepless night worrying about how to feed his family. He wonders how to improve the productivity of his small crop of vegetables and how to reduce time cost and losses (spoilage) in the process of taking his produce to the market. George is a small and medium enterprise (SME) entrepreneur, who exports his products. He has to face poor and bumpy roads, delays and red tape in securing permits and certifications, cumbersome custom and/or cross border procedures, lack of cooling facilities, losses due to spoilage and even theft, deficient packaging and scale consolidation, low productivity etc. That is the common plight of most SME farmers and producers in emerging economies. The costs of bringing their products to the market hover around 30% of product value, when it should and can be below 10%.
Continue reading “Africa’s next transformation: connecting people and places”
By Tabea Lakemann, Research Fellow, GIGA Institute of African Affairs and University of Göttingen, and Jann Lay, Acting Director, GIGA Institute of African Affairs, and Head of GIGA Research Programme Growth and Development
Learn more about this timely topic at the upcoming
17th International Economic Forum on Africa
Economic development and a sustained, broad-based increase in living standards on the African1 continent are critically connected to the capacity of African economies to create decent jobs at a rate that keeps up with the rapid growth of the workforce. This, in turn, depends on the ability of African governments to develop innovative, tailor-made strategies towards private sector development taking full advantage of countries’ comparative advantages. Private sector development strategies require governments to recognise the significance of informality and to look beyond industrialisation — to the service sector — for private sector growth and job creation.
The potential of informal firms
On average, the informal economy is estimated to make up almost 40% of GPD in Africa.2 Informal firms are typically much smaller than formal ones, but even when controlling for size, they are on average less productive, less likely to access external finance and have less educated managers.3 At the same time, heterogeneity between informal firms is considerable. Some firms exhibit very high marginal returns to capital, and between 28% and 58% of informal entrepreneurs in West Africa are identified as “constrained gazelles” with low capital stocks, but some unrealised growth potential.4 Many informal firms thus have the likely potential to provide an improved livelihood to their self-employed owners and family members engaged in the business.
Continue reading “Services, informality and productivity in Africa”