The World Bank has released new insights showing how developing countries, especially in Sub-Saharan Africa, can expand job opportunities by tapping into services trade. The report explains that services already play a major role in the global economy and now contribute more jobs and more GDP than manufacturing in most parts of the world. It also notes that services jobs usually pay better than roles in agriculture or manufacturing because they require higher skills. However, many low-income countries have not fully explored these opportunities. According to the World Bank, high-income countries get almost 60 percent of their export-related jobs from services, while the poorest countries get only 20 percent.
The report highlights a major shift in Sub-Saharan Africa. In 2000, services made up about 14 percent of the jobs tied to exports, but this amount doubled in less than twenty years. The World Bank says this progress shows that developing economies can follow two main paths to benefit from services trade. One option is to import more efficient upstream services, which help boost productivity in other sectors. The other is to directly export services, ranging from tourism to financial services to technology-driven support work. The challenge, however, is understanding which policies can create the biggest improvements in productivity, investment, and employment.
To address this, the World Bank and the World Trade Organization introduced newly detailed data on Services Trade Restrictions. The institutions say this data offers a clearer picture of the policies that influence trade in services, which are traditionally harder to measure than trade in goods. For physical goods, customs processes make it easier to track tariffs and quotas. But for services such as transport, tourism, call center operations, or financial products, there is no border checkpoint to observe. The report states that “trade restrictions are embedded in domestic laws and regulations,” which often exist for valid public policy reasons. As a result, identifying and quantifying barriers requires a sector-by-sector review of local laws. According to the World Bank, this is exactly what the new research has done.
This work expands on a 2020 analysis in which researchers studied services restrictions in 68 economies and created the Services Trade Restrictions Indices, known as STRI. In that earlier study, restrictions were identified, rated, and combined into an index that helped countries estimate the potential benefits of removing or easing those restrictions. The new study increases the number of covered countries to more than 134 and now includes all African countries except Eritrea. It also widens the sector coverage. While previous work focused on communications, financial services, and transport, the updated research adds sectors such as computer services, construction, health, and tourism, along with several sub-sectors that were previously not analyzed.
The expanded data makes it possible to compare countries by income level and understand how restrictions differ across regions. The report points out that Africa shows significant variation in how restrictive its services policies are. While the median restrictiveness in each sector is similar to other regions, the range across African countries is very wide. This means some African countries have very open services markets, while others still maintain heavy restrictions.
The World Bank also notes that international agreements appear to influence these patterns. The report points to the Western African Economic and Monetary Union, explaining that “WAEMU has policies on regional banking regulation, as well as initiatives on professional services such as accounting, auditing, and legal.” These policies may help explain the lower and more consistent levels of restrictions across WAEMU countries. There are similar signs of harmonization within the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the East African Community. In contrast, the Regional Comprehensive Economic Partnership shows a wide spread in services restrictiveness, suggesting less coordinated policy approaches among its members.
The findings from this new research will be discussed at a global conference taking place in Geneva on December 3 to 4. The event is jointly organized by the World Bank and the WTO and will focus on how developing countries, especially in Africa, can use policy reforms and capacity building to unlock more opportunities in services trade.
The World Bank says the progress already made by developing countries in opening up services is promising. The institution added that it will “continue to support countries leveraging these possibilities for job creation,” encouraging more governments to pay attention to the potential gains in productivity, investment, and employment by engaging more actively in services trade.
