(Ecofin Agency) - Digital trade is experiencing impressive growth in Africa. Although several challenges remain, countries and regional institutions are making significant efforts to support the sector's development.

In 2023, Africa’s exports of information and communication technology (ICT) services reached $9.2 billion, marking a 5.4% increase from the previous year. This growth highlights the expanding tech sector across the continent, according to a report by Tralac (Trade Law Centre) on digital trade in Africa, published in September 2024.

The geographical breakdown of these exports shows that North Africa leads the market with $4.49 billion in ICT service exports for 2023. Following North Africa, East Africa exported $2.05 billion, while Southern Africa contributed $1.4 billion. West Africa and Central Africa reported exports of $1.06 billion and $240 million, respectively.

African digital service exports cover a wide range of areas. For example, in Ghana, business, specialized, and technical services, including business process outsourcing (BPO), accounted for 77% of total service exports, according to a 2023 report from the World Trade Organization (WTO). In Morocco, the outsourcing of engineering services, such as software development, electronic design, mechanical engineering, and civil engineering, has seen significant growth, increasing by 35% annually between 2019 and 2022.

Despite this positive trend, African exports of ICT services represent only 0.85% of the global total, as noted in the Tralac report. This indicates that the continent has substantial room for growth to become a key player in the global digital economy.

The WTO report also points out that a lack of harmonized regulations and standards among African countries hampers cross-border trade in ICT services. Additional challenges, such as inadequate infrastructure, a shortage of digital skills, and limited access to financing, slow down the widespread adoption of digital solutions.

Many African countries are implementing ambitious strategies to develop their digital ecosystems. The African Continental Free Trade Area (AfCFTA) has introduced a protocol on digital trade to harmonize regulations and facilitate online exchanges among African nations. Regional initiatives, such as the COMESA Digital Free Trade Area, also promote e-commerce and digital integration among member states.

The outlook appears promising. According to projections from the WTO, African service exports could reach approximately $74 billion between 2023 and 2040, with annual growth exceeding 7%.