11357 Integrating Africa: From Threads to HubsPublic Disclosure Authorized Background Paper Completing the AfCFTA Mosaic Liberalization of Trade in Services Karlygash DairabayevaCarmen EstradesMaryla Maliszewska Trade, Competition, and BusinessGlobal DepartmentApril 2026 A verified reproducibility package for this paper isavailable athttp://reproducibility.worldbank.org,clickherefor direct access. Policy Research Working Paper11357 Abstract This paper uses the Services Trade Policy Database andServices Trade Restrictions Index to assess services tradeliberalization in Africa, building on previous World Bankstudies of the African Continental Free Trade Area. Thefocus is on refining reductions of non-tariff measures inservices using sector- and mode-specific policy shocks.The results suggest that reducing sectoral restrictions could boost services exports by 4 percent overall in 2035 andby 14 percent within Africa, with increased imports fromoutside the region. Key manufacturing exports like textilesand processed foods are also projected to grow, reflectingthe role of services as inputs across industries. Conservativescenarios indicate that most African economies benefit fromreductions in non-tariff measures affecting services trade. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely thoseof the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank andits affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Completing the AfCFTA Mosaic: Liberalization of Trade in Services* Karlygash Dairabayeva± Carmen Estrades£ Maryla Maliszewska§ JEL Classification: F1, F14, F15, L86, L88 Keywords: AfCFTA, services trade liberalization, NTMs, services trade restrictiveness index, digitaltrade The African Continental Free Trade Area (AfCFTA) connects 1.3 billion people across 55 countries with acombined gross domestic product (GDP) valued at US$3 trillion as of 2022 (IMF, 2023). Similar to otherregions, the AfCFTA region has experienced a decline in the contribution of agriculture to both GDP andemployment over the last 30 years. This decline has been counterbalanced by the growing proportion ofthe service sector (Nayyar, Hallward-Driemeier, and Davies, 2021). The changing characteristics of variousservices, marked by increased tradability, technological intensity, and scalability, have positioned thesector as a crucial driver of productivity, competitiveness, and improved living standards (Nayyar and Cruz,2019). Diversification can be driven not only by increasing opportunities for services exports, but also byutilizing and obtaining competitively priced services as inputs in other industries. Services play a vital rolein cross-border production networks, such as regional and global value chains, accounting for more than50 percent of the value-added in world gross exports, and about 30 percent of the value of worldmanufactures’ exports (Nayyar et al., 2021; WTO and World Bank, 2023). The proportion of intra-Africantrade remains relatively limited with most of trade being directed outside Africa (about 10%-15% forgoods and less than 10% for services) (seeFigure 1,Figure 2). Despite a rise in Africa's services exports before the pandemic, its share in global services exportsremained relatively constant at around 2%-2.5% of world services exports, showing no significant changeover time (see Figure 2). The intra-African trade in services continued to display limited growth, withexports and imports both comprising less than 10% of total trade, mirroring the patterns seen inmerchandise trade.Most services trade of African countries is directed outside the continent, with 10countries accounting for 80% of total service exports (IMF, 2023). The intra-AfCFTA trade in services islimited and mainly focuses on transportation, travel, and other business services, resembling African tradewith the world (Figure 3,Figure 4). Intra-African services trade remains modest (under 10% of total trade)but increasingly driven by a core group of AfCFTA countries, including the Arab Republic Egypt, SouthAfrica, Morocco, and Kenya. Trade is concentrated in travel, transport, and business services, and itsstructure closely mirrors Africa’s trade with the world. This paper is part of a series of three World Bankpapers applying a computable general equilibrium analysis (CGE) to explore different features of theAfrican Continental Free Trade Area (AFCFTA). The first paper (World Bank, 2020) explored the effects oftariff liberalization, red