Electronic copy available at: https://ssrn.com/abstract=3177505

Intra-African Trade, Digital Technologies and

Canada’s Foreign Policy Choices1

Fred Olayele2

December 2017

Abstract This paper examines the impact of recent advances in digital technologies on intra-African trade, while paying attention to the informal economy and services trade, in addition to other important issues like trade-related infrastructure, trade policies and the macroeconomic environment. We advance a framework comprising Aid for Trade (AfT), Africa Regional Integration Index (ARII), Financial Inclusion, and the Boosting Intra-Africa Trade (BIAT) initiative, among others, to assess the implications of the growing link between financial technology (FinTech) services penetration and intra-regional trade for Africa’s informal sector and financial disintermediation. Our analysis shows that in order to foster increased use of digital finance in Africa, we must pay attention to the varying levels of digital technology adoption by users – particularly women, micro, small and medium-sized enterprises (MSMEs). We offer possible interpretations of the results, while highlighting useful lessons for Africa-specific trade programming and Canadian foreign policy. JEL Classification: F13, O17, O31, O33 Keywords: Digital technologies, intra-African trade, informal sector, trade policy, foreign policy

1 This working paper has been made available for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. All errors remain my own. 2 Sprott School of Business, Carleton University, Ottawa K1S 5B6, Canada. Email: fred.olayele@carleton.ca

Electronic copy available at: https://ssrn.com/abstract=3177505

2

1.0 Introduction

Trade remains an essential driver of growth and development. The role of technology as an enabler of trade, based on the Ricardian model and productivity gains, is well established by economic theory3. Technology continues to revolutionize the global financial services landscape. Over the last decade, financial technology (FinTech) has advanced to become one of the fastest-growing sectors in the global technology industry (Dietz, Vinayak and Lee; 2016). It is becoming the much-needed game changer as Africa transitions from the margins to the mainstream of global commerce4.

According to the World Trade Organization (2017):

Digital connectivity is an essential building block of trade integration. Without available, affordable digital connections, individuals and firms cannot access the marketplace of the world-wide web. The digital divide, which continues to affect some 3.9 billion people, is itself a market access divide. Lack of digital connectivity reinforces economic isolation (p.5)

Compared to regions like Europe and North America, intra-African trade is low. This reflects, partly, a relatively lower level of integration and development than in other regions (International Monetary Fund, 2016).The continent’s poor performance on the intra-regional trade metric poses a substantial challenge for development. To put this into perspective, Africa is the second-largest continent in the world; bigger than China, India, the United States, Japan, and most of Europe, combined (African Development Bank, 2014). About 1.2 billion people live in Africa, with a collective GDP of roughly $ 3.3 trillion; the U.S. has a population of 323 million, with about $19 trillion in GDP. The low intra-regional trade on the continent can be explained by, among other factors, limited market size, fragmented economic space, and both demand- and supply-side constraints (Ancharaz, Mbekeani and Brixiova; 2011). The case for increased economic integration and intra-African trade has never been stronger5. Intra-African trade has the greatest potential for building sustainable economic development and integration (AfDB, 2017). This paper examines the impact of recent advances in digital technologies, particularly FinTech, on intra-regional trade in Africa. We analyze the impact of financial innovations on the continent’s regional integration agenda, while paying attention to the informal economy and

3 See Dornbusch, Fischer and Samuelson (1977); and Kortum (1997) 4 The emergence of the African ICT ecosystem was bolstered by a recent tour of tech hubs in Africa by the CEO of Facebook, Mark Zuckerberg 5 For instance, the African Union is spearheading the continent’s regional integration agenda through the Continental Free Trade Area (CFTA): a framework geared towards creating a single continental market for goods and services, with free movement of business persons and investments.

3

trade in financial services – in addition to other important issues like trade-related infrastructure, trade policies and the macroeconomic environment. The implications of FinTech for Africa’s informal trade and financial disintermediation – particularly women, small and medium-sized enterprises (SMEs) – are examined. We offer possible interpretations of the trends observed in our analysis, while highlighting useful lessons for Africa-specific trade programming and Canadian foreign policy. The paper proceeds as follows. The second section reviews related literature and provides a conceptual framework for analyzing the key metrics of interest. Section 3 presents data, methods and stylized facts, while the fourth section reviews the available empirical evidence and what this means for Africa in terms of opportunities and challenges. Section 5 presents conclusions and implications from a Canadian foreign policy viewpoint.

2.0 Literature Review and Conceptual Framework

Technology continues to change the dynamics of international trade through its impact on, among other things, transportation and supply chain logistics. Economists generally model frictions that impede trade flows as trade costs; extensive literature abounds (e.g. Porto, Canuto and Morini, 2015; United Nations Economic Commission for Africa, 2013; and Zaki, 2014) on the impact of trade facilitation on trade flows. Inefficient or completely absent regional payment systems impede cross-border trade. Harmonization of standards on information exchanges, border cooperation and related initiatives have benefited from advances in technologies, and in turn, improved trade logistics.

Information and communications technology (ICT) has contributed immensely to much of the recent decline in tariff barriers due to falling surface transportation costs because of technological advances like containerization, port modernization, and advanced logistics and trade facilitation (Hanna and Knight, 2012). For example, supply chains have become more connected, secure, and efficient due to technological innovations like geospatial information systems and automatic identification and data capture; all these enable precise monitoring of goods as they move through the logistics chain (Estevadeordal, 2017).

2.1 Trade Finance

Trade finance remains a huge challenge in Africa; this brings to the fore the role of technology in boosting intra-regional trade, fostering regional integration and reducing trade finance gap in Africa (AfDB, 2017). Trade facilitation enhances competitiveness by lowering transaction costs6. Mobile and digital technologies continue to increase the speed at which countries are connected to international markets, with disproportionately higher benefits for emerging markets and developing economies. The ICT revolution of the past decade is changing the continent’s financial

6 The World Bank Group’s Trade Facilitation Support Program6 (TFSP) implements trade facilitation reforms to help developing countries improve their trade systems, services, and practices for increased trade, investments, job creation, and private sector competitiveness.

4

services industry; Voorhies, Lamb and Oxman (2013) conclude that increased adoption of digital payments and other digital products by individuals and businesses increases overall benefits to all users due to network effects.

FinTech is a relatively new sector in the finance industry; it comprises an entire ecosystem that incorporates technology in trade facilitation. For instance, the U.S. Department of Commerce (2016) identifies the following as important factors needed to support a robust FinTech sector: telecommunications, widespread electronic payment acceptance devices, big-data-supported credit information systems, consumer education and sound and efficient regulations that support innovation and provide sufficient consumer protection. Financial sector reforms have paid off across a handful of African countries. Rural credit is problematic; among other issues, the challenge of delivering financial services to dispersed farming communities in remote areas poses a major challenge to commerce (Mullineux and Murinde, 2014). Small rural cross-border traders often have to rely exclusively on informal credit, based on networks of trust organized among trader-wholesalers, wholesaler-retailers and retailers (UNECA, 2010).

2.2 Boosting Intra-Africa Trade Premised on the notion that the removal of non-tariff barriers will go a long way in helping intra-regional trade diversification on the continent, the Assembly of the Heads of State and Government of the African Union endorsed the decision to fast-track the Continental Free Trade Area (CFTA) and the Action Plan for Boosting Intra-Africa Trade (BIAT), during its 18th Ordinary Session held in Addis Ababa in 2012. In particular, the BIAT initiative is aimed at helping Africa build capacity in order to leverage the benefits that accrue from trade for the attainment of sustainable economic growth and development. The BIAT Action Plan is organized under seven priority clusters: trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, trade information and factor market integration (UNECA, 2012a).

2.3 Aid for Trade

The Aid for Trade (AfT) initiative is part of the Sustainable Development Goals (SDGs) aimed at promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. Prior to the launch of AfT during the WTO Hong Kong Ministerial Conference in December 2005, a number of trade policy experts and scholars had written extensively on the need to provide technical assistance to developing countries in order to help them address adjustment costs, in addition to positioning them to benefit from the competitiveness and productivity gains emanating from increased market access (see Finger and Schuler, 2000; and Zedillo, Messerlin and Nielson, 2005).

5

AfT provides a framework to help address major supply-side capacity and trade-related infrastructure constraints limiting the ability of developing and least-developed countries to effectively engage in international trade. Among other things, AfT includes technical assistance (i.e. helping countries to develop trade strategies, negotiate more effectively, and implement outcomes); infrastructure (e.g. building the roads, ports, and telecommunications that link domestic and global markets); productive capacity (i.e. investing in industries and sectors so countries can diversify exports and build on comparative advantages); and adjustment assistance (i.e. helping with the costs associated with tariff reductions, preference erosion, or declining terms of trade)7.

2.4 Informal Trade

The informal sector8 remains an important part of Africa’s economy. The Economist (2017) puts the size of Africa’s underground economy at 40 per cent of its GDP9; estimates from the AfDB10 show this is over 50 per cent. Among other factors, AfDB attributes such huge informal economy to limited access to technology and poor infrastructure, which further attenuate the weak data collection systems on the continent (AfDB, 2013).

Africa’s informal markets have relative costs and benefits. In terms of benefits, for instance, in the absence of trade-related regulations, the lower transaction costs resulting from informal cross-border trade may foster an entrepreneurial business environment, leading to increased intra-regional trade activity in the short to medium-term (Lesser and Moisé-Leeman, 2009). Rogan and Cichello (2017) argue pointedly that not only does the informal economy in South Africa contribute a decent share of total employment, but it also contributes to poverty reduction. In a bid to caution policymakers to ponder the critical role of the informal economy

7 See WTO’s Aid for Trade fact sheet: https://www.wto.org/english/tratop_e/devel_e/a4t_e/a4t_factsheet_e.htm

8 The International Labour Organization lists some of the characteristics of informal employment as lack of protection in the event of non-payment of wages, compulsory overtime or extra shifts, lay-offs without notice or compensation, unsafe working conditions and the absence of social benefits such as pensions, sick pay and health insurance; in addition to a situation where women, migrants and other vulnerable groups of workers who are excluded from other opportunities have little choice but to take informal low-quality jobs: http://www.ilo.org/global/topics/employment-promotion/informal-economy/lang--en/index.htm

9 With the silver lining that compared to Latin America, Africa’s underground economy is receding faster.

10 See the article, “Recognizing Africa’s Informal Sector”, by the AfDB: https://www.afdb.org/en/blogs/afdb-championing-inclusive-growth-across-africa/post/recognizing-africas-informal-sector-11645/

6

before embarking on policy reforms that may adversely affect the livelihoods of the workers in the sector, they pose the question: “If you are considering a policy that would eliminate 100 typical informal self-employed jobs, ask yourself the following, “Would I be willing to lose 63 typical formal sector jobs to implement this policy?” (Cichello and Rogan, 2017; p.22). On the other hand, an informal economy may be counterproductive in the long run due to efficiency losses, decreased government revenue and unreliable trade statistics on Africa’s economic growth and development prospects (Lesser and Moisé-Leeman, 2009). The digital revolution continues to unleash innovations across the financial services landscape thereby enabling previously “unbanked” individuals in developing economies and emerging markets to be catered for. About two billion people are unbanked in emerging markets; digitalization enables innovative FinTechs that offer a greater number of individuals access to financial products and services (International Finance Corporation, 2017). Undoubtedly, digital and financial technologies remain critical in optimizing the transition of micro, small and medium-sized enterprises (MSMEs) from the informal to the formal sector. This has huge implications for the high representation of women, low wages and lack of decent work that characterize Africa’s informal economy (Verick, 2006). 2.5 Services Trade Africa’s services economy remains a key wealth generator; this sector contributes about half of the continent’s GDP and is growing twice as fast as the global average (Stephenson and Tumuhimbise, 2015). Contrary to orthodox economic prescriptions that emphasize a reallocation of labour from low-productivity activities, such as subsistence agriculture, to the industrial sector as a precondition for structural economic transformation, the services sector continues to play an increasingly important role in the continent’s development process. For instance, The Economist (2011) alludes to how India’s services economy has turned its companies into global competitors, and its backwater cities into wealthy technology clusters. The global digital revolution and modern technologies adoption are transforming business operations and processes on the continent, pushing trade in services to the front burner of Africa’s growth debate. For instance, while a traditional, non-tradable service like a restaurant meal or a haircut is largely unable to benefit from specialization and economies of scale, the opposite is the case for modern services like digital solutions and outsourced business processes. This underscores the debate on the potential benefits of the global digital revolution; precisely, the notion that African economies can leapfrog manufacturing11 and go straight from agriculture to services12.

11 According to the United Nations Industrial Development Organization 2016 Report, Africa accounts for less than 1.5 per cent of the world's total manufacturing output 12 With, perhaps, the exception of South Africa, the continent’s most industrialized economy, with a relatively robust manufacturing sector

7

As digital technologies continue to make tradable services easier to export cross-border, countries on the continent are adopting technologies that are suitable to their specific services economies. For instance, Stephenson and Tumuhimbise (2015) examine five emerging regional services clusters in Africa: air transport services in Ethiopia, banking services in Nigeria, business process offshoring and ICT services in Senegal, cultural services in Burkina Faso, and education services in Uganda. They find that while substantial services exports go to the regional market, a meaningful portion flows beyond the continent. Despite the significant progress made on the services trade front, significant barriers remain. Increasing the contribution of this vital component to overall growth is important in the continent’s trade policy agenda.

2.6 Financial Inclusion and Trade in Financial Services

ICT remains the backbone of the global digital economy, due to its impact on productivity growth in a knowledge-based economy. The forces of globalization continue to reinforce the importance of cross-border trade in financial services13 in the international economy. Despite the globalization of finance and the plethora of innovations made possible by recent advances in technological capabilities, financial inclusion remains low and uneven in Africa. Cross-border banking drives growth and societal welfare due to competiveness gains from efficiency, new investments and skills (Claessens, Demirgüç-Kunt and Huizinga, 2001; Cull and Martínez Pería 2010; and Dages, Goldberg and Kinney, 2000). The Action Plan for BIAT and the proposed CFTA framework both recognize services trade as a key driver of increased intra-African trade and competitiveness; this underscores the importance of financial services. The bourgeoning financial services industries in Nigeria and Mauritius, and the digital innovations that have changed Kenya’s financial inclusion picture, are good examples of how cross-border banking can effectively aid intra-Africa trade. The importance of inclusive growth in Africa has received enormous attention in the literature (see United Nations Conference on Trade and Development, 2017; and AfDB, 2011). Improved financial inclusion remains a major prerequisite for inclusive growth; in addition to insulating economies against shocks during an economic downturn, by reducing borrowing constraints, financial development can also be a growth driver (Papadavid, 2016).

13 The Organisation for Economic Co-operation and Development (OECD) defines cross-border trade in financial services as the provision of financial services by a financial firm located in one country to a customer residing in another country without the establishment of a commercial presence, such as a branch or subsidiary, in the country of the customer (the “host country”): http://www.oecd.org/finance/financial-markets/1923208.pdf

8

The 2017 Financial Inclusion Action Plan of the Global Partnership for Financial Inclusion (GPFI) summarizes the importance of financial inclusion thus:

There is an increasing recognition of financial inclusion as a global priority, capable of bolstering sustainable, balanced, inclusive economic growth at the macro level and promoting economic and social inclusion at the household and enterprise level, especially among financially excluded and underserved populations” (p. 6, GPFI, 2017)

2.7 Reflection The discussion in this section provides a framework for assessing the implications of the growing link between FinTech services penetration and international trade, with implications for Canada-Africa relations. The remaining sections focus on the mechanisms through which a wide range of supply-side issues pose obstacles to trade within Africa, while key foreign policy implications are highlighted for Canada.

3.0 Data, Methods and Stylized Facts

3.1 Data and Methods

It is worth noting how this work builds on existing research to identify the impact of digital financial innovations on intra-regional trade in Africa. Our analysis draws largely on a literature review, although it also incorporates additional information sourced from relevant international and regional organizations (e.g. WTO, World Bank, AfDB, UNECA and the African Union Commission), consulting firms (in particular, Mckinsey & Company and the McKinsey Global Institute), African countries and trade policy experts. The empirical data come from three main sources: The International Monetary Fund (IMF) Direction of Trade Statistics (DOTS) database; AUC, UNECA and AfDB’s African Regional Integration Index; and the Bill & Melinda Gates Foundation’s Financial Services for the Poor (FSP) initiative14. 3.2 Descriptive Statistics Table 1 below shows that Africa's most advanced economy, South Africa, is the continent’s largest intra-regional importer and exporter, with $2 billion (B) and $14B worth of merchandise exports and $9B and $27B in merchandise imports in 2001 and 2015, respectively. Namibia and Botswana trail South Africa on the exports metric. The continent’s most populous nation, Nigeria, imported $6B worth of goods (10 per cent of all imports) in 2015, followed by Egypt at $3B (4.6 per cent).

14 See Voorhies, Lamb and Oxman (2013)

9

Table 1: Top 10 Intra-African Traders* Panel A: Exports

Country 2001 ($B) 2001 (%) 2015 ($B) 2015 (%)

South Africa 2.3 18.4 13.9 20.6 Namibia 0.0 0.1 5.3 7.9 Botswana 0.0 0.3 5.3 7.8 Zambia 0.6 4.5 3.7 5.4 Mozambique 0.7 5.8 3.0 4.5 Zimbabwe 0.8 6.8 2.6 3.9 Ghana 0.6 5.2 2.5 3.7 Congo** 0.3 2.3 2.5 3.7 Côte d'Ivoire 0.5 4.3 2.5 3.6 Kenya 0.4 3.0 2.1 3.1

Africa 12.5 100 67.3 100

Panel B: Imports

Country 2001 ($B) 2001 (%) 2015 ($B) 2015 (%)

South Africa 8.6 54.6 26.7 42.6 Nigeria 1.6 10.2 6.3 10.0 Egypt 0.4 2.8 2.9 4.6 Zambia 0.1 0.9 2.4 3.8 Kenya 0.6 3.9 2.1 3.4 Namibia 0.0 0.2 2.1 3.4 Algeria 0.3 2.0 1.7 2.7 Angola 0.0 0.1 1.7 2.6 Morocco 0.2 1.0 1.6 2.6 Côte d'Ivoire 1.0 6.3 1.5 2.4

Africa 15.8 100 62.7 100

Source: IMF, Direction of Trade Statistics *Sorted on 2015 **Democratic Republic of the Congo Panels A and B in Table 2 below show some interesting trends in both intra- and extra- regional trade. The advanced economies accounted for 67 per cent and 48 per cent of Africa’s exports in 2001 and 2015, while emerging and developing Asia’s share increased from 7.5 per cent to 22 per cent, respectively. Intra-African exports only advanced by 8.3 percentage points over the same period A similar pattern is observed for imports, with intra-African imports witnessing a disappointing decrease from 13.8 per cent to 13.7 per cent over the 2001-2015 period.

10

Table 2: Destinations and Origins of Sub-Saharan Africa’s Exports and Imports Panel A: Exports

Region 2001 ($B) 2001 (%) 2015 ($B) 2015 (%)

Advanced Economies 81.8 66.6 175.2 47.9 Emerging & Developing Asia 9.2 7.5 81.6 22.3 Europe 1.9 1.5 7.2 2.0 Africa 12.5 10.1 67.3 18.4 Middle East 2.5 2.0 13.0 3.6 Sub-Saharan Africa 11.4 9.3 62.0 17.0 China 2.3 1.9 35.4 9.7 United States 19.1 15.6 20.6 5.6 Canada 1.4 1.1 4.8 1.3

Total 123 100 365.6 100

Panel B: Imports

Region 2001 ($B) 2001 (%) 2015 ($B) 2015 (%)

Advanced Economies 72.0 63.1 199.0 43.6 Emerging & Developing Asia 8.4 7.4 109.9 24.1 Europe 4.2 3.7 22.7 5.0 Africa 15.8 13.8 62.7 13.7 Middle East 9.2 8.0 37.4 8.2 Sub-Saharan Africa 15.0 13.1 57.8 12.7 China 3.6 3.2 70.2 15.4 United States 8.7 7.6 24.8 5.4 Canada 1.0 0.9 3.4 0.7

Total 114.1 100 456.8 100

Source: IMF, Direction of Trade Statistics 3.3 Stylized Facts Canada’s share of exports emanating from Africa stood at $1.4B and $4.8B in 2001 and 2015, albeit relative shares remained largely the same at 1.1 per cent and 1.3 per cent, respectively (Table 2, Panel A). These figures seem reasonable when compared to 1.9 per cent ($2.3B) and 9.7 per cent ($35.4B) for China, and 15.6 per cent ($19.1B) and 5.6 per cent ($20.6B) for the United States, respectively15. The picture is not significantly different on the imports side. Canada's engagement in Africa has traditionally focused on development assistance to address disease-specific initiatives; build capacity to tackle security and peace challenges; promote human rights and governance reforms; and reduce poverty for sustainable development. In commercial terms, the extractives sector accounts for a significant portion of Canadian interest on the continent. Between 2008 and 2013, the Government of Canada signed a plethora of

15 This is plausible when we take into account the relative sizes of these two economies.

11

foreign investment promotion and protection agreements (FIPAs) with countries16 on the continent. Hitschfeld and Schorr (2013) predict that over time, the pattern of Canada’s commercial engagement in Africa will be similar to the trajectories of the Asian Tigers17.

4.0 Empirical Results and Discussion As discussed under the literature review and methodology sections, recent advances in digital technologies are spurring innovations, which in turn, continue to change intra-and extra-regional trade patterns in Africa. Next, we take a closer look at two additional metrics that will help provide a more nuanced insight on the interrelatedness of intra-regional trade and the FinTech ecosystem: (i) Africa Regional Integration Index and (ii) Financial Inclusion Metric. These are explained further below: 4.1 Africa Regional Integration Index (ARII) Jointly developed by the AfDB, AUC and UNECA, the ARII is a regional integration tool that is based on the following five socioeconomic dimensions18: (i) trade integration (ii) regional infrastructure (iii) productive integration (iv) free movement of people and (v) financial and macroeconomic integration. The index is constructed for eight regional economic communities (RECs) across the continent. Based on Table 3, the trade integration and financial and macroeconomic integration (FMI) dimensions produce the highest (0.540) and lowest (0.381) scores, respectively. According to the ARII Report 2016, “Financial and macroeconomic integration has been limited across the RECs, including ensuring the convertibility of currencies or coordination of macroeconomic policies” (p.16).

16 Details of all FIPAs with Canada’s trading partners are available here: https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/index.aspx?lang=eng 17 This paper argues that many of the hitherto cautious Canadian businesses will develop increased appetite for Africa once they realize their competitors are making supernormal profits on the continent. The authors add that due to market saturation, these late entrants may end up playing catch-up, make less profit and unable to help advance the continent’s early market maturation objectives.

18 These five dimensions are further divided into 16 indicators selected on the basis of their sensitivity to African regional integration.

12

Table 3: Africa Regional Integration Index

Source: ARII Report (2016) Notes: CEN-SAD = Community of Sahel–Saharan States; COMESA = Common Market for Eastern and Southern Africa; EAC = East African Community; ECCAS = Economic Community of Central African States; ECOWAS = Economic Community of West African States; IGAD Intergovernmental Authority on Development; SADC = Southern African Development Community; and UMA = Arab Maghreb Union

On the FMI dimension, 37 countries emerge as high performers across all eight RECs; the Economic Community of West African States (ECOWAS) ranks as the highest performing REC, while the East African Community (EAC) has the lowest score. At the country level, the ARII shows that 19 top performing countries record high scores on at least three dimensions, and are both deeply and broadly integrated. No doubt, much work remains to be done in order to fully harness the potential of increased interconnectedness to help mitigate the adverse impact of fragmented markets and efficiency losses that limit the contribution of intra- and extra-African trade to prosperity on the continent. As the ARII Report 2016 puts it:

A series of actions can make a difference, including promoting banking across borders, increasingly outside of the regional financial centres; standardizing regional payments; putting in place multilateral fiscal guidelines; and joining up policy on inflation, public finance and exchange rate stability. In turn, the continent will see more predictable conditions for cross-border trade and investment to thrive and it will help to light up Africa’s financial future (p.37).

4.2 Financial Inclusion Metric Among other things, digital finance aids larger productivity gains and fosters financial inclusion in a cost-effective, fast and convenient manner due to its inherent ability to leverage technology for financial services delivery. An economic impact study by Manyika, Lund, Singer, White and Berry (2016) finds that by 202519, emerging economies could record an incremental value of $3.7 trillion in economic activity as a result of digital finance. Findings from the study further reveal

19 Analysis is premised on a 6 per cent base case projection

13

that while digital finance has a larger economic impact on lower-income countries like Ethiopia, India and Nigeria (adding between 10 to 12 percent to GDP ), middle-income countries like China and Brazil benefit sizably, too (4 to 5 percent to GDP). To corroborate the findings above, we discuss below findings from Voorhies, Lamb and Oxman’s (2013) study on financial inclusion. The FSP report is based on a review of the payment systems20 in six countries: Nigeria, Kenya, India, China, the United States, and the Netherlands. In addition, more than 100 industry experts across these countries were interviewed. Tables 4 and 5 below summarize the results of Kenya and Nigeria’s payment system and financial inclusion.

20 Using a structured and consistent dataset on payment systems based on McKinsey’s Global Payments

Map

Table 4: Financial Inclusion Overview: Kenya

Source: Voorhies et al. (2013)

15

Table 5: Financial Inclusion Overview: Nigeria

Source: Voorhies et al. (2013)

4.3 Results: Kenya and Nigeria Based on a survey with about 6,500 respondents (adults 18 years or older), 40 per cent of adults in Kenya have formal access, with higher financial inclusion in urban areas, among men, and those with at least primary education. The report concludes that overall, financial inclusion in Kenya is in the low-medium performance range; only 19 per cent of women have formal financial accounts. A similar picture emerges for Nigeria: only 30 per cent of adults are banked, with greater inclusion in urban areas, in the South and among men. Again, only 23 per cent of Nigerian women have formal financial accounts. The special report21 with country-specific data on payments systems and financial inclusion concludes that in Kenya, “Formal banking products are perceived to have little relevance for many of the poor who have limited balances and irregular income. Consumers are also averse to ongoing monthly maintenance fees” (FSP Kenya, p. 10). In Nigeria22, “Financial literacy is a major concern as the less educated find account opening, deposits and withdrawals intimidating and stressful” (FSP Nigeria, p.10). Among other things, our analysis here shows that in order to foster increased use of digital finance in Africa, we must pay attention to the varying levels of digital technology adoption by users. For instance, in a bid to support countries in achieving their financial inclusion goals, the GPFI gauges the state of financial inclusion23 and digital financial services. In particular, the GPFI puts a lot of emphasis on underserved groups (i.e. the poor, women, youth, and people living in remote rural areas) and vulnerable groups (e.g. elderly people, migrants, forcibly displaced persons are disproportionally excluded from the financial ecosystem). 4.4 BIAT and AfT The action plans under the BIAT aim to help leapfrog trade as a tool for increased regional and global market integration (UNECA, 2012a). Relatedly, AfT continues to aid digital capacity building, in some form or another; for instance, a large chunk of Africa’s AfT is targeted at infrastructure and capacity building. With AfT as a major policy tool, it is important to ensure development assistance is well-targeted and aligned to ensure the continent’s structural transformation objective is actualized in an optimal fashion (Sommer, Suominen and Luke, 2017).

21 The link to the special report annex with Kenya-specific data is available here: https://docs.gatesfoundation.org/Documents/Fighting%20Poverty%20Profitably%20Report%20Kenya%20Appendix.pdf 22 The link to the special report annex with Nigeria-specific data is available here: https://docs.gatesfoundation.org/Documents/Fighting%20Poverty%20Profitably%20Report%20Nigeria%20Appendix.pdf 23 The GPFI measures financial inclusion in three dimensions: (i) access to financial services; (ii) usage of financial services; and (iii) the quality of the products and the service delivery.

17

4.5 Implications for Canadian Foreign Policy The Government of Canada’s “Progressive Trade Agenda” is focused on increased and diversified trade and foreign direct investment as a means for creating a strong, inclusive economy24. Global Affairs Canada’s 2017/2018 Departmental Plan states, “Work with African partners to strengthen institutional and regulatory capacity to help build and grow small and medium-sized enterprises that provide opportunities for the employment of women and youth” (p. 23). Undoubtedly, the analysis so far underscores the importance of gender mainstreaming. Clearly, this has significant implications for the Feminist International Assistance Policy (FIAP)25 of the Government of Canada. Among other things, the FIAP supports targeted investments, partnerships, innovation and advocacy efforts with the greatest potential to close gender gaps and improve everyone’s chance of success. A September 22, 2017 news release26 by Global Affairs Canada quotes the Canadian Minister of International Trade, François-Philippe Champagne, thus:

Canada’s progressive approach to trade is focused on further growing trade and investment relationships with existing partners, as well as diversifying into new and rapidly growing markets in Asia and South America. This comprehensive and strategic vision aims to help Canadian businesses expand their markets, which in turn creates more well-paying middle-class jobs for Canadians.

While the Minister’s emphasis on Asia and Latin America is logical and compelling for many reasons, it is also important to recognize Africa’s much anticipated emergence as the next pole of global growth (see UNECA, 2012b). As discussed under section 2, the informal sector remains an important part of Africa’s economy. At close to 50 per cent, The Economist (2017) notes that compared to Latin America, Africa’s underground economy is receding faster. This has major implications for Canada’s future digital economy. In particular, since women are more disproportionately represented in Africa’s informal economy, this pushes the FIAP to the front burner of the policy debate on Canada-Africa trade and the digital economy (see Verick, 2006). The FIAP’s

24 Among other things, Global Affairs Canada’s 2017-18 priorities include advancing the government’s progressive and inclusive agenda. See full details here:http://www.international.gc.ca/gac-amc/priorities-priorites.aspx?lang=eng 25 In June 2017, the Government of Canada launched the FIAP: A policy initiative aimed at advancing, gender equality and the empowerment of women and girls as the most effective way to reduce poverty and build a more inclusive, peaceful and prosperous world. Full details of the FIAP available on the Government of Canada website: http://international.gc.ca/world-monde/issues_development-enjeux_developpement/priorities-priorites/policy-politique.aspx?lang=eng 26 See full news release here: https://www.canada.ca/en/global-affairs/news/2017/09/canada_is_a_tradingnationinternationaltradeministertoaddressthec.html

18

emphasis on gender mainstreaming and increased inclusive growth will support Canada’s long-term trade and investment objectives for development on the continent. According to Manyika et al. (2016), “Digital finance has the potential to provide access to financial services for 1.6 billion people in emerging economies, more than half of them women” (p. iv ). An increased Canada-Africa services trade and investment will go a long way in paving the way towards achieving some of the objectives of the FIAP. Again, this underscores the importance of digital innovation in driving trade growth, through its impact on reducing transaction costs, and integrating less developed economies into global and regional trade and value chains. We conclude this section with the below caption from the ARII Report (2016):

To get the dimensions of regional integration to work together will take a series of actions on the ground, led by well thought-out strategies, matching policy reforms and backed up by capacity building. It will take political commitment and leadership as well as resources and networks to be mobilized. At the same time it will take engagement from Africa-wide organizations, regional bodies, governments, policy makers, business, civil society, researchers, development partners, the media and the public (p. 27).

5.0 Policy Recommendations and Conclusions Despite the many advances and current efforts on regional integration in Africa, barriers to services trade remain substantial. As technological advances continue to drive services tradability, leading to greater prospects for developing countries to create additional economic opportunities with greater income and productivity, the services industry in the industrialized countries27 stand a chance to benefit – from both a commercial and development assistance perspective. 5.1 Policy Recommendations As a good starting point for developing a more coherent approach to the various elements of Canada’s progressive trade, we proffer in this section five policy recommendations. These recommendations are designed to reorient certain inconsistent, and sometimes confusing, aspects of Africa-specific Canadian trade and foreign investment policy objectives.

27 According to a 2014 report by Invest In Canada, the Government of Canada’s agency that promotes and attracts foreign direct investment into the country, close to 37,000 companies make up Canada’s financial services sector and are spread out across the country, with Toronto, Montréal, Calgary and Vancouver representing the largest employment hubs: http://www.international.gc.ca/investors-investisseurs/assets/pdfs/download/Financial_Services.pdf

19

Among other things, these are intended to help create a more strategically beneficial Canada-Africa partnership, which, according to the progressive agenda makes, “trade more responsive to the needs of entrepreneurs and small-business owners, in particular women28.” Recommendation 1: Canada should expand its strategic, commercial and digital links with Africa in order to take advantage of the rapid urbanization and rising household consumption and business spending on the continent.

A HuffPost Canada article by Engler (2016) succinctly explains how extractive economies dominate Canada’s aid efforts in Africa. Citing about a dozen countries on the continent, the author argues that Canada funded many corporate social responsibility projects that have helped liberalize mining legislation, in addition to advancing mining education and geological data collection projects that resulted in huge indirect benefits for Canadian mining companies. While nothing is wrong with this approach, Canada needs a future-oriented trade policy agenda: An agenda which recognizes that, among other things, Africa’s current 472 million urban population will increase by 187 million by 2025, reaching 1 billion by 2040 (Lall, Henderson and Venables; 2017). This rapid urbanization has the concomitant effect of helping many working poor climb into the middle class, thereby raising household consumption and business spending. The resulting efficiency and productivity gains, created by urbanization, can help accelerate the continent’s economic development (Lall et al., 2017). This presents a tremendous opportunity for Canada to expand its strategic, commercial and digital links with Africa.

Canada’s digital economy contributes more than $70B annually to GDP; harnessing digital

trade and investments in an interconnected global economy is important for the nation’s long-term success and prosperity (Information and Communications Technology Council, 2016). Canada is home to a vibrant, diverse and successful technology-enabled economy. With strategic investments and collaborations with industry, academic, public-sector and relevant institutional partners, Africa is well-positioned – by virtue of its market size and growing technology needs – to help create a stronger innovation ecosystem, and exports opportunities that can further advance Canada’s digital technology strengths and leadership.

Recommendation 2: In order to partake in future gains from global trade, Canadian policymakers must redesign trade policy to respond to the changing composition of Canada’s trade with the rest of the world, due largely to the emerging global digital economy.

Canada is a trading nation; it has always relied on global trade to bolster its economy. As Ritchie (1997) puts it, trade is perhaps “the most important tool of Canada’s economic development throughout the country’s history” (p. 76). Clearly, the United States remains

28 Captured under the progressive agenda here: https://www.canada.ca/en/global-affairs/news/2017/10/international_tradeministertopromotecanadasprogressivetradeagend.html?wbdisable=true

20

Canada’s most important trading partner, accounting for three-quarters and two-thirds of Canada’s exports and imports, respectively29. Recent policy reversals in the United States show that Canadians and Americans are taking divergent paths on many policies, including trade30.

As discussed in the previous sections, one of the implications of the new global digital

economy is that countries are crafting new strategies to help reposition them to partake in future trade gains. In particular, the digital revolution has shifted the composition of Canada’s trade with the rest of the world. For instance, Canada’s globally traded services have witnessed dramatic growth in recent years with financial services, computer services and management services accounting for three out of the five fastest-growing Canadian exports over the last decade (Hodgson and Goldfarb, 2015). The Conference Board of Canada (2016) posits that not only is diversification required to help Canada reduce its dependence on natural resources, it will also help create an innovation ecosystem that enables Canadian companies to leverage digital and technology platforms to create exportable high-value business services, beyond traditional resources and manufacturing.

The era of rapidly proliferating supply chains in one of the sectors where Canada’s

expertise is globally renowned, manufacturing, is gradually receding (Cross, 2016). This has huge implications for the future of Canada-Africa trade in services. For instance, Manyika et al. (2013) conclude that with the right amount of infrastructure investments, the Internet could transform vital sectors and contribute as much as $300 billion per annum to Africa’s GDP by 2025. In order to partake in future gains from global trade, Canadian policy makers must redesign trade policy to respond to these dynamics.

Recommendation 3: Develop concise and flexible capacity building initiatives to help broaden women’s access to digital finance.

Broadening access to digital finance is a sustainable way to help empower women (Manyika et al., 2016). As discussed under section 2, the size of Africa’s informal economy is about half of the continent’s GDP. More so, a major feature of such underground economy is the significant representation of women, low wages and lack of decent work, compared to the formal segment of the economy (Verick, 2006). The International Labour Organization (2014) maintains that breaking out of the trap of informality requires a policy environment that organizes informal economy workers and promotes equality.

29 See Statistics Canada, CANSIM table 228-0069

30 Since Donald Trump's ascension to power, the U.S. President has embraced a protectionist trade stance, leading to ongoing renegotiation talks on the North American Free Trade Agreement with Canada and Mexico.

21

In line with Canada’s FIAP31, Africa needs capacity-building initiatives specifically targeted at addressing structural inequalities that limit women's full and effective participation in the digital economy. As discussed under section 4 on financial inclusion in Kenya and Nigeria, since women own most MSMEs, in addition to accounting for a relatively higher share of employment compared to men, leveraging the AfT initiative and other tools to help women access digital finance will be highly beneficial.

Recommendation 4: Africa’s small and medium-sized enterprises and entrepreneurs need access to markets and digital infrastructure.

With a market size now in excess of $US 3 trillion, and a growing population projected to be over 3 billion by 2050 – surpassing the entire population of both China and India – Canadian foreign policy and trade objectives should be reoriented towards ensuring that Africa’s MSMEs and entrepreneurs have access to markets and financing through improved physical and digital infrastructure, which both have significant impacts on intra-regional trade facilitation.

Two-thirds of the African population are under the age of 35; Canada needs to rebalance its trade policy away from traditional markets for Canadian goods and services. In particular, a long-term Africa strategy is needed: one that recognizes the potential of this youth bulge by investing in digital and technology solutions that can help leapfrog the constraints and huge costs of physical infrastructure. The GPFI (2017) corroborates this, “There is an increasing recognition of financial inclusion as a global priority, capable of bolstering sustainable, balanced, inclusive economic growth at the macro level and promoting economic and social inclusion at the household and enterprise level (p. 6)

Recommendation 5: Canada should commit to a predictable and sustainable level of support for projects with high development impacts in Africa.

Without a support mechanism in place to help address supply-side constraints, including logistical bottlenecks – to ease the free flow of goods, people and factors across borders – the gains from trade will remain elusive (Prowse, 2006). While total foreign aid in 2016 increased to its highest level in history at $US 142.6 billion32, Canada’s contribution shrank, including its contribution to AfT – an important initiative aimed at fostering increased intra-regional trade.

31 See detailed discussion under literature review in section 2 32 See OECD data tables: http://www.oecd.org/dac/financing-sustainable-development/development-finance-data/ODA-2016-complete-data-tables.pdf

22

The importance of trade for development has been discussed extensively in the preceding sections. Unlike other regions of the world, the numbers show that Africa ranks very poorly on one of the biggest opportunities for growth: intra-regional trade. In line with the tenets of AfT33, in order to foster economic self-sufficiency on the continent, increased intra-regional trade will help expand fragmented markets and provide access to foreign capital – which is often attracted by, among other things, technological innovations, and economies of scale and scope in global value chains.

5.2 Conclusions

Compared to other regions, the relatively lower level of integration in Africa constitutes a major challenge for development. Among other factors, large informal sector, limited market size, trade-related infrastructure, fragmented economic space, and other demand- and supply-side constraints pose major impediments to intra-African trade flows. The growing link between digital services penetration and trade has major implications for Africa-specific trade programming and Canadian foreign policy. As the continent transitions from the margins to the mainstream of global commerce, the global digital revolution is increasingly making it possible for African economies to leapfrog manufacturing and go straight from agriculture to services. Such high-value and digitally-enabled services trade could accelerate intra-regional trade and competitiveness to help bolster sustainable and inclusive growth. The AfT, BIAT and CFTA initiatives remain key in the policy agenda in order to foster increased digital technology adoption by women and African MSMEs. The changing composition of Canada’s trade with the rest of the world underscores the need for policymakers to redesign trade policy to address such structural shifts. Foreign policy in Canada must prioritize strategic, commercial and digital links with Africa; this will help position the country to benefit maximally from the global trading system as digitalization continues to disrupt traditional markets and competitive boundaries.

33 See detailed discussion under literature review in section 2

23

References

1. A Lighter Shade of Grey: Africa’s Informal Economy is Receding Faster than Latin America’s. (2017, May 13) The Economist. https://www.economist.com/news/finance-and-economics/21721947-shadow-economy-still-equivalent-about-40-gdp-africas-informal

2. African Development Bank (2011). Africa in 50 Years’ Time: The Road Towards Growth. Tunis: African Development Bank

3. African Development Bank (2013). Recognizing Africa’s Informal Sector. Tunis: African

Development Bank. https://www.afdb.org/en/blogs/afdb-championing-inclusive-growth-across-africa/post/recognizing-africas-informal-sector-11645/

4. African Development Bank (2014). Tracking Africa’s Progress in Figures. Tunis: African

Development Bank. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Fostering_Development_Through_Trade_Finance_Brochure_-_Full_Version.pdf

5. African Development Bank (2017). Fostering Development through Trade Finance. Trade Finance Newsletter. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Fostering_Development_Through_Trade_Finance_Brochure_-_Full_Version.pdf

6. African Union Commission, African Development Bank and United Nations Economic

Commission for Africa (2016). Africa Regional Integration Index Report 2016. Addis Ababa: UNECA

7. Ancharaz, V., K. Mbekeani and Z. Brixiova (2011). Impediments to Regional Trade

Integration in Africa. Africa Economic Brief, African Development Bank

8. Chaitoo, R. and A. Bankole (2015). Banking Services: A Case Study of Nigeria, in Stephenson, S. and C. Tumuhimbise (eds.), Services Exports for Growth and Development: Case Studies from Africa (pp. 67–151), Addis Ababa: The African Union Commission.

9. Cichello, P. and M. Rogan (2017). Informal Sector Employment and Poverty in South

Africa: Identifying the Contribution of “Informal” Sources of Income on Aggregate Poverty Measures. REDI3x3 Working Paper 34: Cape Town.

10. Claessens, S., A. Demirguc-Kunt and H. Huizinga (2001). How Does Foreign Entry Affect the Domestic Banking Market?. Journal of Banking and Finance, 25, pp. 891–911

24

11. Conference Board of Canada (2016). Canada’s New Trade and Technology Paradigm: Finding the Right Policy Mix. CBOC. http://www.conferenceboard.ca/press/newsrelease/16-07-05/Preparing_Canada_for_a_New_Trade_and_Technology_Era.aspx

12. Cross, P. (2016). The Importance of International Trade to the Canadian Economy: An

Overview. Fraser Research Bulletin: Fraser Institute. https://www.fraserinstitute.org/sites/default/files/the-importance-of-international-trade-to-the-canadan-economy-an-overview-post.pdf

13. Cull, R. and M. Martínez Pería (2010). Foreign Bank Participation in Developing

Countries: What Do We Know About the Drivers And Consequences of this Phenomenon? Policy Research Working Paper Series 5398. The World Bank.

14. Dages, B., L. Goldberg and D. Kinney (2000). Foreign and Domestic Bank Participation in Emerging Markets: Lessons from Mexico and Argentina. Economic Policy Review, 6 (3), pp. 17-36.

15. Dietz, M., H. Vinayak and G. Lee (2016). Bracing for Seven Critical Changes as Fintech Matures. McKinsey & Company. https://www.mckinsey.com/industries/financial-services/our-insights/bracing-for-seven-critical-changes-as-fintech-matures

16. Dornbusch, R., S. Fischer and P. Samuelson (1977). Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods. American Economic Review 67 (5), pp. 823-839

17. Engler, Y. (2016). Canadian 'Aid' Helps Mining Firms Exploit Foreign Markets. HuffPost Canada. http://www.huffingtonpost.ca/yves-engler/foreign-aid-mining-companies_b_12229388.html

18. Estevadeordal, A. (2017). Why Trade Facilitation Matters Now More than Ever.

Brookings Institution Policy Brief. https://www.brookings.edu/wp-content/uploads/2017/04/global_20170405_trade-facilitation.pdf

19. Finger, J. and P. Schuler (2000). Implementation of Uruguay Round Commitments. The

World Economy, 23 (4), 511–25.

20. Global Partnership for Financial Inclusion (2017). 2017 Financial Inclusion Action Plan. GPFI. https://www.gpfi.org/sites/default/files/documents/2017%20G20%20Financial%20Inclusion%20Action%20Plan%20final.pdf

25

21. Government of Canada (2017). Departmental Plan 2017-18. Global Affairs Canada: http://international.gc.ca/gac-amc/assets/pdfs/publications/plans/dp-pm/dp-pm_1718_en.pdf

22. Government of Canada (2014). Financial Services Sector: Canada’s Competitive Advantages. Invest in Canada. http://www.international.gc.ca/investors-investisseurs/assets/pdfs/download/Financial_Services.pdf

23. Hanna, N. and P. Knight (2012). National Strategies to Harness Information Technology: Seeking Transformation in Singapore, Finland, the Philippines, and South Africa. New York: Springer-Verlag

24. Hodgson, G. and D. Goldfarb (2015). Services Exports: Canada’s Quiet Growth Engine. Conference Board of Canada. http://www.conferenceboard.ca/press/speech_oped/15-05-08/Services_exports_Canada_s_quiet_growth_engine.aspx

25. Information and Communications Technology Council (2016). Digital Talent: Road to 2020 and Beyond. ICTC. https://www.ictc-ctic.ca/wp-content/uploads/2016/03/ICTC_DigitalTalent2020_ENGLISH_FINAL_March2016.pdf

26. International Finance Corporation (2017). How Fintech is Reaching the Poor in Africa

and Asia: A Start-Up Perspective. Washington D.C.: International Finance Corporation. https://www.ifc.org/wps/wcm/connect/f745fd31-a9aa-4736-b0ba-4ac2956f96dc/EmCompass+Note+34+DFS+and+FinTech+Mar+28+FINAL.pdf?MOD=AJPERES

27. International Labour Organization (2014). Empowering African Women to Break Out of Informality. Press Release. Addis Ababa: http://www.ilo.org/addisababa/media-centre/pr/WCMS_307466/lang--en/index.htm

28. International Monetary Fund (2016). Trade Integration and Global Value Chains in Sub-

Saharan Africa: In Pursuit of the Missing Link. Washington D.C.: IMF

29. Kortum, S. (1997). Research, Patenting, and Technological Change. Econometrica 65

30. Lall, S., J. Henderson and A. Venables (2017). Africa's Cities: Opening Doors to the World. Washington, DC: World Bank. https://openknowledge.worldbank.org/handle/10986/25896

31. Lesser, C. and E. Moise-Leeman (2009). Informal Cross-Border Trade and Trade

Facilitation Reform in Sub-Saharan Africa. OECD Trade Policy Working Paper 86, Paris: Organization for Economic Cooperation and Development.

26

32. Manyika, J., et al. (2013). Lions Go Digital: The Internet’s Transformative Potential in Africa. McKinsey Global Institute. www.mckinsey.com/industries/high-tech/our-insights/lions-go-digital-the-internets-transformative-potential-in-africa

33. Manyika, J., et al. (2016). Digital Finance for All: Powering Inclusive Growth in Emerging

Economies. McKinsey Global Institute. https://www.mckinsey.com/global-themes/employment-and-growth/how-digital-finance-could-boost-growth-in-emerging-economies

34. Mullineux, A. and V. Murinde (2014). Financial Sector Policies for Enterprise Development in Africa. Review of Development Finance, 4(2), pp. 66-72

35. Organisation for Economic Co-operation and Development (2000). Cross-Border Trade in Financial Services: Economics and Regulation. Financial Market Trends, No. 75

36. Papadavid, P. (2016). China‘s Balancing Act: Why the Internationalisation of the Renminbi Matters for the Global Economy. Overseas Development Institute Report. https://www.odi.org/publications/10268-china-s-balancing-act

37. Porto, S., P. Canuto and C. Morini (2015). The Impacts of Trade Facilitation Measures on International Trade Flows. World Bank Policy Research, Working Paper No. 7367.

38. Prowse, S. (2006). Aid for Trade: Increasing Support for Trade Adjustment and

Integration – A Proposal. In S. Evenett and B. Hoekman (eds.), Economic Development and Multilateral Trade Cooperation, Palgrave/McMilllan and World Bank

39. Ritchie, G. (1997). Wrestling with the Elephant: The Inside Story of the Canada-U.S. Trade Wars. Macfarlane, Walter and Ross

40. Sommer, L., H. Suominen and D. Luke (2017). Aid for Trade in Africa: What Are the Strategic Priorities? Bridges Africa, 6(5). https://www.ictsd.org/bridges-news/bridges-africa/news/aid-for-trade-in-africa-what-are-the-strategic-priorities

41. Stephenson, S. and C. Tumuhimbise (2015). Services Exports for Growth and Development: Case Studies from Africa. Addis Ababa: The African Union Commission.

42. The Service Elevator: Can Poor Countries Leapfrog Manufacturing and Grow Rich on Services? (2011, May 19) The Economist. http://www.economist.com/node/18712351

43. United Nations Conference on Trade and Development (2017). Economic Development

in Africa Report 2017: Tourism for Transformative and Inclusive Growth. Geneva and New York: United Nations

27

44. United Nations Economic Commission for Africa (2010). Assessing Regional Integration in Africa IV. Addis Ababa: UNECA.

45. United Nations Economic Commission for Africa (2012a). Boosting Intra-African Trade.

Addis Ababa: UNECA/African Union Commission. https://www.uneca.org/sites/default/files/uploaded-documents/ATPC/issues_affecting_intra-african_trade_proposed_action_plan_for_biat_and_framework_for_the_fast_tracking_en.pdf

46. United Nations Economic Commission for Africa (2012b). Unleashing Africa’s Potential

as a Pole of Global Growth. Addis Ababa: UNECA http://www.un.org/en/africa/osaa/pdf/pubs/2012era-uneca.pdf

47. United Nations Economic Commission for Africa (2013). Trade Facilitation from an

African Perspective. Addis Ababa: UNECA.

48. United Nations Industrial Development Organization (2016). Annual Report 2016. Vienna: UNIDO

49. U.S. Department of Commerce (2016). 2016 Top Markets Report: Financial Technology.

Washington D.C.: U.S. Department of Commerce, International Trade Administration

50. Verick, S. (2006). The Impact of Globalization on the Informal Sector in Africa. Economic and Social Policy Division, UNECA and Institute for the Study of Labour (IZA). http://conference.iza.org/conference_files/worldb2006/verick_s872.pdf

51. Voorhies, R., J. Lamb and M. Oxman (2013). Fighting Poverty, Profitably: Transforming the Economics of Payments to Build Sustainable, Inclusive Financial Systems. Seattle: Bill & Melinda Gates Foundation. https://docs.gatesfoundation.org/documents/fighting%20poverty%20profitably%20full%20report.pdf

52. World Trade Organization (2017). Promoting Trade, Inclusiveness and Connectivity for Sustainable Development. Aid for Trade Global Review 2017. https://www.wto.org/english/tratop_e/devel_e/a4t_e/gr17_e/gr17programme_e.htm

53. Zaki, C. (2014). An Empirical Assessment of the Trade Facilitation Initiative: Econometric Evidence and Global Economic Effects. World Trade Review 13(1): 103-130.

54. Zedillo, E., P. Messerlin and J. Nielson (2005). Trade for Development. UN Millennium

Project Task Force on Trade. Earthscan: London.