Services on the spot
At the close of 2007, the EU completed a comprehensive Economic Partnership Agreement (EPA) with the Cariforum countries. The EPA with the Cariforum is comprehensive in the sense that it extends to trade in goods, services and all the new generation issues including government procurement, competition law, and others. With the rest of the regions negotiating these Agreements, Europe secured interim Agreements on trade in goods only. Ngo South Centre realized an analytical note providing an overview of key provisions related to trade in services in the Cariforum EPA text and comments on the possible implications for other ACP countries in Africa and the Pacific, which may soon initiate negotiations for the reciprocal liberalisation of trade in services with Europe.
The importance of the services sector for ACP countries transcends mere economic and commercial significance leaning more towards social and welfare enhancing functions. Socially, services provide key functions essential for human existence such as health, sanitation and water thereby enhancing the quality of human life and allowing for a productive pool of human resource that can then engage in commercially meaningful activities, contributing towards the attainment of national development objectives. Education services provide the skills necessary for building government and private work.
Most ACP countries are agro-based economies. The bulk of activity relates to tilling the land mainly for subsistence, with surplus being sold to local markets. In such cases, trade in services becomes important with transportation and distribution services providing connectability to markets where farmers can sell their produce and get linked to industrial production processes (in which energy services play a critical role).
Services also provide employment especially to women in tourism, which is important as a diversification tool to stand shocks related to the continual fluctuation in agricultural commodity markets.
The intangibility of most services, their non stockability and the highly informal nature of the sector in ACP countries makes it difficult to capture with precision the statistical importance of services. However, figures available show that in the CEMAC region, the sector experiences an annual growth rate of 6.5%. The share in total regional exports amounts to 8% with imports averaging at 45%. In the Central African Republic (CAR), IMF data indicates the contribution of the services sector to GDP is 28.4% in 1996/9 dropping to 0.9% in 2004/5. Tourism contributed receipts averaging US$4.7million per annum between 1988 and 2004. In Cameroon, the services sector contributes about 40% to GDP. In the ECOWAS region, the services sector is also economically significant. In Nigeria, for instance, services represent about 33.3% of GDP with key sectors being finance, insurance and energy. Senegal has at least two-thirds of GDP contributed by services; Cote d’Ivoire has a diversified financial sector whereas Cape Verde is strong in transportation, travel and other commercial services.
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