Major business opportunities for Swedish trade in services in Africa

Published 21 October 2015 in:

Panellists Dr Joseph K Sang, Kenya’s Ambassador to Sweden, Anna Stellinger, Director-General of the National Board of Trade, Junior Davis, UNCTAD, co-author of the report, and Marie Öberg Lindevall, CEO Helseplan.
Photo: Gabriel Wernstedt/Government offices of Sweden

Trade in services in Africa currently accounts for 32 per cent of the labour market and is expected to grow considerably in the years to come, according to a new report from the United Nations Conference on Trade and Development (UNCTAD), which was discussed on 2 October at a seminar organised by the MFA and the National Board of Trade. An important objective of a Swedish export strategy is to bring more Swedish service and telecommunications enterprises to these emerging markets.

The service trade in Africa is making rapid headway. Major opportunities are emerging for Swedish enterprises in ICT, environmental technology, telecommunications and financial services as the informal economy increasingly transitions to a formal one. Joakim Reiter, Assistant Secretary-General for the United Nations Conference on Trade and Development (UNCTAD), presented the conclusions of his report Unlocking the Potential of Africa’s Services Trade for Growth and Development.

“Trade in services is spurring growth in Africa as it becomes more advanced and specialised. Now, as the Global Goals are to be implemented, there is great potential for Swedish solutions in water purification, environmental technology and sanitation,” says Joakim Reiter, who points to Rwanda and Kenya as examples of countries in the process of rapid development.

Peter Stein, consultant to the OECD, who has written several reports on economic development in Africa, also sees major opportunities for investment in Africa in the years ahead and, in addition to Rwanda and Kenya, highlights a number of potential markets:

“Morocco is in the process of developing into one of the strongest growing service trade countries in Africa, in particular with regard to small and medium-sized enterprises in the finance sector. Senegal – which was one of the first African countries to invest in the ICT sector – is also creating opportunities for Swedish enterprises to import advanced technological services from Africa.”

Another important objective of the new Swedish export strategy is to make use of existing opportunities as an increasing number of countries in Africa move from basic to more advanced trade in services. Swedish exports are strong, to be sure. In 2014, the total export of goods and services accounted for 45 per cent of Sweden’s GDP. However, even if exports have a strong position, Sweden has lost export shares in relation to the rest of the world.

The transition from development aid to trade as the African market grows is also an important objective of the export strategy. This was also highlighted at the seminar by Anna Stellinger, Director-General at the National Board of Trade.

“We need to have a fundamental discussion on why trade is good and why it is an engine for economic development,” says Anna Stellinger.

Swedish enterprises currently operate in several African countries. Ericsson took part in the seminar and described the increasing growth in trade of services in Africa.

“The African market represents only 4 per cent of Ericsson’s turnover, but its growth is closer to 30 per cent,” says Ulf Pehrsson, Ericsson.