Services as a Driver of Economic Growth and Job Creation in South Africa: Can the AfCFTA Assist?

The document examines South Africa's service sector, which contributes approximately 61% to national GDP and employs over 5.5 million workers. While the sector is large, the authors argue that growth must shift toward exports, particularly within Africa, as the domestic market is overdeveloped. The brief concludes that the AfCFTA is unlikely to provide a short-term boost due to a lack of specific service sector commitments and persistent regulatory hurdles, such as visa restrictions and inadequate ICT infrastructure. It recommends establishing a unified coalition of service providers and updating digital infrastructure to enhance South Africa's role as a regional gateway.

• South Africa's service sector is relatively large compared to middle-income peers, contributing approximately 61% to national GDP and employing more than 5.5 million workers, which represents roughly 71.5% of total employment.
• Despite its size, South Africa's services trade performance has been poor since 2010, with exports decreasing from $16 billion in 2010 to $15.9 billion in 2018, while imports fell from $19.5 billion to $16.4 billion over the same period.
• South Africa's services exports are heavily concentrated in traditional markets outside of Africa; in 2019, exports to Europe and Central Asia, East Asia and the Pacific, and North America accounted for over 80% of trade, while sub-Saharan neighbours accounted for only 7%.
• The AfCFTA is not expected to be a significant short-term catalyst for services growth because South Africa has not yet made service sector commitments under the agreement and is likely to maintain the status quo of its GATS rules.
• Significant barriers hinder South Africa's ability to act as a regional gateway, including regulatory constraints on the movement of people, delays in issuing business and scarce skills visas, and inadequate ICT and power infrastructure.
• There is a critical lack of institutional representation for the service sector in South Africa, as the country lacks a unified coalition or business association to engage the state on policy support for services exports.
• Tourism is a vital employment driver, contributing 1.5 million direct and indirect jobs (4.5% of total employment) in 2018, but the sector lost over 300,000 jobs due to COVID-19 lockdown measures.

APA

JULES, K., GOVENDER, D., & BRIDGMAN, D. (2021). Services as a Driver of Economic Growth and Job Creation in South Africa: Can the AfCFTA Assist? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2021/07/Policy-Insights-115-jules-govender-bridgman.pdf

Chicago

JULES, KANE, DANAE GOVENDER, and DAVID BRIDGMAN. Services as a Driver of Economic Growth and Job Creation in South Africa: Can the AfCFTA Assist? South African Institute of International Affairs, 2021. https://saiia.org.za/wp-content/uploads/2021/07/Policy-Insights-115-jules-govender-bridgman.pdf.

Wikipedia

{{cite report |last1=JULES |first1=KANE |last2=GOVENDER |first2=DANAE |last3=BRIDGMAN |first3=DAVID |title=Services as a Driver of Economic Growth and Job Creation in South Africa: Can the AfCFTA Assist? |publisher=South African Institute of International Affairs |date=June 2021 |url=https://saiia.org.za/wp-content/uploads/2021/07/Policy-Insights-115-jules-govender-bridgman.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{jules2021services, author = {JULES, KANE and GOVENDER, DANAE and BRIDGMAN, DAVID}, title = {{Services as a Driver of Economic Growth and Job Creation in South Africa: Can the AfCFTA Assist?}}, institution = {South African Institute of International Affairs}, year = {2021}, month = jun, url = {https://saiia.org.za/wp-content/uploads/2021/07/Policy-Insights-115-jules-govender-bridgman.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }