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Developing Professional Services in Africa through Regional Integration

Nora Dihel, Ana M. Fernandes and Aaditya Mattoo, The World Bank

Professional services play an important role in the functioning of modern economies and are among the fastest growing services sectors in many developed and developing economies. Professional services contribute directly and indirectly to economic growth, including by lowering transaction costs, and by creating spillovers of knowledge for other industries. Evidence on the state and role of professional services in Africa is scarce and unsystematic. Using data from a World Bank survey of over 1500 users and providers of professional services and of regulations affecting professional services the paper documents the key characteristics of professional services markets in 10 Sub-Saharan economies. More specifically, it analyses the role of accountancy, engineering and legal services in these African economies, and the interplay between supply and demand in the three sectors, with particular emphasis on the special characteristics and needs of small enterprises. It also analyses the possible downstream benefits of professional services, including on the labor productivity of users. Finally, the paper identifies common themes concerning the reform of professional regulation in these ten countries to show how regional integration and regulatory cooperation can be used to improve the performance of professional markets in Africa.

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