Side Event to the Twelfth Session of the Africa Regional Forum on Sustainable Development
Background
The traditional view that industrialisation is the most viable path to structural transformation is fading fast, especially for least developed countries (LDCs), 32 of which are in Africa. Services now account for approximately two-thirds of global output; in LDCs, they comprise 48.9% of GDP, whereas the manufacturing sector’s contribution was only 10.9% in 2023. In many LDCs, this shift is characterised by the movement of labour from agriculture into services, while global trends are being fuelled by digital transformation, technological change, and high productivity. The Least Developed Countries Report 2025, titled “Are services the new path to structural transformation?”, examines whether—and under what conditions—services can drive structural transformation in LDCs. This side event will explore the specific benefits for African LDCs and outline how they can strategically harness services to drive long-term development.
Objectives
Given the strategic importance of trade to the development of low-income countries, this side event will discuss how African countries—particularly LDCs—can leverage this new pathway to achieve SDG 9 (Industry, Innovation, and Infrastructure) and SDG 17 (Partnerships for the Goals). Focused on three key pillars, the session aims to explore strategies and policy options in the following areas:
- Investment and transition: Scaling up investment in the services sector, addressing informality, and transitioning from low-productivity sectors toward knowledge-intensive services.
- Integration: Strengthening the services-manufacturing nexus through better-integrated services value chains.
- Partnerships: Leveraging the African Continental Free Trade Area (AfCFTA) and global trade partnerships to bolster services trade.
This virtual side event will convene policymakers, researchers, and key stakeholders to discuss transitioning Africa's services sector from low-productivity activities toward knowledge- and technology-intensive services, while strengthening the continent's overall services trade potential.
