Trade in Services and Income Inequality in Africa: The Role of Information and Communication Technologies

Abstract With the advent of the technological revolution, trade in services is of paramount importance in major international trade issues. This paper analyses the effects of trade in services in general and ICTs in particular on income inequality in 46 African countries over a decade 2009–2018. It focuses in particular on the channels through which trade in services affects income inequality. The results from the estimates show a robust and significant inverse relationship between trade in services and income inequality in Africa. Greater participation in international trade in services reduces inequalities in intra-national income distribution in Africa. The results suggest that the interaction of trade in services and internet penetration has a positive impact on income inequality in Africa. JEL Classification: F10, D31, C23