Impact of Digital Trade on the Employment Situation in Africa

This study investigates the impact of digital trade on employment in Africa, with the objective of deepening the understanding of the region’s economiclandscape and the potential of digital trade to generate employment. Utilizing a dataset covering 30 African countries from 2009 to 2020, the research employs an instrumental variable two-stage least squares (IV-2SLS) estimation method to assess the effects of digital trade. The findings reveal that, although digital trade does not uniformly enhance overall employment, it exerts a significant and positive influence on employment within the industrial and services sectors. Moreover, the study highlights the role of general government expenditure as a moderating factor in this relationship. This research contributes new empirical evidence by using various trade activities as proxies for digital trade, addressing a notable gap in the existing literature. The conclusions provide critical insights for African policymakers in developing strategies to leverage digitalization for economic growth.