The Quality and Price of Africa's Imports of Digital Goods

ABSTRACT Imported digital goods are critical for productivity growth in low‐income countries. Using detailed data on international trade flows and tariffs, this paper finds that African nations tend to import relatively low‐quality, low‐price digital goods. It also finds that digital goods in Africa are subject to relatively higher tariffs, along with other factors that contribute to their higher cost in the domestic market compared to other regions, especially in some low‐income countries. The findings show that the African Continental Free Trade Area will do little to reduce this tariff burden, as most digital goods are sourced from higher‐income non‐members. In contrast, unilateral tariff liberalisation towards all countries would significantly increase the imports of digital goods in Africa and lead to sizable increases in real GDP in several low‐income countries.