IMF seeks reduction of inter-African trade tariffs by 90%

To encourage the flow of goods between African nations, the International Monetary Fund (IMF) has asked for a 90% decrease in tariffs on intra-African trade as well as a 50% drop in non-tariff measures.

The IMF published a paper titled “Trade Integration in Africa: Unleashing the Continent’s Potential in a Changing World” that included this information.

The paper claims that, if paired with changes to the trading environment, the African Continental Free trading Area’s objectives to reduce tariffs and non-tariff measures across the continent could raise real per capita GDP in the median country by 1.25 percent and increase trade by 15%.

Also Read: FAAC REVEALS HOW FOREX MANDATE BOOSTED FG’S COFFERS BY N321BN

The average import duty on commerce inside Africa is still higher than similar tariffs in other regions.

For example, while trade within the Southern African Customs Union, Central African Economic and Monetary Community, and West African Economic and Monetary Union are tariff-free, within-bloc tariff rates average 9 per cent in the Arab Maghreb Union and 12 per cent in the Economic Community of Central African States.

The report noted that the reductions, if implemented, would raise income levels and support integration into regional and global value chains, opening up opportunities for diversification of sectors and expansion of manufacturing industries, boosting services exports by about 50 per cent.

The IMF report read, “Regarding merchandise trade, a lowering of tariffs and non-tariff measures between African countries as planned under the AfCFTA would lead to notable increases in trade and incomes.

“These gains would be amplified considerably if complemented with improvements in the trade environment, for example, transport and telecommunications infrastructure, access to finance, and domestic security, to bring them to levels comparable to those in other regional free trade agreements.

“More concretely, a cut in tariffs on intra-African trade by 90 per cent and non-tariff measures by 50 per cent could increase the median merchandise trade flow between African countries by 15 per cent and real per capita GDP in the median country by 1.25 per cent.