Reduction in tariffs is key to stronger intra-Africa trade.

678
1899
Damali Ssali is a Trade Development Expert at TradeMark East Africa.

Damali Ssali.

There are several factors that influence the value and volume of trade. However, tariffs on tradeable goods and services are one of the most significant factors.

International trade grew dramatically in the second half of the 20th century. As an example, total global trade in 2000 was 22 times greater than it had been 1950.

This increase in multilateral international trade occurred when trade barriers, especially tariffs, were significantly reduced or in some cases eliminated across large trade blocks in Asia, America and Europe.

Tariffs are taxes levied on imports and exports between states with the aim of generating government revenues and protecting domestic industries.

Sometimes, depending on the tax policy of the country, a tariff could be set as high as 60%. This is usually to protect a young industry that is considered as very important to that state.

Other times tariffs are imposed by states, against products and services of another state, to settle scores. The current trade war currently going on between the United States and China is one such tariff war waged between states.

In 2017, the United Nations Conference on Trade and Development reported that tariffs, on tradeable goods and services, between the developed states averaged at 1.2%.

This is low compared to the average tariffs, on tradeable goods and services, between African countries, which stand at 8%.  Moreover, tariffs remain relatively high in important sectors, including agriculture, apparel, textiles and leather products.

Unfortunately, these high tariffs make it easier for African countries to trade with Europe and the United States than to trade with each other.

As such, intra-Africa trade is just 15%. This means that of all total trade on the African continent, only 15% is between African countries.

On the other hand, over 60% of total African trade is with countries that are oceans away from the continent. By way of comparison, intra-trade levels in Asia stand at 58% and in Europe at 67%.

KENYA, Mombasa: Photograph taken by the Kenyan Ministry of East African Affairs, Commerce and Tourism (MEAACT) 31 July shows a general view of containers inside Mombasa Port on Kenya’s Indian Ocean coast. MANDATORY CREDIT: MEAACT PHOTO / STUART PRICE.

A recent United Nations Economic Commission for Africa report indicated that if tariffs are significantly reduced, or eliminated, intra-Africa trade would increase to more than 50% of total trade on the continent.

That said, there is a legitimate concern that if tariffs are significantly reduced or eliminated there will be a reduction in government revenues. This in turn would curtail the governments ability to provide public goods and services to the general population.

However, the reduction in government revenues, from tariffs, would be made up with an increase in income tax and value added tax. This is because a reduction in tariffs would lead to an increase in the value and volume of trade, profits, investment, productivity, employment and disposable income.

The positive knock on effects of revenue from other non-tariff revenue sources by far outweigh the loss in revenue from tariffs.

With the coming into effect of the African Continental Free Trade Area (AfCFTA), which creates a single domestic market for goods and services of 1.2billion people, this is the opportune time to discuss the elimination of tariffs on continental trade.

The AfCFTA seeks to reduce tariffs between African countries by more 90%. This will help to reverse the trend where more than 75% of all exports from the continent are extractives, namely oil and minerals, in raw form. The goal is to secure sustainable economic growth by shifting away from the volatility related to exporting raw materials, to the stability of exporting industrialised goods.

The significance of the AfCFTA cannot be overstated. It will be the world’s largest free trade area since the establishment of the World Trade Organization and it is estimated that if successfully implemented, Africa will have a combined consumer and business spending of USD6.7trillion by 2030.

The AfCFTA will have a big impact on manufacturing, tourism, intra-African cooperation, and economic transformation. The International Monetary Fund reports that, under the AfCFTA, Africa’s expanded, and more efficient goods and labor markets will increase the continent’s overall ranking on the global competitiveness index.

However, the immense potential of the AfCFTA will only be realized if tariffs are eliminated or significantly reduced and this must be prioritised at the very start of the implementation phase in 2020. The schedules of tariff concessions of members states must be submitted to the African Union and the negotiations on the rules of origin, for goods, completed.

The other main area of tariff elimination is in services, particularly, on investment, competition and intellectual property rights.

This is because services make a significant contribution to the manufacturing value chains and play a key role in logistics. Also, services make a larger contribution to poverty reduction than agriculture or manufacturing.

On the African continent, over 55% of the Gross Domestic Product is generated by services. However, African service providers face barriers to export services. As a result, African services exports contribute just 2% of global trade in services.

Therefore, there is a great opportunity for the AfCFTA to expand competitiveness in African trade in services by liberalizing the service sector through the elimination of tariffs on services

Also, in view of the imminent implementation phase, member states must build the capacity of their trade missions and ministries to negotiate trade tariffs. This capacity building can start with the individual countries, to the regional economic blocks, such as the East African Community, and then consolidated at the AfCFTA secretariat.

The focus on tariff elimination will, not only, promote African development and catalyse the growth in the manufacturing and services sectors, but also, provide employment opportunities for the continent’s burgeoning youthful population.

Damali Ssali is a Trade Development Expert at TradeMark East Africa.

damali.ssali@trademarkea.com

 

678 COMMENTS

  1. Hi, i think that i saw you visited my weblog thus i came to “return the favor”.I’m trying to find things to enhance my website!I suppose its ok to use a few of your ideas!!

  2. My programmer is trying to convince me to move to .net from PHP. I have always disliked the idea because of the costs. But he’s tryiong none the less. I’ve been using WordPress on several websites for about a year and am worried about switching to another platform. I have heard good things about blogengine.net. Is there a way I can transfer all my wordpress posts into it? Any help would be really appreciated!

  3. Taxi moto line
    128 Rue la Boétie
    75008 Paris
    +33 6 51 612 712  

    Taxi moto paris

    Aw, this was a really good post. Taking a few minutes and
    actual effort to make a very good article… but
    what can I say… I hesitate a lot and don’t seem to get anything
    done.

  4. Great post. I was checking constantly this weblog and I’m impressed! Extremely useful info specifically the last phase I deal with such information a lot. I used to be looking for this certain info for a very long time. Thanks and good luck.

  5. I simply want to tell you that I’m all new to blogging and site-building and definitely liked this blog. Likely I’m going to bookmark your blog . You amazingly come with impressive well written articles. Kudos for revealing your webpage.

  6. Thanks for your concepts. One thing we’ve noticed is banks along with financial institutions are aware of the spending practices of consumers while also understand that most of the people max out there their real credit cards around the getaways. They properly take advantage of this specific fact and commence flooding your current inbox along with snail-mail box using hundreds of no-interest APR card offers just after the holiday season comes to an end. Knowing that should you be like 98% of American community, you’ll rush at the possiblity to consolidate card debt and shift balances for 0 apr interest rates credit cards. jiiihkm https://headachemedi.com – over counter medicine for Headache pain

  7. Thanks for your ideas. One thing I have noticed is that banks and financial institutions know the spending habits of consumers and understand that most people max out their credit cards around the holidays. They wisely take advantage of this fact and start flooding your inbox and snail-mail box with hundreds of 0 APR credit card offers soon after the holiday season ends. Knowing that if you are like 98% of the American public, you’ll jump at the chance to consolidate credit card debt and transfer balances to 0 APR credit cards. bbbbbbi https://headachemedi.com – buy Headache pain medicine

  8. Thanks for your strategies. One thing really noticed is that often banks plus financial institutions know the dimensions and spending patterns of consumers plus understand that plenty of people max outside their cards around the trips. They correctly take advantage of this real fact and then start flooding a person’s inbox plus snail-mail box by using hundreds of no interest APR credit cards offers shortly when the holiday season closes. Knowing that when you are like 98% in the American general public, you’ll get at the one opportunity to consolidate financial debt and switch balances towards 0 rate credit cards. poonmpp https://thyroidmedi.com – list of common thyroid medications

  9. Thanks for your strategies. One thing really noticed is that often banks plus financial institutions know the dimensions and spending patterns of consumers plus understand that plenty of people max outside their cards around the trips. They correctly take advantage of this real fact and then start flooding a person’s inbox plus snail-mail box by using hundreds of no interest APR credit cards offers shortly when the holiday season closes. Knowing that when you are like 98% in the American general public, you’ll get at the one opportunity to consolidate financial debt and switch balances towards 0 rate credit cards. nmmlkno https://thyroidmedi.com – thyroid threatment drugs

  10. Thanks for your tips. One thing we have noticed is always that banks and also financial institutions have in mind the spending behavior of consumers and also understand that a lot of people max out there their own credit cards around the holiday seasons. They prudently take advantage of this kind of fact and begin flooding the inbox and also snail-mail box together with hundreds of Zero APR card offers immediately after the holiday season comes to an end. Knowing that in case you are like 98% of all American open public, you’ll hop at the possiblity to consolidate personal credit card debt and move balances for 0 interest rates credit cards. hgggfik https://stomachmedi.com – stomach pain drugs

  11. Thanks for your thoughts. One thing I’ve got noticed is the fact banks in addition to financial institutions understand the spending behaviors of consumers and as well understand that the majority of people max outside their cards around the breaks. They smartly take advantage of that fact and then start flooding ones inbox in addition to snail-mail box having hundreds of no interest APR credit cards offers shortly after the holiday season closes. Knowing that for anyone who is like 98% in the American general public, you’ll soar at the one opportunity to consolidate consumer credit card debt and switch balances towards 0 interest rate credit cards. nmmlkno https://stomachmedi.com – best over the counter stomach medicines

  12. Thanks for your suggestions. One thing I’ve noticed is the fact that banks as well as financial institutions really know the spending routines of consumers as well as understand that many people max away their own credit cards around the vacations. They sensibly take advantage of this particular fact and begin flooding your own inbox as well as snail-mail box along with hundreds of Zero APR credit card offers right after the holiday season finishes. Knowing that if you’re like 98% of all American open public, you’ll leap at the opportunity to consolidate credit debt and move balances to 0 annual percentage rates credit cards. feeeegj https://pancreasmedi.com – stomach drugs for sale

  13. Thanks for your concepts. One thing we’ve noticed is banks along with financial institutions are aware of the spending practices of consumers while also understand that most of the people max out there their real credit cards around the getaways. They properly take advantage of this specific fact and commence flooding your current inbox along with snail-mail box using hundreds of no-interest APR card offers just after the holiday season comes to an end. Knowing that should you be like 98% of American community, you’ll rush at the possiblity to consolidate card debt and shift balances for 0 apr interest rates credit cards. jiiihkm https://pancreasmedi.com – list of stomach medications

  14. I am really enjoying the theme/design of your site. Do you ever run into any browser compatibility
    problems? A couple of my blog audience have complained
    about my blog not working correctly in Explorer but looks great in Firefox.

    Do you have any recommendations to help fix this problem?

  15. Does Clomid turn down estrogen levels? As an anti-estrogen seeking on recycle steroid use, clomid days 5 9 success is properly striking at staving away gynecomastia. It will not bring down estrogen levels or restrain the aromatization process, but in various cases, binding to the receptors is enough haven also in behalf of many men.

  16. Is 150 mg viagra without a doctor prescription safe. The zenith quantity of sildenafil recommended on the industrialist is 100 mg. A over was designed to prospectively critique a coterie of patients with long-lived ED, unresponsive to sildenafil 100 mg, who were treated in a home setting with doses of viagra without a doctor prescription buy viagra with no prescription in excess of the recommended maximum measure (150 mg and 200 mg).

  17. I’m pretty pleased to discover this website. I need to to thank you for
    your time for this particularly fantastic
    read!! I definitely really liked every bit of it
    and i also have you book-marked to check out new things on your website.

  18. I’ve been surfing online greater than three hours nowadays, but I never discovered any interesting article like yours. It is lovely worth enough for me. In my view, if all web owners and bloggers made just right content as you probably did, the internet shall be much more helpful than ever before.

  19. I have read several just right stuff here. Certainly price bookmarking for revisiting. I surprise how much effort you set to create such a excellent informative web site.

  20. Have you ever considered publishing an e-book or guest authoring on other sites? I have a blog centered on the same information you discuss and would love to have you share some stories/information. I know my visitors would value your work. If you are even remotely interested, feel free to send me an e-mail.

  21. Great blog right here! Also your site loads up fast! What host are you the usage of? Can I get your affiliate hyperlink to your host? I want my site loaded up as fast as yours lol

  22. Thank you for the sensible critique. Me & my neighbor were just preparing to do a little research about this. We got a grab a book from our local library but I think I learned more from this post. I’m very glad to see such excellent info being shared freely out there.

  23. I¦ve been exploring for a little for any high quality articles or blog posts on this sort of house . Exploring in Yahoo I finally stumbled upon this website. Reading this information So i¦m happy to exhibit that I have an incredibly just right uncanny feeling I found out exactly what I needed. I so much without a doubt will make sure to don¦t disregard this web site and provides it a look on a constant basis.

  24. I carry on listening to the news speak about getting free online grant applications so I have been looking around for the best site to get one. Could you advise me please, where could i acquire some?

  25. Does your website have a contact page? I’m having trouble locating it but, I’d like to shoot you an email. I’ve got some suggestions for your blog you might be interested in hearing. Either way, great website and I look forward to seeing it develop over time.

  26. Thanks , I have recently been searching for info about this subject for ages and yours is the best I have discovered till now. But, what about the bottom line? Are you sure about the source?

  27. Sweet blog! I found it while browsing on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Many thanks

  28. I love what you guys are up too. This sort of clever work and exposure! Keep up the superb works guys I’ve included you guys to my personal blogroll.

  29. Can I purloin sildenafil everyday. viagra online can be infatuated every age, up to the recommended peak dosage of 100mg. It helps men with erectile dysfunction dig more adventure and margin – because it is a highly-effective and minimally-disruptive viagra prices generic viagra without prescription medication that can climb to livelihood in less than an hour.

  30. Its like you read my mind! You appear to know so much about this, like you wrote the book in it or something. I think that you can do with some pics to drive the message home a bit, but other than that, this is excellent blog. A fantastic read. I will definitely be back.

  31. I am often to blogging and i really appreciate your content. The article has really peaks my interest. I am going to bookmark your site and keep checking for new information.

  32. I truly love your site.. Pleasant colors & theme. Did you build this
    website yourself? Please reply back as I’m wanting to create my own personal site and
    want to learn where you got this from or just what
    the theme is named. Cheers! 0mniartist asmr

  33. Great V I should definitely pronounce, impressed with your website. I had no trouble navigating through all the tabs as well as related information ended up being truly easy to do to access. I recently found what I hoped for before you know it at all. Reasonably unusual. Is likely to appreciate it for those who add forums or something, web site theme . a tones way for your customer to communicate. Excellent task..

  34. I love your blog.. very nice colors & theme. Did you create this website yourself or did you hire
    someone to do it for you? Plz respond as I’m looking
    to design my own blog and would like to find out where u got this from.

    thanks a lot asmr 0mniartist

  35. Hi! Someone in my Facebook group shared this website with us so I came to give it a look. I’m definitely loving the information. I’m bookmarking and will be tweeting this to my followers! Wonderful blog and brilliant style and design.

  36. I don’t even know how I ended up here, however I thought this put up
    was once great. I don’t recognize who you might be but definitely you’re going to a famous blogger should you are not already.
    Cheers! asmr 0mniartist

  37. You can certainly see your enthusiasm within the work you write.
    The arena hopes for even more passionate writers such as you who are not afraid to mention how they believe.
    All the time follow your heart. 0mniartist asmr

  38. Thanks so much for providing individuals with an extraordinarily pleasant possiblity to read critical reviews from this blog. It is often so sweet and full of a great time for me and my office mates to search your site no less than three times weekly to read through the new stuff you have got. And lastly, I’m just at all times motivated with all the excellent tactics you give. Selected 3 points in this posting are absolutely the most effective we’ve ever had.

  39. Thank you for some other informative website. The place else could I am getting that kind of information written in such an ideal means? I’ve a undertaking that I’m simply now working on, and I have been on the look out for such information.

  40. I have been browsing on-line more than 3 hours as of late, but I by no means found any fascinating article like yours. It is beautiful value sufficient for me. Personally, if all web owners and bloggers made excellent content as you probably did, the net will probably be much more helpful than ever before.

LEAVE A REPLY

Please enter your comment!
Please enter your name here