Wednesday, November 29, 2023
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Desiderio Consultants Ltd. is a think tank and a network of independent professional international development consultants established to promote and influence customs & trade-related policies in African nations to achieve trade facilitation reforms aimed at improving international and regional trade
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African Union High Level private sector Forum opens in Nairobi

Today the 14th African Union High Level Private Sector Forum was opened at the Kenyatta International Convention Centre (KICC) in Nairobi, Kenya. The African Union High Level Private Sector Forum is an annual event which is organized by the African Union Commission aimed at exploring how the Private sector can drive the economic development Agenda in Africa. The Forum has expanded over the years its participation, and is now one of the strategic platforms organized by the African Union Commission to engage policymakers, private sector representatives, academia, civil societies and development organizations, and other stakeholders in discussions on how to accelerate industrialization and escalate investment in Africa. This year’s edition has been named “Public - Private Sector Engagement for Inclusive Growth and Sustainable Development while Deepening Regional and Continental Trade and Investment towards Implementation of AfCFTA”. Organized in collaboration with the East African Community Secretariat, it will end on 12 July 2023. Hereunder are some of the main conclusions from the first day of the Forum.


WTO publishes 2023 version of world tariff profiles

World tariff profiles is the publication that the World Trade Organization (WTO) makes in collaboration with ITC and UNCTAD to give an overview of the tariffs and non-tariff measures imposed by various countries and customs territories in the world (170 in total). In analyzing data referred to Africa, it is interesting to note how the Most-Favored Nation (MFN) average tariffs vary widely among its nations. MFN tariffs are the tariff rates that a country applies to imports from all its trading partners which are not part of a preferential trade agreement (such as a free trade area or customs union). In practice, MFN rates are the highest (most restrictive) tariffs that a country can charge on imports (see the table below). The WTO data shows that in Africa, the higher tariffs are applied by Sudan (21.6%), Tunisia (19.5%) and Algeria (18.9%). To be noted that the first and the last country (Sudan and Algeria) are non-WTO members. On the other hand, the lowest tariffs are applied by Mauritius (0.8%) and Seychelles (2.5%). In terms of Regional Economic Communities (RECs), the ones with the lower MFN tariff rates are SACU (7.6%) and ECOWAS (12%), while the one with the highest is CEMAC (18%). A mistery, instead, remains the huge difference in MFN tariffs between EAC member States, that as a customs union should apply a common tariff towards non-EAC members.


Latest edition of the World Investment Report reveals decrease of investment in Africa

According to the latest edition of the UNCTAD World Investment Report 2023, Foreign Direct Investment (FDI) flows in Africa registered a 44 per cent decline with respect to 2021, falling back to the 2019 level of $45 billion. However, the report also admits that the strong growth of FDI in Africa in 2021 was “anomalous”, having been influenced by a single large intrafirm financial transaction that was concluded in South Africa in that year. If this transaction is excluded, the change in FDI flows to Africa in 2022, compared to 2021, would have increased by 7 per cent.


AfCFTA tariff revenue losses: a risk for introducing new export and trade taxes in Africa?

One of the key aspects of the AfCFTA is that African countries that have signed and ratified this Agreement will phase out tariffs on 97% of products imported from other African countries (except Eritrea, that never signed the agreement). The progressive reduction - until abolition - of customs duties on such goods will make them less expensive and therefore more attractive for African consumers. This is supposed to lead to an increase in their demand which in turn will stimulate growth in trade among African countries. However, the AfCFTA does not eliminates other internal taxes that are levied by African countries on imports. This is the case of the VAT and excises for instance. Therefore, if on one hand the AfCFTA will cause African countries to lose revenue from customs duties, on the other hand, revenue from domestic taxes will increase because the latter will hit larger volumes of products entering through their borders. But what about export duties? Will they also be eliminated by the AfCFTA?


Malawi set to become the sixth member of the Central Corridor

On June 16, 2023, at the 12th inter-ministerial council meeting of the Central Corridor Transit Transport Facilitation Agency (CCTTFA), the Republic of Malawi's submitted a request to join the Central Corridor that was approved by the other corridor members. On the same occasion, a call was made to the Republic of Zambia to become a member of the Central Corridor as well. The meeting was also the occasion to discuss other major projects planned under the next year's budget, including the coordination of the tripartite railroad project linking Tanzania, Burundi and the Democratic Republic of Congo (DRC) and the conduction of a series of feasibility studies for the construction of safe parking areas along the Rwandan section of the central corridor.


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