African countries in tariff move


African countries in tariff move

A Kenyan woman handweaves baskets

African countries hope common tariffs will improve trade

A group of African countries have agreed to adopt common external tariffs in an effort to boost trade and move towards a fully-fledged customs union.

Members of the Common Market for Eastern and Southern Africa trade bloc, including Egypt, Libya and Zimbabwe, agreed the move at a summit in Kenya.

A single tariff will be set for imports of finished goods and raw materials.

The organisation has been held back by the reluctance of some of its members to join its free trade zone.

Unity and division

Angola, Ethiopia and Uganda are among those currently sitting on the sidelines, citing concerns about the possible impact on their economies.

Countries such as Kenya and Zimbabwe see tariff harmonisation as a crucial step towards establishing a full customs union next year.

"We must harden our resolve to desist from engaging in practices aimed at protecting our individual markets," said Kenyan President Mwai Kibaki.

Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe

"Although such interventions may yield short-term relief to our individual economies, they can cause serious distortions in the larger Comesa market and erode investor confidence."

Under the new initiative, a common 10% tax will be levied on semi-processed products while finished goods will be subject to 25% tax.

Arrangements for how countries will move from their individual tariffs towards a common regime will be set out over the next year.

Mugabe role

Despite Zimbabwe’s worsening economic problems, President Robert Mugabe was appointed vice-chairman of the organisation at the meeting.

Once one of Africa’s richest nations, Zimbabwe is facing economic collapse due to stratospheric levels of inflation, high unemployment, and chronic shortages of fuel and food.

Mr Mugabe said it was in the region’s hands to ensure its members achieved "real and sustainable" economic progress.

"While we rightly emphasize trade for our growth and development, it is equally important that we move towards trading what we produce," he told the summit.

The combined trade of the bloc’s 19 members totalled $159bn (£79.5bn) last year.

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BBC NEWS | Business | African countries in tariff move

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