Continental trade agreement to have little impact on digital goods tariffs reduction —Report

The African Continental Free Trade Area Agreement (AfCFTA) is unlikely to have a significant impact on reducing tariff protection on digital goods in Africa.

An analysis by the International Finance Corporation (IFC) indicates that this was despite the comprehensive liberalisation expected from the agreement.

Zambia is among the African countries which have signed the AfCFTA agreement.

The IFC in its Digital Opportunities in African Businesses report released this week argued that there was an absence of tariff reductions on imports of digital goods from outside of the trade area.

These constituted most digital goods imports.

“Hence, the import-weighted tariff on these products is expected to decrease by only 0.3 percentage point, from 6.3 to 6.0 percent, on average, across countries, because of the agreement.

Despite tariff reductions of 4.4 percentage points, from 4.9 to 0.5, on average, within AfCFTA members, there is an absence of tariff reductions on imports of digital goods from outside of the trade area, which constitute most digital goods imports,” the IFC indicated.

To cut costs, IFC suggested that AfCFTA negotiations should consider including tariff concessions on digital goods imports from non-member countries.

Cost reduction would be more pronounced for the poorest countries with the highest tariffs on digital goods.

Finally, further market integration could also enhance technology upgrade by expanding the opportunities related to the market size of firms in general.

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