African Export-Import Bank Mobilizes $1 billion to Offset Revenue Losses
The African Export-Import Bank has mobilised $1 billion for an adjustment facility to offset revenue losses for countries that lower cross-border tariffs as part of an Africa-wide free trade area.
We will be able to go to global capital markets and we will be able to go to development finance institutions to mobilise more resources, but at the moment, it is a fund of a facility of $1 billion,” said Wamkele Mene,the secretary general of the African Continental Free Trade Area
In a recent report by World Bank, the short-term tariff revenues are predicted to decline by less than 1.5% for 49 out of 54 African countries, with the total tax revenues set to decrease by less than 0.3% in 50 countries under the deal. The planned reduction in duties has however raised concerns from countries that rely on the tariffs for income.
The Africa Continental Free Trade Area which is the world’s biggest free-trade area, was implemented on January 1st 2021 with the goal of improving trade within African countries.The trade pact aims to lower or eliminate cross-border tariffs on 90% of goods hence facilitating the movement of capital and people so as to promote investment and pave the way for a continent-wide customs union.