Fiscal policies coordination for the success of the AfCFTA 1

Under the AfCFTA agreement, goods and services are allowed to move in and out of participants’ countries without duties fees with the condition that the local content is at least 30%. Although the AfCFTA is a necessary first step toward greater integration and prosperity in Africa, there is no guarantee that it will provide the momentum for further integration steps. Relevant fiscal policies are among other necessary conditions for the success of the AfCFTA. We argue that the AfCFTA should harmonize external tariffs to facilitate trade. This should be complemented by reviewing the tax policy to mobilize more revenue through indirect taxes and expand the tax base. These additional resources are needed to build connectivity infrastructure to integrate the continent physically.