Prepared by Jan Kees Martijn and Charalambos Tsangarides. Research assistance was provided by Dustin Smith and Gustavo Ramirez. Helpful comments were provided by Stephane Cosse. Catherine Pattillo and Hans Weisfeld reviewed the paper on behalf of the AFR networks.
“Making a Blessing of Oil: Sources of Growth in the CEMAC Region” Bata, March 15, 2006 (http://www.imf.org/external/np/speeches/2006/031506.htm).
Chad, Equatorial Guinea, and the Republic of Congo reported their latest external trade statistics for 1995. More recent data are available in the UN-COMTRADE database, derived from mirror flows (i.e., flows declared by partner countries), but these are partial data, which do not add up to total imports as estimated by the monetary authorities.
The CEMAC secretariat—which has provided much of the information underlying this overview—does not have up-to-date information on the incidence of the various concerns listed below across countries. As a result, this assessment should be seen as tentative and subject to further confirmation.
For example, the CAR provides temporary preferential tariff treatment on imports of heavy machinery and some vehicles for investment purposes of 8 percent.
These are rules within a preferential trade arrangement (PTA) specifying when a good is considered as produced within the PTA, and therefore eligible for preferential tariff treatment. Typical rules of origin are based on percentage of value added or changes in tariff heading.
Current plans envisage raising the local content requirement to 50 percent beginning in 2008. Under the present rules, goods also qualify as originating in the CEMAC if at least 50 percent of the raw materials (in value terms) used in the production stem from the CEMAC.
Including consideration of a suggestion in the Steenlandt report for moving to a criterion of “sufficient transformation” as evidenced by a change of product classification based on the SH nomenclature. In addition, proposals should be compatible with the requirements of an EPA (see below).
The CAR maintains export taxes of 2.25 percent, 4.25 percent, 4.05 percent, and 10.5 percent on gold, diamond, processed wood, and timber respectively. Equatorial Guinea currently has export taxes that range between 1 percent for (coffee and cocoa) to 15.8 percent (logs), with intermediate rates for other goods (re-exports, plywood and sawn wood). Cameroon and the Republic of Congo maintain export taxes on timber and logs only. Chad imposes export taxes on cattle and some plants.
Anecdotal evidence suggests that the amount of unrecorded informal trade within the region could be about 50 to 60 percent of recorded trade.
In Tsikata (1999) and Khandelwal (2004), TCI’s are calculate at the two-digit level, and those above 25 are considered strong. However, TCI’s at the one-digit level, as presented here, are higher by construction.
While the (2003 or 2004) import data relate to Cameroon, Gabon and the CAR, the export data include all six member countries, using older (1995) data for Equatorial Guinea, the Republic of Congo and Chad. After all, the existence of exports a decade ago still provides evidence of a potential for production. Exports were included only if they exceeded US$ 1 million.
The higher level of actual tariff receipts compared with the computed level for Gabon likely reflects misclassification in the fiscal data.
However, a positive volume response is unlikely to be large enough to maintain the original revenue level, given that CEMAC tariff rates are already below levels considered revenue maximizing (IMF, 2005).
The Schedule and principles for these discussions are presented in a joint 2004 document (Feuille de route des négociations des Accords de Partenariat Economique Entre l’Afrique Centrale et l’Union Européenne).
As discussed above, the current local content requirement within the CEMAC is 40 percent. CEMAC representatives noted that this internal requirement would need to be harmonized with the one under an EPA.
The part of imports from non-EU countries concerning goods not also imported from EU sources is smaller for the CEMAC as a whole than for individual countries because the calculation for the CEMAC as a whole considers EU exports to any CEMAC country.
The study finds that for Sub-Saharan Africa (excluding Southern Africa), the net effect could be a net decline in real income by 0.1 percent. However, the net result would switch to a 0.3 percentage point improvement in case developing countries undertook the same reductions in bound (but not necessarily applied) tariffs as the high income countries.
Anderson, K. Martin, W. van der Mensbrugghe, D. 2005, “Would Multilateral Trade Reform Benefit Sub-Saharan Africans,” World Bank Policy Research Working Paper 3616 (Washington: World Bank).
Berg, A. Krueger, A. 2003, “Trade, Growth, and Poverty: A Selective Survey,” IMF Working Paper 03/30 (Washington: International Monetary Fund).
Bouet, A. Bureau, J.C. Decreux, Y. Jean, S. 2005, “Multilateral Agricultural Trade Liberalization : The Contrasting Fortunes of Developing Countries in the Doha Round,”“The World Economy, Vol. 28 (No. 9), pp. 1329-1354.
Emini, C.A., Cockburn, J. Decaluwe, B. 2005, “The Poverty Impacts of the Doha Round in Cameroon: The Role of Tax Policy,” World Bank Policy Research Working Paper 3746 (Washington: World Bank).
Khandelwal, P., 2004, “COMESA and SADC: Prospects and Challenges for Regional Trade Integration, IMF Working Paper 04/227 (Washington: International Monetary Fund).
Y., Yang, 2005, “Africa in the Doha Round: Dealing with Preference Erosion and Beyond,” IMF Policy Discussion Paper 05/08 (Washington: International Monetary Fund).
Y., Yang, 2005, “Regional Trade Arrangements in Africa: Past Performance and the Way Forward,” IMF Working Paper 05/36 (Washington: International Monetary Fund).