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Revenue Implications of Continental Free Trade Area: A Short‐run Perspective of Malawi

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  • Michael Masiya

Abstract

The study estimates, in the short run, the tax revenue implications of Malawi joining the African Continental Free Trade Area (AfCFTA) using liberalization approaches and the SMART Model. The results show that Malawi is likely to benefit from joining the AfCFTA through trade creation. However, revenue losses are imminent and more pronounced for capital goods. The study recommends that Malawi should join the AfCFTA and liberalize while keeping a substantial portion of tariff lines for sensitive products and excluded products over a longer period of liberalization. The exclusion list should contain a significant amount of capital goods to minimize short‐run negative revenue impacts.

Suggested Citation

  • Michael Masiya, 2019. "Revenue Implications of Continental Free Trade Area: A Short‐run Perspective of Malawi," African Development Review, African Development Bank, vol. 31(4), pages 529-538, December.
  • Handle: RePEc:bla:afrdev:v:31:y:2019:i:4:p:529-538
    DOI: 10.1111/1467-8268.12408
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    Cited by:

    1. Mariam Amadou Diallo & Marijke D'Haese & Jeroen Buysse, 2024. "Growth, fiscal and welfare implications of trade liberalization in Africa: A macro‐micro modeling assessment of the Senegalese economy," African Development Review, African Development Bank, vol. 36(1), pages 111-124, March.
    2. Kodjo Adandohoin & Vigninou Gammadigbe, 2022. "The revenue efficiency consequences of the announcement of a tax transition reform: The case of WAEMU countries," African Development Review, African Development Bank, vol. 34(S1), pages 195-218, July.
    3. Pousseni Bakouan & Mahamadou Diarra & Idrissa M. Ouedraogo, 2024. "How Can Tariff Elimination and Trade Facilitation Affect East African Economies?," Foreign Trade Review, , vol. 59(1), pages 117-145, February.
    4. Simon Yannick Fouda Ekobena & Adama Ekberg Coulibaly & Mama Keita & Antonio Pedro, 2021. "Potentials of the African Continental Free Trade Area: A combined partial and general equilibrium modeling assessment for Central Africa," African Development Review, African Development Bank, vol. 33(3), pages 452-465, September.
    5. Debrah, Yaw A. & Olabode, Oluwaseun E. & Olan, Femi & Nyuur, Richard B., 2024. "The African Continental Free Trade Area (AfCFTA): Taking stock and looking ahead for international business research," Journal of International Management, Elsevier, vol. 30(2).
    6. Nechifor, Victor & Boysen, Ole & Ferrari, Emanuele & Simola, Antti & Wafula, Martin & Laichena, Joshua & Malot, Kenneth, 2021. "The AfCFTA at a country level: trade liberalization in Kenya," Conference papers 333308, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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