Unlocking Africa’s $64 Billion Excise Revenue Opportunity

This article provides a summary of the chapter ‘The Growing Potential of Excise Taxation as a Source of Domestic Revenue Mobilisation in the Context of the African Continental Free Trade Area’, recently published in the European Yearbook of International Economic Law ¹.

The potential for excise to significantly contribute to revenue mobilisation in Africa and support the effective functioning of the African Continental Free Trade Area (AfCFTA) is substantial. African countries could collect $64.8 billion in excise, representing a significant increase of $32 billion compared to the current intake. Broadening excise policy and strengthening excise administration – with excise traceability systems and tax stamps – could play an important role in supporting much-needed domestic revenue mobilisation.

A changing revenue landscape

The AfCFTA aims to establish a single market for goods and services in Africa, which is bound to have a significant impact on various taxes.

Its most immediate impact is likely to be a decline in customs duties, primarily due to the lowering – and eventual removal – of tariffs on intra-African trade. There may also be a decline in customs duties due to trade diversion in favour of customs-free imports from other AfCFTA countries.