Sierra Leone stands to gain more by signing the Continental Free Trade Agreement despite reservations over loss of import duties, the country representative of the International Monetary Fund (IMF) has said.
Ms Iyabo Masha was quoted on Monday urging the government to sign the agreement which is believed to be before the country’s parliament.
The African Continental Free Trade Area (AfCFTA) agreement promises to break the cross-border trade barriers to ensure productive economic activities among member African countries. It specifically aims to create a single continental market for goods and services, with free movement of business people and investments, and thus paving the way for accelerating the establishment of a continental customs union.
Member countries were initially required to remove tariffs from 90 per cent of goods to allow free access to commodities and services across the continent.
The agreement was reached in the Rwandan capital, Kigali in March 2018. Kenya, Ghana and Rwanda were first to sign and ratify the agreement which requires 22 ratifications by members for it to come into effect.
“If this is implemented and the entire supporting environment is enabled and Sierra Leone becomes very, very prosperous in this area, there is going to be millions of new jobs created. That’s a lot of payroll taxes, new sectors are going to emerge, that’s a lot of manufacturing sector and corporate taxes,” said the IMF rep.
She added: “At the end of the day, even if there is going to be a loss in revenue from import duty, the new revenue coming in from a more diversified economy will completely offset that loss.”
Ms Masha was speaking in a radio interview in the context of the sub Saharan economic outlook.
Government, she said, should not be afraid to ratify the treaty as it will not disturb local investment, contrary to many fears.
KC/abj/APA