Understanding Central Africa’s New Common Tariff

There have been changes proposed to trade regulations throughout Central Africa that have been getting a lot of news coverage lately. There are efforts underway to consolidate the Economic and Monetary Community of Central Africa (CEMAC) and the Economic Community of Central African States (ECCAS) communities into one customs union by creating new tariffs. If the 11 nations that make up that region agree to the tariffs, the new rates will go into effect in Cameroon and will also impact its neighbors. It is important to understand how the new law may affect you.

How Tariffs Work

Tariffs are used by countries to control the economy as they are taxes that a country levies on goods imported from another country. Tariffs can be levied against one country, or many countries. Tariffs can also be applied to only certain items or they can be applied unilaterally on all goods imported from a particular country. Tariffs raise the prices of items that are imported from other countries which can encourage people to buy domestically produced products instead of imports. Tariffs can also be used as leverage against another country.

There are two types of tariffs that a country can impose: ad-valorem tariffs or specific tariffs.

• Ad-valorem tariffs are based on percentages and add a particular percentage to an item’s cost. An example of ad-valorem tariff would be a 10% tariff on all imported running shoes
• Specific tariffs are a set cost that is applied to a class of products. An example of a specific tariff would be a flat $50 fee added to the cost of rugs.

New Cameroon Tariffs Proposed

According to the United Nations Economic Commission for Africa, the new tariffs that have been proposed in Cameroon and throughout the other central African states are ad-valorem tariffs that would impact a variety of products. A new report from this Cameroonian news outlet says that the proposed tariffs would impact the pricing on everything from meat to medical supplies.

If these tariffs are accepted, livestock would be taxed at 5% to 20% per head and meats would be taxed at 20% per kilogram. The new tariffs would also place a 5% to 20% price increase on other animal products, such as milk and honey. Medical equipment would receive a tariff of 5%, and products like cereal seeds and air transport machines would not increase in cost. The largest tariffs would be applied to cocoa powder, tobacco, clothing, mineral water, and hair mesh. These items would also be hit with a 40% tariff.

What the New Tariffs Mean

Trade within the Central African region is the lowest in the developing world. Creating standardized tariffs throughout the region would hopefully create a uniform set of trade agreements that will encourage trade among the nations while boosting the economies of each nation individually. Importers who regularly bring goods from the rest of the world into Central Africa would have to go through an adjustment period while the new tariffs settle into place. However, those businesses could use a customs clearance to minimize the impact of the tariffs.

About HLOGCAM

HLOGCAM is an international logistics provider based in Cameroon. HLOGCAM offers logistics, shipping, and customs clearance to individuals and businesses all over the world. Our services include relocation services, freight forwarding, road transportation, and more. The HLOGCAM team provides professional logistics solutions to meet your business or personal needs.