Across the continent, the African Continental Free Trade Area (AfCFTA) is steadily transforming from policy to practice. With over 50 countries signed on, and the promise of a unified market of 1.4 billion people, AfCFTA is one of the most ambitious projects Africa has ever undertaken.
But beneath the energy of trade agreements and the optimism of open borders lies a quieter, more technical conversation that will shape the success of AfCFTA:
Are we ready to talk about tax?
Not tax in isolation. But tax as the nervous system of this new economic body. Tax as both an enabler—and a barrier—to the kind of seamless trade we imagine.
Why this conversation is overdue
While AfCFTA focuses on reducing tariffs and eliminating non-tariff barriers, the reality is that inconsistent and fragmented tax regimes across Africa remain one of the biggest obstacles to intra-African trade. From differing VAT rates to complicated customs procedures and unpredictable excise taxes, many of Africa’s small and medium enterprises (SMEs) find themselves trading across borders that are anything but harmonised.
Tax policy was never meant to be a footnote in the AfCFTA conversation. It is central. Because you cannot talk about free trade without confronting how tax systems either enable or inhibit the movement of goods, services, and capital.
Real-world consequences: SMEs on the front line
Let’s look at a practical example.
A Kenyan agri-processor wants to export packaged goods to Uganda, Tanzania, and Rwanda. She encounters different VAT structures in each country. In one case, her VAT refund is delayed indefinitely. In another, she is forced to pay duties she doesn’t fully understand. The documentation process is duplicative, and navigating classification codes becomes a full-time job.
Eventually, she scales back her plans—not because there’s no demand, but because the tax friction at the border outweighs the business opportunity.
Multiply her story by thousands across the continent, and you begin to see the quiet erosion of AfCFTA’s promise—not through resistance, but through regulation.
What’s the real problem?
Every African country has designed its tax system to meet its domestic needs—often in response to fiscal gaps, political constraints, or global pressure from institutions like the IMF and World Bank.
Tax is sovereignty. It’s a government’s power to resource itself.
So when AfCFTA calls for harmonisation—whether in customs rules, digital services tax, or excise—it isn’t just an economic question. It’s a political one.
How do you convince countries to align on tax policy when they are still trying to meet basic revenue targets, manage debt, and maintain autonomy?
The case for harmonisation
Despite the challenges, there are compelling reasons to pursue tax alignment:
- Simplifying trade for SMEs: Standardised VAT and customs processes could reduce compliance costs and unlock regional value chains.
- Reducing tax arbitrage: Currently, companies may shift operations based on more favourable tax treatment, creating unhealthy competition between countries.
- Strengthening regional blocs: The East African Community (EAC) and ECOWAS have made strides in tax harmonisation—offering templates that AfCFTA could build upon.
- Attracting investment: A more predictable, transparent tax environment makes Africa more attractive for both intra-African and international investment.
Where do we begin?
A continental tax conversation doesn’t mean identical tax rates across Africa. That would be impractical.
What it does mean is:
- Agreeing on core principles—transparency, fairness, predictability
- Aligning administrative processes—like digital tax filing and documentation
- Establishing a continental tax code of conduct to guide reforms
- Investing in capacity building for revenue authorities across the continent
It also means engaging stakeholders beyond finance ministries: SMEs, civil society, academia, and the informal sector must be part of the design.
A new generation, a new vision
The majority of Africa’s population is under 35. This is a generation that is digital, mobile, and entrepreneurial. They are already trading on social platforms, building brands across borders, and asking for systems that make sense.
If we are serious about youth empowerment, AfCFTA cannot only exist on paper. It must live in the systems they touch—especially tax systems.
A harmonised tax environment won’t happen overnight. But the conversation must begin. Because silence is costing us scale, inclusion, and trust.
Final thoughts
AfCFTA has shown us what is possible when we dream beyond borders.
Now it’s time to do the same with tax.
Not just for the sake of revenue. But for the sake of a continent that believes in itself.
So, I’ll end with a question:
Can we create a shared tax vision for Africa—without losing national identity?
I believe we can. But only if we start talking.