The Economic Community of West African States : Fiscal Revenue Implications of the Prospective Economic Partnership Agreement with the European Union
This paper applies a partial equilibrium model to analyze the fiscal revenue implications of the prospective economic partnership agreement between the Economic Community of West African States (ECOWAS) and the European Union. The authors find that...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/06/7745702/economic-community-west-african-states-fiscal-revenue-implications-prospective-economic-partnership-agreement-european-union http://hdl.handle.net/10986/7445 |
| Summary: | This paper applies a partial equilibrium
model to analyze the fiscal revenue implications of the
prospective economic partnership agreement between the
Economic Community of West African States (ECOWAS) and the
European Union. The authors find that, under standard import
price and substitution elasticity assumptions, eliminating
tariffs on all imports from the European Union would
increase ECOWAS' imports from the European Union by
10.5-11.5 percent for selected ECOWAS countries, namely Cape
Verde, Ghana, Nigeria, and Senegal. This increase in imports
would be accompanied by a 2.4-5.6 percent decrease in total
government revenues, owing mainly to lower fiscal revenues.
Tariff revenue losses should represent 1 percent of GDP in
Nigeria, 1.7 percent in Ghana, 2 percent in Senegal, and 3.6
percent in Cape Verde. However, the revenue losses may be
manageable because of several mitigating factors, in
particular the likelihood of product exclusions, the length
of the agreement's implementation period, and the scope
for reform of exemption regimes. The large
country-by-country differences in fiscal revenue loss
suggest that domestic tax reforms and fiscal transfers
within ECOWAS could be important complements to the
agreement's implementation. |
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