Assessing the potential effects of the AfCFTA on togolese economy: An application of partial equilibrium model

Abstract

Togo is one of the African countries to join spontaneously the African Continental Free Trade Area (AfCFTA), a new benchmark for trade development which seeks to provide a framework for the liberalization of trade in goods and services in Africa. Several economic opportunities are expected in Togo as a result of the implementation of the AfCFTA. This article provides insights on the potential implications of the AfCFTA Agreement for Togo in terms of trade, revenue and welfare effects. By applying the WITS‐SMART simulation model on 2018 disaggregated trade data, we find that, trade effects in Togo are likely to surge by US$ 8.83 million while promoting consumers' welfare by US$ 1.09 million. However, revenue losses are imminent as the country might experience a drop in tariff revenue of US$ 4.66 million. Overall, the AfCFTA is expected to improve on the country's trade balance as exports are envisaged to outweigh imports. In order to mitigate the revenue loses, we recommend that the country keeps substantial portion of tariff lines for sensitive and excluded products over a longer period during the liberalization.

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