The Erosive Impact of COVID-19 on Customs Revenues in Africa

COVID-19 has brought the world to a standstill, with its impact on health, mortality, and the economy. On one hand, the COVID-19 pandemic is expected to bring about a major decline in tax revenue in most countries stemming from overall economic slowdown and tax policy and administration measures taken in response. On the other hand, the COVID-19 pandemic is impacting trade as it affects customs border operations. Ultimately, how is this pandemic impacting trade flow and more specifically customs revenues so far? This analysis seeks to shed light on the impact of this novel pandemic on customs revenues in some selected African countries. This study has estimated that on account of the COVID19 pandemic, 18 ATAF member states have lost USD 450-500 million in three months, with the share of the loss in total customs revenue ranging from 5-10 percent. At Continental level, the study estimates that Africa has lost roughly USD 1.09 billion of customs revenues in the three months (from February 2020 to April 2020) due to COVID-19. The analysis further predicts that ceteris paribus, by the end of December 2020, Africa would be estimated to have lost about USD 3.99 billion in customs revenues because of the pandemic