DAKAR (Reuters) - New trade pacts proposed by the European Union could put pressure on poor African nations' budgets by cutting customs revenues, a concern which needs to be addressed in negotiations, the IMF's director for Africa said.
The European Union has drafted the new Economic Partnership Agreements (EPAs) to replace preferential trade deals with 80 former colonies in the Africa, Caribbean and Pacific (ACP) group of nations which expire at the end of this year under World Trade Organisation rules.
The IMF's Abdoulaye Bio-Tchane said that African governments have expressed concerns to the Fund that the EPAs, which would grant the EU tariff-free access to African markets except for a few sensitive goods, could weaken regional trade between African nations by flooding markets with European goods.
"The EPAs would put pressure on the fiscal position of the ACP countries and that is one big concern for the Africans," IMF Africa Director Abdoulaye Bio-Tchane told Reuters.
The IMF calculates that for the poor nations of the West African Economic and Monetary Union (UEMOA) -- which groups Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo -- the EPA's will mean a fall in tax revenues equivalent to 2 percent of gross domestic product (GDP).
The UEMOA block has GDP of more than $110 billion.
"It's not a very small thing," Bio-Tchane said. "The long term impact of the discussion will certainly be positive to the Africans but you need to address the short-term concerns that are being raised by the Africans as well."
European officials have conducted a diplomatic offensive in recent weeks to convince ACP nations to sign up to the deals quickly or face higher tariffs for their goods entering Europe from January 1.
Louis Michel, European Union Commissioner for Development and Humanitarian Aid, said Ivory Coast alone stood to lose as much as 1 billion euros if it fails to sign a deal by the end of 2007.
Aid campaigners have accused the EU of blackmailing countries into signing the deals.
The five members of the East African Community (EAC) bloc have agreed a temporary trade deal with the EU, effectively securing them a one-year reprieve, a senior Kenyan trade official said on Friday.
Under that deal, EAC partners will enjoy duty- and quota-free market access to the EU for all products except sugar and rice, which are to be liberalised gradually.















