Quantifying the revenue implications of the AfCFTA for Rwanda
The AfCFTA could significantly boost Rwanda’s intra-African trade, with modest losses in import duties that are offset by higher VAT, excise, and other customs revenues, especially when supported by trade facilitation measures. With a trade facilitation agreement, total customs tax revenue is projected to rise, making the AfCFTA fiscally manageable with appropriate policy reforms.
Authors
Naphtal Hakizimana
Principal Professional, Research and Policy Analysis, Rwanda Revenue AuthorityJing-Woei Chien
Lecturer, School of Economics, University of Cape TownChristian Shema Rwagasana
Research and Policy Analysis, Rwanda Revenue Authority
Mphatso Kumwenda
Senior Country Economist, Rwanda, International Growth Centre-
Edwards-Chien-Kumwenda-Hakizimana-Rwagasana-Policy-Brief-November-2025.pdf
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- The AfCFTA has the potential to significantly boost Rwanda’s trade within the continent, particularly if the agreement is accompanied by the implementation of a trade facilitation agreement (TFA).
- The potential losses in import duties from integration under the AfCFTA is modest. Liberalisation under the AfCFTA is estimated to only reduce import duties by Rwf 4.36 billion or 2.49% of total revenue from import duties.
- The losses in import duties collected under the AfCFTA is offset by increased VAT, excise and other customs duties collected on increased imports arising from new preference partners. Importantly, with a TFA, total customs tax revenue actually increases by Rwf 16.15 billion (2.75% of total customs tax revenue) or 0.65% of total government revenue.
- Prioritising trade facilitation to unlock the net fiscal gain; enhancing VAT collection efficiency; tightening up use of exemptions/remissions; and making sparing and transparent use of Schedule C exclusions can ensure AfCFTA is fiscally manageable.