The Cross-Border Initiative in Eastern and Southern Africa

Table 1. CBI Countries: Status of Exchange Restrictions on
Payments and Transfers on Current International Transactions
(As of end-December 1998)

Country

Article VIII/XIV Status

Date of Article VIII Acceptance

Article VIII Restrictions

External Arrears

Article XIV Restrictions

Intention to Move to Article VIII


1. Burundi

XIV 1/

n.a.

yes

yes

yes 1/

yes; in due course

2. Comoros 2/

VIII

June 1, 1996

none

yes

n.a.

n.a.

3. Kenya 3/

VIII

June 30, 1994

yes 4/

yes

n.a.

n.a.

4. Madagascar 2/

VIII

Sept. 18, 1996

none

yes

n.a.

n.a.

5. Malawi

VIII

Dec. 7, 1995

none

none

n.a.

n.a.

6. Mauritius 2/

VIII

Sept. 29, 1993

none

none

n.a.

n.a.

7. Namibia

VIII

Sept. 20, 1996

none 5/

none

n.a.

n.a.

8. Rwanda

VIII

Dec. 10, 1998

none

yes

n.a.

n.a.

9. Seychelles 2/

VIII

Jan. 3, 1978

yes 6/

yes

n.a.

n.a.

10. Swaziland

VIII

Dec. 11, 1989

none 5/

none

n.a.

n.a.

11. Tanzania 3/

VIII

July 15, 1996

none

yes 9/

n.a.

n.a.

12. Uganda 3/

VIII

April 5, 1994

none

yes 10/

n.a.

n.a.

13. Zambia

XIV

n.a.

none

yes

yes 7/

yes; in due course

14. Zimbabwe

VIII

Feb. 5, 1995

yes 8/

none

n.a.

n.a.


Source: IMF Staff Reports; and data provided by the authorities.

1/ Burundi continues to avail itself of the transitional arrangements under Article XIV Sec. 2. In November 1997, Burundi reintroduced restrictions in current transactions which had been eliminated at the end of 1995.
2/ Member Indian Ocean Commission.
3/ Member East African Cooperation.
4/ A multiple currency practice arising from outstanding operations under the Exchange Risk Assumption Fund.
5/ Namibia and Swaziland are part of the Common Monetary Area (CMA) comprising Lesotho, Namibia, South Africa, and Swaziland which is a single exchange control area.
6/ On current payments (pipeline) including restrictions on transfers of dividends and management fees.
7/ On private debt service payments (principal) held before January 1991, before the exchange regime was liberalized in 1994.
8/ Arising from blocked corporate dividend and interest payments schemes (to be removed by mid-1999) and multiple currency practice arising from contracts under a discontinued forward exchange cover scheme (to be cleared by end-2000).
9/ With non-Paris Club members.
10/ On reschedulable payments with non-Paris Club bilateral creditors.

Table 2. CBI Countries: Summary Features of Exchange and Bilateral Payment Arrangements, and Cost Related Import Restrictions
(As of end-December 1998)

Country

Exchange Arrangements
Pegged Floating
Composite of Single
currencies Currency Independent Managed

Bilateral
Payment
Arrangements

Cost Related Import
Restrictions 3/


1. Burundi

yes

     

yes

yes

2. Comoros  

yes 1/

       
3. Kenya      

yes

   

4. Madagascar

   

yes

 

yes

 

5. Malawi

     

yes

   

6. Mauritius

   

yes

     

7. Namibia

 

yes 2/

     

yes 4/

8. Rwanda

   

yes

 

yes

 

9. Seychelles

yes

         

10. Swaziland

 

yes 2/

       

11. Tanzania

   

yes

 

yes

 

12. Uganda

   

yes

 

yes 6/

 

13. Zambia

   

yes

     

14. Zimbabwe

   

yes

 

yes

yes 5/


Source: Data provided by the cosponsors.

1/ French Franc.
2/ South African rand.
3/ Import surcharges.
4/ A wide range of imports from countries outside the SACU are subject to a general sales tax of 10 percent (as are locally produced goods), and to surcharges ranging from 7.5 to 40 percent.
5/ Only on final consumption finished goods.
6/ Inoperative.

Table 3. CBI Countries: Characteristics of Foreign Exchange Markets
(As of end-December 1998)

Country

Unified Interbank Market

Forward Market to Cover against Exchange Risk Foreign Currency Accounts (Restrictions) Authorized Dealers 1/ Prudential Restrictions (exposure limits) Restrictions on Capital flows

1. Burundi

no

no

limited

c.b.

no

yes

2. Comoros

no

yes

French franc (limited)

c.b.

no

yes 2/

3. Kenya

yes (1993)

yes

liberal

c.b. and b.u.

yes

no 3/

4. Madagascar

yes (1994)

no

liberal

c.b.

n.a.

yes

5. Malawi

yes (1994)

yes

liberal

c.b. and b.u.

no

no 7/

6. Mauritius

yes (1994)

yes

liberal

c.b. and b.u.

yes

no

7. Namibia

no

yes

limited 9/ (CMA member)

c.b. and b.u.

yes

yes 4/

8. Rwanda

yes (1995)

no

liberal

c.b. and b.u.

yes

yes

9. Seychelles

no

no

limited

c.b.

n.a.

yes

10. Swaziland

no

yes

limited (CMA member)

c.b.

yes

yes 4/

11. Tanzania

yes (1994)

yes

liberal

c.b. and b.u.

yes

yes

12. Uganda

yes (1993)

yes 8/

none

c.b. and b.u.

yes

no 5/

13. Zambia

yes (1996)

yes

liberal

c.b. and b.u.

yes

no

14. Zimbabwe

yes (1995)

no

limited

c.b. and b.u.

yes

yes 6/


Source: IMF Staff Reports; and data provided by the authorities.

1/ Commercial banks (c.b.) and /or bureaus (b.u.).
2/ Only outside French franc (Operations Account) area.
3/ Except for purchase of shares and securities by non residents (up to 40 percent) and individuals (up to 5 percent).
4/ Only outside CMA area. However, in respect of Namibia, there is a restriction even within the CMACpension funds and life insurance companies have to invest 35 percent of their assets domestically.
5/ Effective July 1, 1997.
6/ In 1996, the maximum foreign ownership of companies listed on the Zimbabwe Stock was raised to 40 percent.
7/ Malawi has removed restrictions related to the inflow and profit repatriation of FDI and has adopted a liberal attitude regarding portfolio investment by non-residents.
8/ Although there is no official currency futures market, authorized banks may deal in the forward exchange market, if there is an underlying approved import or export contract.
9/ Can be operated by EPZ companies and by individuals up to N$350,000.

Table 4. CBI Countries: Foreign Exchange Repatriation and Surrender Requirements
(As of end-December 1998)

Country

1992
(end-December)

1995
(end-December)

1997
(end-December)

1998
(end-December)


1. Burundi Full repatriation; full surrender excluding 50 percent of non-traditional exports. EPZ enterprises exempt from surrender; otherwise unchanged. Unchanged Unchanged
2. Comoros Full repatriation and surrender to authorized banks. Unchanged. Unchanged Unchanged
3. Kenya Full repatriation and surrender excluding 50 percent of non-traditional exports. Repatriation without surrender requirement. Unrestricted. Unrestricted
4. Madagascar Full repatriation; 60 percent surrender; 40 percent surrender to authorized banks. Repatriation and sale of merchandise export proceeds within 90 days of date of shipment; and surrender within 30 days of service receipts. 100 percent repatriation within 4 months. Unchanged
5. Malawi Full repatriation and surrender. Full repatriation and 60 percent surrender. Unchanged. Unchanged
6. Mauritius Repatriation; surrender to authorized dealer of unused proceeds within 6 months. Unrestricted since July 1994. 1/ Unrestricted. 2/ Unrestricted
7. Namibia Full repatriation and surrender. Full repatriation within 6 months of shipment; and surrender within 30 days of repatriation. Unchanged Unchanged
8. Rwanda Full repatriation and surrender to authorized banks. Repatriation; surrender of 90 percent of coffee and tea receipts. Repatriation of all foreign exchange receipts through commercial banks. 6/ Unchanged
9. Seychelles Completely unrestricted. Surrender requirement of 19 percent of commercial banks' foreign exchange inflows to central bank. 3/ Repatriation and surrender requirement of all foreign exchange earnings through domestic commercial banks. 5/ Unchanged
10. Swaziland Repatriation and surrender. Repatriation and surrender. Unchanged Unchanged
11. Tanzania Full repatriation: surrender of 10 percent of traditional exports and 50 percent of other merchandise. Surrender of invisible proceeds. Repatriation within 180 days. No surrender requirement. Repatriation within 60 days. Unchanged
12. Uganda Repatriation: 100 percent of coffee proceeds; otherwise surrender to authorized dealer. Repatriation to authorized banks. Unrestricted 4/ Unrestricted
13. Zambia 100 percent surrender of ZCCM metal exports; 10 percent surrender otherwise. ZCCM surrender reduced to 45 percent; otherwise completely unrestricted. Unrestricted. Unrestricted
14. Zimbabwe Repatriation and surrender. Repatriation. Unchanged Unchanged

Source: Staff Reports; and data provided by the authorities.

1/ Seventy-five percent of exports proceeds of sugar by the Mauritius Sugar Syndicate must be surrendered to the Bank of Mauritius.
2/ Surrender requirement by the Mauritius Sugar Syndicate removed effective July 1, 1997.
3/ No regulations governing repatriation of export proceeds.
4/ Unrestricted as of July 1, 1997, with liberalization of the capital account.
5/ Effective January 1, 1997.
6/ After a reduction to 50 percent in December 1996, the surrender requirement for tea and coffee receipts were eliminated in December 1997.

Table 5. CBI Countries: Characteristics of Import Duty Structure
(As of end-December 1998)

Country

Maximum Tariff 
(percent)


Number of Bands 1/
 


Average Tariff 13/
 


 

1996

 

1997

 

1998

 

1996

1997

1998

1996

 

1997

1998



Burundi

                         

   Import tariff

100

 

100

 

100

 

5

5

5

35.4

 

35.4

35.4

   ODC 2/

                         

   Fiscal duties

15

 

...

 

...

               

   Service tax

4

 

6

 

6

               


Comoros

                         

   Import tariff

40

3/

40

 

40

 

3

3

3

30.0

 

30.0

30.0

   ODC

                         

   Consumption tax

0

 

0

 

0

               

   Turnover tax

7

 

7

 

...

               

   Consumption
   surtax

0

 

0

 

0

               

   Presumptive tax

3

 

3

 

...

               

   Statistical tax

1-3

 

1-3

 

1-3

               

   Administrative
   tax

0

 

0

 

0

               


Kenya

                         

   Import tariff

25

 

25

3/

25

 

5

4

3

20.8

 

18.4

18.4

   ODC

                         

   Import
   surcharge

16

 

16

4/

10

               

   Surtax
   (incl. imports)

2.75

 

2.75

 

2.75

               


Madagascar

                         

   Import tariff

30

5/

30

5/

30

5/

3

3

3

21.0

 

18.0

18.0

   ODC

                         

   Customs duty

20

 

20

 

20

               

   Luxury surtax

20

 

20

 

...

               


Malawi

                         

   Import tariff

40

6/

35

6/

30

6/

4

4

4

21.0

 

21.0

15.8

   ODC

                         

   Surtax

20

 

20

 

20

               


Mauritius

                         

   Import tariff

80

7/

80

7/

80

7/

8

8

8

30.6

 

30.6

29.1

   ODC

                         

   Customs duty

0

 

0

 

0

               

   Fiscal duty

0

 

0

 

0

               

   Import excise
   duty

400

 

400

 

400

               


Namibia

                         

   Import tariff

83

6/

72

6/

75

6/

Multiple

Multiple

Multiple

n.a.

 

n.a.

15.1

   ODC

                         

   Addit'l sales
   duties

15

 

8

 

10

               

   Import
   surcharge

...

 

...

 

...

               


Rwanda

                         

   Import tariff

60

 

40

 

40

 

4

3

3

32.5

 

32.5

11.3

   ODC

                         

   Handling fee

4

 

4

 

4

               


Seychelles

                         

   Import tariff

200

8/

200

8/

200

8/

9

9

9

...

 

25.0

28.0


Swaziland

                         

   Import tariff

83

 

72

 

75

 

Multiple

Multiple

Multiple

18.0

 

14.4

15.1

   ODC

                         

   Sales tax

10

 

10

 

10

               

   Import
   surcharge

...

 

...

 

...

               


Tanzania

                         

   Import tariff

30

9/

30

 

30

 

4

4

4

16.3

 

21.8

21.8


Uganda

                         

   Import tariff

20

10/

20

 

15

 

3

3

2

13.2

 

...

9.2

   ODC

                         

   Excise surcharge

10

14/

10

14/

10

14/

             

   Processing fee

1

 

1

 

...

               


Zambia

                         

   Import tariff

25

 

25

 

25

 

3

3

3

13.6

 

13.6

13.6

   ODC

                         

   Import fee

5

 

5

 

0

               


Zimbabwe

                         

   Import tariff

100

11/

100

 

100

 

...

24

17

24.7

11/

26.6

24.0

   ODC

                         

   Import
   surcharge

10

12/

10

12/

15

12/

             

Source: Data provided by the co-sponsors.

1/ Excluding zero rate.
2/ Other duties and charges.
3/ 1997.
4/ As of September 1, 1997 and excludes suspended duties.
5/ The sum of the import tariff and customs duty does not exceed 30 percent.
6/ Malawi and Namibia have free-trade agreements with Zimbabwe.
7/ Excludes a surcharge of 20 percent of the two highest rates for nonpreferential countries.
8/ In the form of a trades tax applied to imported goods, goods manufactured or produed locally for sale, and specified services.
9/ Reduction of maximum tariff to 30 percent in 1997/98 budget (June 1997) (excludes shipment inspection fee of 1.2 percent.
10/ Reduction of maximum tariff to 20 percent in 1997/98 budget (June 1997) (except for manufactured tobacco (including cigarettes) at 30 percent).
11/ Effective March 1, 1997. Does not include a surcharge of 10 percent on finished goods.
12/ On finished goods.
13/ Average tariff is the simple average, i.e., the sum of the rates (including zero rate where applicable) divided by the number of rates. Excludes "other duties and changes". (including cigarettes) at 30 percent).
14/ On selected goods. In July 1997 discriminatory excises on selected goods were harmonized and reduced to 10 percent and it was announced that they would be eliminated in July 1998.

The Cross-Border Initiative in Eastern and Southern Africa

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