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South Africa risks forfeiting tariffs on about R70 billion worth of trade when a continent-wide free-trade agreement kicks in, according to the country’s tax commissioner.

The first trade under the African Continental Free Trade Area, which could cover a market of 1,2 billion people with a combined gross domestic product of $2,5 trillion, is set to start July 1. The agreement requires member states to work toward eliminating or lowering tariffs on 90 percent of goods to facilitate the movement of capital and people, and create a liberalised market for services.

South African imports totalled R1,27 trillion in 2019, according to preliminary data from the tax agency, including about R152 billion from the rest of the continent.

Of that, R70 billion imports came from outside the duty-free Southern African Customs Union and Southern African Development Community, and the tariff income on that is at risk, Edward Kieswetter, the head of South African Revenue Service, said in an interview in Cape Town. — Bloomberg.