Staple food prices in Zambia

Prepared for the COMESA policy seminar on “Variation in staple food prices: Causes, consequence, and policy options”, Maputo, Mozambique, 25-26 January 2010 under the Comesa-MSU-IFPRI African Agricultural Marketing Project (AAMP)Zambia, food security, food prices, Agricultural and Food Policy, Demand and Price Analysis, Food Security and Poverty, International Development, International Relations/Trade, q11, q13, q18,

Does the real GDP per capita convergence hold in the Common Market for Eastern and Southern Africa?

This article examines the convergence of real GDP per capita in the Common Market for Eastern and Southern Africa (COMESA) during the period 1950-2003. Income departures across countries were evaluated from several panel data unit root tests, especially we consider the absolute and conditional convergence. We find no evidence supporting the existence of convergence process for the income in the COMESA. Nevertheless, applying economic development criterion allows to identity two absolute convergence clubs into the COMESA, one for the most four developed countries (Egypt, Libya, Mauritius, Seychelles), and one other for the fourteen less developed ones. Thus, we show that most economies of COMESA are locked into a sustained poverty trap process.

Monetary integration in Eastern and Southern Africa: choosing a currency peg for COMESA

African countries involved in monetary integration projects have been advised to peg their currencies against an external anchor before the definite fixing of exchange rates. In this study we estimate optimum currency area indices to determine, between four alternatives, which international currency would be the most suitable anchor for COMESA members and for a set of other selected African economies. We conclude that the euro and the British pound prevail over the US dollar or the yen; that the euro would be the best pegging for most, but not all, COMESA members; and that some of these economies display evidence of more intense integration with third countries, with which they share membership in other (overlapping) regional economic communities, than within COMESA.Optimum currency areas; Monetarry anchor; Currency pegs; African regional economic communities; African monetary integration.

Assessment of the Impact of the Economic Partnership Agreement between the COMESA countries and the European Union

The purpose of this study, is to evaluate possible economic repercussions of the trade facet, in Economic Partnership Agreements (EPAs), currently being negotiated between countries of the Common Market in Eastern and Southern Africa (COMESA) and Member-States of European Union (EU). In so-doing, we have used two complementary models, the first one, based-on a general equilibrium approach, and the second, a partial equilibrium method. Indeed, multilateral trade agreements, will have implications trade activities, on the production of goods and factors, the price of consumer-goods, on the are of specialization of national economies, and their productive structure. Existing trade policy instruments also, will have direct and indirect effects on the market value of goods produced locally, or imported onto the markets of the COMESA sub-region.EPA-European Union-COMESA

Working Paper 109 - The First Africa Region Review for EAC/COMESA

The main objective of this paper is to present a mapping of trade-relatedbottlenecks in the EAC/COMESA region to eligible aid-for-trade (AFT)categories, and to articulate a strategy for mobilising significant amounts of aidfor trade. To do so, the paper reviews the constraints to trade in EAC/COMESA.It identifies existing AFT-related programmes and activities, and documents thestatus of their implementation, pointing out any gaps and the causes thereof.The paper is based on the premise that the EAC/COMESA region faces uniqueand severe constraints to trade related to the fact that many of the memberstates are land-locked. This, combined with poor infrastructure and services,cumbersome border procedures, inadequate mainstreaming of trade in nationaldevelopment strategies, and lack of progress in deepening economic integration,explains the region’s dismal trade performance, both intra-regionally andexternally. AEC/COMESA is aware of these constraints. The region haslaunched various initiatives to tackle them. The majority of these initiatives relateto trade facilitation measures.The North-South Corridor is one trade-related infrastructure project that hasattracted attention in the region, both by virtue of its scale and purported benefits.Even though the implementation of the project was slow initially, the politicalimpetus during the North-South Corridor High Level meeting in Lusaka, Zambiain April 2009 attracted financing in the region of US$1.2 billion. As the first pilot inEast Africa, the North-South Corridor clearly shows that Aid for trade can play akey role in sustaining ongoing efforts to overcome bottlenecks to trade.The key message is that an effective AFT strategy should focus primarily ontrade facilitation, with some emphasis on trade-related infrastructure. Sincesubstantial aid has traditionally been directed to technical assistance andcapacity building, and the trend is likely to continue, there is no need to build thiselement into the strategy per se. Such a strategy must: (a) Emphasise thecontribution of trade facilitation measures in reducing trade costs and enhancingexport competitiveness; (b) demonstrate the added benefits of modern traderelatedinfrastructure; (c) demonstrate the political will by the EAC/COMESAmember states to address the region’s constraints in the spirit of cooperation andsolidarity to landlocked neighbours; and (d) impress on the donor community theneed for greater AFT resources to help the region participate fully in global tradeand attain the MDGs.The Aid for Trade agenda should also highlight the importance of monitoring toshow its impact on trade and development. In this case, the EAC/COMESAregion should maintain a database of Aid for Trade for monitoring and evaluationpurposes.

Do South-South Trade Agreements Increase Trade? Commodity-Level Evidence from COMESA

South-South trade agreements are proliferating: Developing countries signed 70 new agreements between 1990 and 2003. Yet the impact of these agreements is largely unknown, as existing North- North and North-South micro-level studies are likely to yield misleading predictions for South-South trade agreements. This paper focuses on the static effects of South-South preferential trade agreements stemming from changes in trade patterns. Specifically, it estimates the impact of the Common Market for Eastern and Southern Africa (COMESA) on Uganda’s imports between 1994 and 2003. Detailed import and tariff data at the 6-digit harmonized system level are used for more than 1,000 commodities. Based on a difference-in-difference estimation strategy, the paper finds that—in contrast to evidence from aggregate statistics—COMESA’s preferential tariff liberalization has not considerably increased Uganda’s trade with member countries, on average across sectors. The effect, however, is heterogeneous across sectors. Finally, the paper finds no evidence of trade diversion effects.South-South trade agreements, trade creation, trade diversion

Staple food prices in Mozambique

Prepared for the Comesa policy seminar on “Variation in staple food prices: Causes, consequence, and policy options”, Maputo, Mozambique, 25-26 January 2010 under the Comesa-MSU-IFPRI African Agricultural Marketing Project (AAMP)Mozambique, food security, food prices, Agricultural and Food Policy, Demand and Price Analysis, Food Security and Poverty, International Development, International Relations/Trade, q11, q13, q18,

Assessing the Consequences of the Economic Partnership Agreement on the Ethiopian Economy

The results presented indicate that a free trade area would reinforce the linkages between Ethiopia and European countries, including traditional partners such as Italy, with implications for the regional integration arrangements that Ethiopia is currently involved in. There will be significant trade diversion away from other African countries currently trading with Ethiopia. The diversion will occur in the lowtechnology sectors, which are potentially good foundations for deepened regional integration based on trade in industrial goods. The results further indicate some important implications with respect to Ethiopia’s industrialization strategy. The liberalization of industrial sectors result in more trade effects, particularly negative trade diversion, compared to the results from agricultural liberalization. The loss in revenue, which is a strong feature in general liberalization, is at the sectoral level, more pronounced in the industrial liberalization. The economic structure of Ethiopia, which supports self-reliance in food from the agriculture sector, underpins the limited losses in agriculture as compared to the industrial sector. Clearly, instead of opening the doors to economic diversification, the EPA could lead Ethiopia to deepen its comparative advantages in agricultural products.Ethiopia- Economic Partnership Agreement- Trade impact