AfCFTA: Does it fast-track structural transformation in Senegal?

The African Continental Free Trade Agreement (AfCFTA) has recently entered into force and it appears as a possibility of economic growth and structural transformation for most African countries. Senegal is among the 54 countries that had signed and the 28 countries that had ratified the agreements.The aim of this paper is to evaluate the impact of intra-Africa tariff reduction/elimination in the AfCFTA framework for Senegal industrial transformation through trade and labour market impact. Four scenarios of the AfCFTA have been simulated, from full to partial liberalization, with a Senegal multi-sector static CGE model based on the STAGE CGE model. The economic transformation is assessed in terms of both international trade composition (intra-African versus trade with the rest of the world), domestic output, consumption pattern in rural and urban regions of the country and main macroeconomic indicators. Results suggest some trade diversion effects. Assuming the elimination of Senegal tariffs on all African products, main increase on imports come from sectors such as forestry, tobacco, grain milling, leather and footwear, and food crops. In addition, production increases mainly for manufacturing sectors including manufactured food , chemicals, cash crops , processed tobacco, hotels, fertilizers and machines . In contrast, production decreases for mining products, glass and pottery , food crops and forestry whose production is substituted by imports. Members can experience changes in production and consumption structures, by improving value chains integration through trade. Finally, macroeconomic impacts show that the elimination of trade barriers has the potential to boost trade and transform the production structure of Senegalese economy. However, the choice of sensitive products to be excluded is critical and have several implications.Fil: Maty Sall, Leysa. International Food Policy Research Institute; Estados UnidosFil: Ramos, Maria Priscila. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Saavedra 15. Instituto Interdisciplinario de Economía Política de Buenos Aires. Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política de Buenos Aires; Argentina. Universidad de Buenos Aires. Facultad de Ciencias Económicas. Departamento de Economía; Argentina24th Annual Conference on Global Economic AnalysisWashingtonEstados UnidosGlobal Trade Analysis ProjectColorado State Universit

Impact of Tariff and Non-tariff measures removals on structural transformation and poverty in Senegal: the case of AfCFTA

Senegal is among the 42 countries that had ratified the African Continental Free Trade Area agreement (AfCFTA). The objective of this study is to i) evaluate the impact of the abolition of imports duties on the transformation of the Senegalese economy ; ii) assess the impact of NTMs removal on Senegal industrial transformation through trade and labor market impact ; iii) estimate the socio-economic impact of AfCFTA on different groups of households. For that purpose, the model is a single country static CGE model, adjusted based on the STAGE model (McDonald, 2009). The Senegal CGE model was calibrated for 2014 based on the Social Accounting Matrix (SAM) of Boulanger et al. (2017). . The calibration data is completed with the BACI database for Senegal bilateral trade and MAcMapHS6 for tariffs.Four scenarios of the AfCFTA have been simulated, from full to partial liberalization, with a Senegal multi-sector static CGE model based on the STAGE CGE model. . In addition, to have more accurate results, Ad valorem equivalent (AVE) for NTBs estimated by Nguyen et.al (2020) at disaggregated level are used as an additional shock. To assess the socio-economic impact, the latest nationally representative survey “Enquête Harmonisée sur les Conditions de Vie des Ménages” (EHCVM-2018-2019) will be used to calibrate the microsimulation model. Results suggest the choice of sensitive products to be excluded is critical and have several implications. The criteria based on tariff revenue may be closer to the optimum full liberalization scenario. Sectoral and macroeconomic results across scenarios show that improving market access in Senegal for African partners based on a sensitivity criteria of tariff revenue losses is close to a full trade liberalization scenario. Full liberalization has a positive impact on household consumption globally and affects the production structure with a higher impact on manufacturing sector

Impact of Tariff and Non-tariff measures removals on structural transformation and poverty in Senegal: the case of AfCFTA

Senegal is among the 42 countries that had ratified the African Continental Free Trade Area agreement (AfCFTA). The objective of this study is to i) evaluate the impact of the abolition of imports duties on the transformation of the Senegalese economy ; ii) assess the impact of NTMs removal on Senegal industrial transformation through trade and labor market impact ; iii) estimate the socio-economic impact of AfCFTA on different groups of households. For that purpose, the model is a single country static CGE model, adjusted based on the STAGE model (McDonald, 2009). The Senegal CGE model was calibrated for 2014 based on the Social Accounting Matrix (SAM) of Boulanger et al. (2017). . The calibration data is completed with the BACI database for Senegal bilateral trade and MAcMapHS6 for tariffs.Four scenarios of the AfCFTA have been simulated, from full to partial liberalization, with a Senegal multi-sector static CGE model based on the STAGE CGE model. . In addition, to have more accurate results, Ad valorem equivalent (AVE) for NTBs estimated by Nguyen et.al (2020) at disaggregated level are used as an additional shock. To assess the socio-economic impact, the latest nationally representative survey “Enquête Harmonisée sur les Conditions de Vie des Ménages” (EHCVM-2018-2019) will be used to calibrate the microsimulation model. Results suggest the choice of sensitive products to be excluded is critical and have several implications. The criteria based on tariff revenue may be closer to the optimum full liberalization scenario. Sectoral and macroeconomic results across scenarios show that improving market access in Senegal for African partners based on a sensitivity criteria of tariff revenue losses is close to a full trade liberalization scenario. Full liberalization has a positive impact on household consumption globally and affects the production structure with a higher impact on manufacturing sector

AfCFTA: Does it fast-track structural transformation in Senegal?

The African Continental Free Trade Agreement (AfCFTA) has recently entered into force and it appears as a possibility of economic growth and structural transformation for most African countries. Senegal is among the 54 countries that had signed and the 28 countries that had ratified the agreements.The aim of this paper is to evaluate the impact of intra-Africa tariff reduction/elimination in the AfCFTA framework for Senegal industrial transformation through trade and labour market impact. Four scenarios of the AfCFTA have been simulated, from full to partial liberalization, with a Senegal multi-sector static CGE model based on the STAGE CGE model. The economic transformation is assessed in terms of both international trade composition (intra-African versus trade with the rest of the world), domestic output, consumption pattern in rural and urban regions of the country and main macroeconomic indicators. Results suggest some trade diversion effects. Assuming the elimination of Senegal tariffs on all African products, main increase on imports come from sectors such as forestry, tobacco, grain milling, leather and footwear, and food crops. In addition, production increases mainly for manufacturing sectors including manufactured food , chemicals, cash crops , processed tobacco, hotels, fertilizers and machines . In contrast, production decreases for mining products, glass and pottery , food crops and forestry whose production is substituted by imports. Members can experience changes in production and consumption structures, by improving value chains integration through trade. Finally, macroeconomic impacts show that the elimination of trade barriers has the potential to boost trade and transform the production structure of Senegalese economy. However, the choice of sensitive products to be excluded is critical and have several implications

Competetiveness of the cotton value chain in Africa

Cotton production and trade have a long history and important role in Africa, dating back centuries before the colonial period. While the sector saw several developments in the post colonial period, cotton trade remained primarily in unprocessed cotton because of several structural challenges affecting its production. Moreover, African exports of cotton have decreased in recent years from a total annual average of US$55 billion1 in the 2006–2010 period to$48 billion in the 2017–2021 period. At the same time, cotton imports increased by 37 percent, up from $37 billion to$51 billion, making Africa a net importer in the later period. At the value chain level, unprocessed cotton products have the lion’s share in the export market, accounting for about 12 percent of global exports of raw cotton during the 2017–2021 period. Africa’s semi-processed and processed cotton product exports account for 2 percent and 3 percent, respectively, for the same period. In addition, African imports of processed cotton increased as a share of world cotton trade (from 3 percent to 4 percent) over the two periods.PRIFPRI2; ReSAKSS; AGRODEP; Africa Regional Integration and the AfCFTA; CRP2Markets, Trade, and Institutions (MTI); Food and Nutrition Polic