Fousseini Traoré

The economic costs of bribes and road harassment by officials in ECOWAS

Imperfect competition and asymmetric welfare effects of global price and productivity shocks: a CGE model analysis for Senegal

This article investigates the asymmetric effects of global price and productivity shocks on welfare in the context of imperfect competition. The primary objective is to understand how market concentration affects the transmission of economic shocks and their impacts on various households. A CGE model, calibrated on a 2014 social accounting matrix for Senegal, is used. The model features a trading sector operating under a Cournot oligopoly with increasing returns to scale. Two scenarios are simulated: a 15% increase in global import prices and a 10% increase in agricultural productivity, each considering different levels of market concentration. The findings reveal that higher global import prices reduce household well-being, a situation exacerbated by low market competition. In contrast, agricultural productivity gains enhance well-being, with these benefits amplified by greater competition. However, the wealthiest households in Dakar benefit from low competition due to their positions in oligopolistic companies. To maximize household well-being, economic policies should focus on strengthening market competition, particularly in the trading sector. Actions such as reducing entry barriers for new businesses and regulating anti-competitive practices can help mitigate the adverse effects of global price increases and amplify the benefits of agricultural productivity gains.

Africa’s agrifood trade: The state of play

The objective of this report is to establish a state of play of African trade by giving the most accurate picture possible and propose a typology of countries in terms of their degree of openness. It is preliminary work, the first in a series of documents, to pave the way for an in-depth analysis of the role of trade and trade policies in achieving food security and improved diets in Africa. The analysis is based on the rigorous exploitation of the best available data on trade in Africa (formal and informal), the use of the best analytical tools (gravity models) as well as recent indicators for measuring regional integration. The report is organized as follows. In the next section we set the scene by presenting an overview of the complex (positive and negative) links between trade, food security and nutrition. We then analyze Africa agrifood trade, examining first international flows, then regional patterns. In the following section we formally test whether Africa is “undertrading” or not. We next establish a typology of countries according to their degree of self-sufficiency and openness. The fifth – and final- section of the report provides some conclusions and recommendations.