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Macroeconomic and distributional consequences of premature deindustrialization in Chad: A CGE analysis

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  • Otchia, Christian

Abstract

In this paper, we comprehensively document the dramatic changes in the manufacturing sector and the large declines in employment rates and uncover economic linkages across sectors that the literature on deindustrialization has had overlooked. The contribution of this paper is two-fold. First, we organize national accounts, firm census, and household survey data into a social accounting matrix which is a comprehensive analytical framework representing all economic transactions that took place in Chad in 2016. Second, we develop a dynamic computable general equilibrium model for Chad to highlight the transmission mechanism of deindustrialization. This study focuses on Chad for several policy reasons. As a landlocked country located in the heart of Africa, Chad covers an area of 1,284,000 km² and will have 15,332,132 inhabitants in 2017, with an average annual growth rate of 2.9% and a proportion of women of 50.7%. The Human Development Index (HDI) stood at 0.404 in 2017, showing that 7 out of 10 Chadians have deficits in terms of longevity, health, education, and well-being. Governance indicators in the public sector highlight institutional and organizational weakness. The advent of the oil era in 2003 brought about structural changes and major challenges in public policy, including public financial management. Non-oil economic growth was relatively strong over the period 2003-2014. Since 2011, the completion of numerous economic infrastructure projects (refinery, cement plant, optical fiber, etc.), which should make it possible to meet the minimum conditions for growth and diversification of the national economy, have not been able to lay the foundations for industrialization. The results of this study will, therefore, inform policy on promoting growth and development through diversification and industrialization.

Suggested Citation

  • Otchia, Christian, 2020. "Macroeconomic and distributional consequences of premature deindustrialization in Chad: A CGE analysis," Conference papers 333224, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333224
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    2. repec:fpr:ifprib:xinshendiao is not listed on IDEAS
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