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Impact of Informal Re-exports between Benin and Nigeria: A CGE analysis

Author

Listed:
  • Mathieu Paquet

    (GREDI, Faculte d'administration, Université de Sherbrooke)

  • Luc Savard

    (GREDI, Faculte d'administration, Université de Sherbrooke)

Abstract

Ever since the end of the Biafra war, re-exportation has become an important economic activity for Benin’s economy. One of the reasons for the existence of this type of commerce resides in the disparity in economic policies between Benin and Nigeria. We model this sector and its interrelations with the remainder of the economy as well as on public finances. A CGE model was developed with data from Benin’s social accounting matrix for 1999. In the model, we distinguished between formal and informal households (households that work in the informal sector) and a distinction was incorporated into the model in regards of the re-exportation industry by dividing the latter into its 8 most important re-export sectors. We simulated a 10% depreciation of the CFA F and a 20% decrease in import tariffs. Our findings demonstrate a great sensitivity of government’s revenues to the activity of this informal sector. For one simulation, public savings dropped by almost 25%, but in both cases, the government’s income was strongly affected.

Suggested Citation

  • Mathieu Paquet & Luc Savard, 2009. "Impact of Informal Re-exports between Benin and Nigeria: A CGE analysis," Cahiers de recherche 09-14, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    • Handle: RePEc:shr:wpaper:09-14
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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0914.pdf
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    References listed on IDEAS

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    1. Savard, Luc & Adjovi, Épiphane, 1998. "Externalités de la santé et de l’éducation et bien-être : un modèle d’équilibre général calculable appliqué au Bénin," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(3), pages 523-560, septembre.
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    Cited by:

    1. Tapias, J., 2021. "Temporary employment, informality, poverty and inequality," Documentos de trabajo - Alianza EFI 20047, Alianza EFI.
    2. World Bank Group, 2015. "The Republic of Benin Diagnostic Trade Integration Study Update," World Bank Publications - Reports 22968, The World Bank Group.
    3. Celine de Quatrebarbes & Bertrand Laporte & Stéphane Calipel, 2021. "Fighting the soaring prices of agricultural food products. VAT versus Trade tariffs exemptions in a context of imperfect competition in Niger : CGE and micro-simulation approach," CERDI Working papers hal-03138369, HAL.
    4. Anushree Sinha, 2010. "Productivity of Indian Informal Workers," Journal of South Asian Development, , vol. 5(1), pages 15-52, April.
    5. Céline de Quatrebarbes & Bertrand Laporte & Stéphane Calipel, 2021. "Fighting the soaring prices of agricultural food products -VAT versus Trade tariffs exemptions. A case study in Niger," Working Papers hal-03164636, HAL.

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    More about this item

    Keywords

    CGE model; informal trade; Benin; Nigeria; public finance;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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