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Impact of AfCFTA implementation on the Moroccan economy: A CGE modeling assessment

Author

Listed:
  • Raouf, Radouane
  • Dahane, Hajar
  • El Baouchari, Nabil

Abstract

The main objective of this research is to try to make an ex ante assessment of trade liberalization between Morocco and African Countries, within the framework of the AfCFTA, on production and value added by industry and on foreign trade, distinguishing between African and non-African partners. Therefore, this work addresses the effects of creation and/or diversion of trade with the two regions. It is also a question of analyzing the impact of this agreement on the well-being of households, on the use and remuneration of factors, employment (skilled, medium-skilled, and unskilled labor) and on the variation of relative prices. This issue represents a growing interest for public decision-makers for many reasons. The industrial sector in Morocco has become, over the past five years, the leading exporting sector ahead of phosphate products and represents a major stake in terms of industrialization and employment. Other reason relates to the fact that the country’s ambition is to integrate further into GVCs and improve its integration rate to reap the benefits of AfCFTA and avoid problems related to rules of origin. The implementation of this agreement would allow, a priori, the Moroccan industry to benefit from the entry of inputs at lower costs from the Africa zone and to gain access to a large market. This intuition is supported by statistical data on intra-African trade which shows an increasingly important dynamic in terms of trade in manufactured goods. To do this, a national and static CGE Model has been implemented to simulate the impact of the cancellation of customs duties between African countries and Morocco on its economy. This model is based on the standard PEP1-1 model, adapted to the Moroccan case with ad hoc modeling of foreign trade inspired by Boûet (2020). The model is calibrated on a SAM of the year 2018 with a disaggregation of the rest of the world account into two regions: Africa and the rest of the world excluding Africa.

Suggested Citation

  • Raouf, Radouane & Dahane, Hajar & El Baouchari, Nabil, 2021. "Impact of AfCFTA implementation on the Moroccan economy: A CGE modeling assessment," Conference papers 333262, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:333262
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    References listed on IDEAS

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