Impact Analysis of the Liberalization of Groundnut Production in Senegal: A Multi-household Computable General Equilibrium Model

In Senegal, the poverty reduction strategy will take place in a context characterized by international trade liberalization in the agricultural sector, in general and the groundnut sector, in particular. This is the backdrop against which we have developed a micro-simulated multiple household computable general equilibrium such as proposed by Decaluwé et al. (1999b). Four simulations have been made and their impacts assessed at the macroeconomic, sectoral and household levels. The first two simulations concerned tariff reforms, and the last two, the external shocks resulting from a change in export prices on the world market (groundnuts and groundnut oils). These simulations have been used to assess the impacts that the liberalization of the groundnut industry and the privatization of Société Nationale de Commercialisation des Oléagineux du Sénégal (SONACOS) provided for in the Framework Agreement, may have on households and to establish a link between these economic reforms, poverty and income ditribution. This model is very flexible because it allows, in particular, a change in the distribution of the target groups who had not been retained prior to the simulation exercise so that an ex post analysis of poverty and inequality to the modeling exercise could be carried out.