Misalignment of the real exchange rate in the African Financial Community (CFA zone) and its policy implications

Etta-Nkwelle, Maru; Jeong, Jin-Gil; Fanara, Philip

doi:10.1080/09603101003800826

Cited by 6 publications

(3 citation statements)

References 9 publications

(18 reference statements)

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“…Edwards (1989) explained that the rationale behind ERER misalignment was that maintaining a "wrong" level of ERER for an extended period is detrimental to a country's competitiveness and economic performance. Given the significance of real exchange rate misalignment, a vast amount of theoretical and empirical literature has been written on the methodologies used to estimate this misalignment in various countries, such as [24][25][26]. Meanwhile, other studies have attempted to quantify misalignment effects on trade flows or economic growth, particularly for less-developed nations [27][28][29].…”

Section: Modeling Approach and Description Of The Database 21 Descrip...mentioning

confidence: 99%

Analyzing Exchange Rate Effects on Trade: Empirical Evidence

Ahmed,

Alnafissa,

Negm

et al. 2024

Sustainability

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In this study, we aimed to find a fair exchange rate for Egypt, exploring how exchange rate policies affect the country’s economic growth and food security. We also sought to answer an important question for Egyptian policymakers: “Do current exchange rate policies help reduce Egypt’s trade deficit?”. We used two methods in our research: First, we applied the purchasing power parity (PPP) method to determine the equilibrium real exchange rate (ERER). Then, we combined the computable general equilibrium model (CGE) with the ERER value from the PPP method to observe how different sectors interact with the overall economy and understand how household incomes and poverty levels are related. Our findings showed that the fair exchange rate is EGP 38.5 per US dollar, according to the PPP method. This new exchange rate may significantly impact the Egyptian economy. Some impacts are positive, such as better real GDP, more exports, and fewer imports; however, these are minor and not significant. On the downside, it may lead to higher inflation, increased prices for goods, and reduced consumption. Moreover, this study highlights the importance of having balanced exchange rate policies that consider Egypt’s unique economic situations, and challenges and align with other economic policies. Experience and reality have shown that exchange rates alone are not the only solution.

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Section: Modeling Approach and Description Of The Database 21 Descrip...mentioning

confidence: 99%

Analyzing Exchange Rate Effects on Trade: Empirical Evidence

Ahmed,

Alnafissa,

Negm

et al. 2024

Sustainability

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“…An exception is the CFA franc region in West Africa that has been tied to the French franc (and now the Euro) and Malawi for about 2008–10. Burkina Faso and Mali are included in the CFA franc region (Etta‐Nkwelle et al ).…”

mentioning

confidence: 99%

Policy or Markets? An Analysis of Price Incentives and Disincentives for Rice and Cotton in Selected African Countries

Short

Barreiro‐Hurlé

Balié

2014

Canadian J Agri Economics

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African governments have intervened extensively in markets through regulations and other price, trade, or marketing policies to provide price incentives to farmers. Using data from the Monitoring and Analyzing Food and Agricultural Policies program, this paper reports nominal rates of protection (NRPs) for rice and cotton at wholesale and farm level in selected African countries between 2005 and 2010.Rice is an import that has received high levels of border protection by the governments concerned while cotton is a key export crop which has been the focus of direct and indirect public intervention. For both commodities, we provide evidence for both market and nonmarket failures. In the case of rice, these prevent border protection from reaching farmers while raising consumer prices. Cotton ginning and marketing is concentrated in a small number of private sector companies in most countries studied. The farm level NRPs provide evidence of market failure in these countries that may be mitigated by policies that set indicative prices and encourage competition. The NRPs indicate nonmarket failure in the two countries that maintain parastatal monopsonies for cotton.Les gouvernements africains interviennent considérablement sur les marchés au moyen de la réglementation, de la politique de prix, de la politique commerciale ou de la politique de mise en marché dans le but de créer des incitations par les prix pour les agriculteurs.À l'aide de données tirées du programme Suivi et Analyse des politiques agricoles et alimentaires (SAPAA) en Afrique, nous présentons le taux nominal de protection (TNP) du riz et du coton pour la vente en gros et la venteà la ferme dans les pays sélectionnés africains pour la période 2005-2010. Le riz est une denrée d'importation soumiseà une forte protection frontalière de la part des gouvernements visés tandis que le coton est un important produit d'exportation qui fait l'objet d'une intervention publique directe et indirecte. Nous avons identifié des déficiences du marché et de la réglementation (non-marché) pources deux denrées. Dans le cas du riz, ces déficiences empêchent la protection frontalière de favoriser les agriculteurs et contribuentà l'augmentation des prixà la consommation. Dans la plupart des pays a l'étude, un petit nombre d'entreprises du secteur privé se partagent l'égrenage et la mise en marché du coton. Le TNP de la venteà la ferme montre l'échec du marché dans ces pays,échec qu'il serait possible d'atténuer au moyen de politiques quiétabliraient des prix indicatifs et encourageraient la concurrence. Le TNP indique l'échec de la réglementation dans les deux pays qui maintiennent des monopsones parapublics pour le coton.

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“…An exception is the CFA franc region in West Africa that has been tied to the French franc (and now the Euro) and Malawi for about 2008-10. Burkina Faso and Mali are included in the CFA franc region (Etta-Nkwellea et al, 2010).…”

Section: Theory and Methodsmentioning

confidence: 99%

Agricultural Policy Support, Production Incentives and Market Distortions in Sub-Saharan Africa

Balié¹

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I would also like to acknowledge previous colleagues and supervisors who mentored me during my professional career at FAO including Materne Maetz, Mafa E. Chipeta, and Keith Wiebe. I am particularly grateful to Keith as, in addition to being a friend, he encouraged me to pursue my PhD.Above all, I want to thank Brigitte, my wonderful wife, and Elise, Louis, Nina and Francesco, our extraordinary children, for their support and patience but also for their capacity to express their love every day. Thank you very much for helping me to grow as a husband, a father and a better person.

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Misalignment of the real exchange rate in the African Financial Community (CFA zone) and its policy implications

Cited by 6 publications

References 9 publications

Analyzing Exchange Rate Effects on Trade: Empirical Evidence

Analyzing Exchange Rate Effects on Trade: Empirical Evidence

Policy or Markets? An Analysis of Price Incentives and Disincentives for Rice and Cotton in Selected African Countries

Agricultural Policy Support, Production Incentives and Market Distortions in Sub-Saharan Africa

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