Macroeconomic effects of semi-subsistence agricultural productivity growth: Evidence from Benin and extension to the WAEMU countries

Abstract

This paper studies the macroeconomic effects of an agricultural productivity growth in a semi-subsistence agriculture. To that end, a dynamic computable general equilibrium (CGE) model is used with the 2015 social accounting matrix (SAM) data of Benin. The results, with a few exceptions, are then extended to the West African Economic and Monetary Union (WAEMU) countries based on their SAM data. The simulation results suggest that an agricultural productivity growth could improve the overall economic growth, reduce trade deficit and enable an increase in households’ incomes as well as government revenues. In particular, the food industry and the salary earning households appear to be the main beneficiaries. Overall, these results suggest that public policies that promote growth in food crops productivity may turn out to be more effective in achieving greater economic performance and poverty reduction.