How Vulnerable is Sub-Saharan Africa to Geoeconomic Fragmentation?
IMF Working Papers, April 5, 2024
Source details
- Canonical URL
- How Vulnerable is Sub-Saharan Africa to Geoeconomic Fragmentation?
Other formats
Bibliographic details
- Authors: Marijn A. Bolhuis, Hamza Mighri, Henry Rawlings, Ivanova Reyes, Qianqian Zhang
- Published: April 5, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400270796.001
Study focus and scope
- Examines potential effects of geoeconomic fragmentation (GEF) in the sub-Saharan Africa region (SSA) by quantifying potential long-term economic costs.
- Considers two alternative GEF scenarios in which trade relations are fully or partially curtailed across world economies.
- Disaggregates impact across SSA’s oil-rich, other resource-rich, and non-resource-rich countries.
Methodology and data
- Uses a multi-country multi-sector general equilibrium model.
- Dataset includes:
- 136 tradable primary commodity sectors,
- 24 manufacturing and services sectors,
- 145 countries in total, of which 32 are in SSA.
- Publication details:
- Pages: 27
- Series: Working Paper No. 2024/083
- Issue: 083
- Volume: 2024
- DOI: https://doi.org/10.5089/9798400270796.001
- Stock No: WPIEA2024083
- ISBN: 9798400270796
- ISSN: 1018-5941
Key findings and projections
- Under a GEF scenario with curtailed trade relations:
- SSA could experience long-term welfare losses of approximately 4 percent of GDP.
- These losses are twice the losses of the rest of the world.
- Drivers of the strong effect on SSA:
- Large losses concentrated in other resource-rich and non-resource-rich SSA countries.
- High dependence on commodity trade amplifies vulnerability.
- Under a less severe GEF scenario (strategic decoupling):
- SSA countries could derive minor gains from the re-shuffling of global market supply, especially in energy products.
Policy-relevant implications
- High dependence on commodity trade makes many SSA economies particularly vulnerable to severe GEF-induced trade disruptions.
- Less severe fragmentation (strategic decoupling) could create limited opportunities for SSA, notably in energy markets, suggesting that outcomes depend critically on the nature and severity of trade disruptions.
- The heterogeneity across oil-rich, other resource-rich, and non-resource-rich SSA countries implies policy responses should be tailored to country-specific resource endowments and trade exposure.
IMF Working Papers — Marijn A. Bolhuis, Hamza Mighri, Henry Rawlings, Ivanova Reyes, Qianqian Zhang; April 5, 2024; How Vulnerable is Sub-Saharan Africa to Geoeconomic Fragmentation?; Working Paper No. 2024/083, DOI: https://doi.org/10.5089/9798400270796.001
Content in this bundle
- Working Paper