Unrestricted market access for sub-Saharan Africa: important benefits with little cost to the QUAD

Abstract

The issue of unrestricted market access for sub-Saharan Africa has featured lately in the debate on overcoming Africa’s development challenges through trade, rather than aid. This paper assesses empirically the impact of eliminating all tariff and non-tariff barriers faced by all exports from Sub-Saharan Africa to the developed economies of the QUAD, meaning Japan, United States, Canada and the European Union. The empirical assessment quantifies the potential benefits of Africa in terms of export growth and welfare,as well as the costs to be borne by developed and developing economies. The paper uses a global CGE model in its analysis. The study finds that as a result of unrestricted market access, African exports would increase by US$ 1.9 billion. This growth will be mainly due to agricultural exports towards Japan and the European Union. However, the results did also indicate that due to supply-side constraints, the growth in exports to the QUAD countries would be associated with a decrease in exports to other markets, as African producers shift their resources to the benefit of the European and Japanese markets. As a result of the growth of its exports and the associated multiplier effects, sub-Saharan African countries have the potential to benefit from a large growth in their value added.