A general equilibrium analysis of the effect of macroeconomic adjustment on poverty in Africa

Using CGE models for four countries (Cameroon, The Gambia, Madagascar, and Niger), this paper examines the consequences of macropolicy reform on real incomes of poor households in sub-Saharan Africa The simulations suggest th at, compared to alternative policy options, trade and exchange rate liberal ization tends to benefit poor households in both rural and urban areas-as r ents on foreign exchange are eliminated, demand for labor increases, and re turns to tradable agriculture rise. The small magnitudes of the gains in av erage real incomes of poor household groups modeled suggest that macropolic y reform alone will not be sufficient in the short run to significantly red uce poverty in Africa. (C) 2000 Society for Policy Modeling. Published by E lsevier Science Inc.