Sectoral implications of Macroeconomic policy reforms in a multisectoral frame work : evedence from Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Tadele Ferede

The objective of this study is to examine the impact of fertilizer subsidy elimination on the national economy. To carry out this, a multi- sectoral framework known as social accounting matrix (SAM)-based analysis is used. The social accounting matrix consists of fifteen production activities two factors of production (labor and capital), three institutions, namely, rural households, urban households, and government, one combined capital account, and the rest of the world account.

The study showed that complete elimination of fertilizer subsidy has brought about a decline in sectoral output, household income, and private savings. Specifically, the removal of fertilizer subsidy has harsher consequence on agricultural activities, particularly on teff, forward by wheat and maize. Of the industrial activities, food, beverages and textiles have been significantly affected negatively by the removal of fertilizer subsidy since these subsectors have linkage with agriculture. The loss of output due to removal of fertilizer subsidy is greater than the cost of subsidy and hence it has negative repercussions on the entire economy.

Corporate Author:Gebrehiwot Ageba, Jemal Mohammed and Solomon Tesfay (Editors) , Ethiopian Economic Association(EEA) , Department of Economics of AAU & Fredrich Ebert Stifung
Publisher:Ethiopian Economic Association (EEA)
Primary Descriptors:National economy

Secondary Descriptor:Agriculture, Fertilizer

Geographic Descriptors:Ethiopia
Cataloge Date:02/27/2013
Broad Subject heading:Economic policy – Macroeconomic reform
Call Number:338.963 PRO 2002
Serial Key Title:Proceedings of the Eleventh Annual conference on the Ethiopian economy
Publication catagory:Annual conference
Content type:EEA Publication
Publication date:2013-12-27 23:04:00
Forum or Discussion date:2013-02-27 15:58:22
Conference Place:Nov. 2-4, 2001, Nazareth, Ethiopia
Place of publication:Addis Ababa, Ethiopia
Type of material:Book
Current frequency:Annualy
Thematic area:Policy Reform, Implementation and outcome in Ethiopia
Author: Tadele Ferede