Summarized Analysis on Trade and Poverty
The objective of this study is to assess the impact of trade liberalization on poverty reduction in Togo. In this study, a model of static calculable general equilibrium model (SCGEM) was used. Within the framework of this approach, the construction of a CGEM was made in order to as much as possible adhere to the structural characteristics of the Togolese economy. The CGEM thus constructed provides an estimation of price changes and the average income of each group of households (urban or rural) and for the whole of the Togolese economy. It is on the whole noted that an increase in the international price of the products exported by the Togolese economy has a differentiated impact according to the sectors and according to whether it is a matter of production or of exports. The income effect is larger than the price effect, thus justifying the improvement of the purchasing power of Togolese households. There follows a positive equivalent variation, indicating an improvement of the welfare of urban and rural households without, however, bringing out a net disparity between these categories of households. One can thus affirm that foreign trade contributes positively to poverty reduction in Togo.