Cowpea trade in West and Central Africa: A spatial and temporal analysis

Augustine Sangson Langyintuo, Purdue University

Abstract

Member countries of the Economic Community of West African States (ECOWAS) are determined to form a West African Monetary Zone (WAMZ) by 2004 whereby a single currency and a common monetary policy would be adopted as an attempt to promote regional trade. A West and Central Africa Cowpea Spatial and Temporal Equilibrium Model, formulated with Mixed Complementary Programming, was used to analyze the potential impacts of changes in (a) real interest rate, (b) levels of trade barriers, and (c) levels of demand and supply on price, volume and direction of cowpea (Vigna unguiculata (L.) Walp) trade in Nigeria, Ghana, Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger, Togo in ECOWAS and Cameroon, Chad, and Gabon in the Central African Economic and Monetary Community (CAEMC). If WAMZ results in reduced real interest rate within ECOWAS, this would substantially decrease storage financing costs affording consumers in the relatively larger coastal economies and benefit producers in the smaller Sahelian economies through the sale of larger volumes of cowpea at relatively cheaper prices while all others lose. In contrast, a relatively lower real interest rate in CAEMC may have negligible impact on regional welfare. Removing trade barriers among countries in ECOWAS may strongly alter the pattern of cowpea flows but increase the total trade volume and net social welfare. However, only consumers in net-importing countries and producers in net-exporting countries stand to benefit from sales of a larger volume. A supply shock through yield increasing technologies or improved storage would increase effective supply thus decreasing prices especially when the shock affects all producing countries compared with when only selected countries are affected. A demand shock would increase prices and volume of trade but decreased consumers' welfare. The results emphasize the importance of specialization based on regional competitive advantage, but also draw attention to the need to devise ways to ensure acceptable welfare distribution among producers and consumers in line with policy objectives of the individual countries within the proposed WAMZ.

Degree

Ph.D.

Advisors

Lowenberg-DeBoer, Purdue University.

Subject Area

Agricultural economics

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