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EXECUTIVE BUREAU – NAIROBI - Session of 7-8 May 2009 - page 10 / 22

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Impacts of a 10%

Impacts of a 10%

reduction in remittances reduction in the flows

coming from the rest of of foreign capitals the world

Indicators

Variation in %

Total added value

-0.12

Nominal income of households -0.67 Available income of households-5.16

Formal application for work

-0.12

Variation in the well-being of

households

-6.56

Government saving

-29.25

Variation in %

  • -

    0.92

  • -

    0.43

  • -

    4.67

  • -

    1.38

  • -

    6.42

  • -

    29.32

These simulations clearly show that for some African countries, a reduction in the global prices of cash crops will translate into a fall in the production and export of these crops, a reduction in the nominal income and available income of households, an increase in unemployment in the agricultural sector, a degradation of households well-being, in other words, an amplification of the incidence of poverty. The same applies to the remittances coming from the rest of the world and the flows of external capitals which should translate into a fall in the added value in the national economy, the households’ income and public savings, an increase in unemployment and a deterioration of the well-being of households.

Development – Despite these potentials, prior to the crisis, Africa was already characterised by:

  • Mixed economic performances: With about 13% of the global population, Africa contributes only 2% of global GDP and less than 1% of the global industrial added value. Its share in global exports does not reach 2% of

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