Assessing the price-raising effect of non-tariff measures in Africa

Abstract

In spite of widespread tariff reductions, intra-African borders remain 'thick'. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data fromtheWorld Bank's International Comparison Project with anewdatabase onNTMsto estimatetheir effectonconsumer prices for selectedconsumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14%. At the product level, rice and other cereals, some types of meat (e.g. poultry) and edible oils tend to fetch high ad-valorem equivalents. Combining our estimates with data on household expenditure patterns from Kenya's household survey, we show that the effect is regressive, raising the cost of living by 9% for poor households. © The author 2014.Published by OxfordUniversityPress on behalf of theCentre for the Study of African Economies. All rights reserved.