Macroeconomic reform and the poor in the Gambia: A computable general equilibrium analysis

This paper Explores the impact on the poorer segment of the Gambian populace of the macroeconomic reform program (ERP). The framework of a computable general equilibrium model based on the social accounting matrix data set is used to capture the various linkages within the Gambian economy at the macro level. The impact of a contraction in government spending and a currency devaluation on the consumption and real income of the poor is analyzed. The results show that a cut in public expenditure has negligible impact on the overall economy, slightly improving urban employment and the conditions of the urban poor, whereas a currency devaluation improves the income, consumption and employment of poorer households. The model also shows that results are sensitive to parameter specifications.