Hamza Mighri's Books

Effect of Exchange Rate Movements on Inflation in Sub-Saharan Africa

By: Laurent Kemoe,Moustapha Mbohou,Hamza Mighri,Mr. Saad N Quayyum

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Effect of Exchange Rate Movements on Inflation in Sub-Saharan Africa

By: Laurent Kemoe,Moustapha Mbohou,Hamza Mighri,Mr. Saad N Quayyum

This paper provides new evidence on the exchange rate passthrough to domestic inflation in Sub-Saharan Africa (SSA) using both bilateral US dollar exchange rate and the nominal effective exchange rate (NEER), and monthly data. We find that depreciations cause sizable increases in domestic inflation. The passthrough in SSA is higher than in other regions and its magnitude depends on the exchange rate regime, type of exchange rate (bilateral versus NEER), natural resource endowment and domestic market competitiveness. The passthrough is found to be disproportionately larger and more persistent for large depreciation shocks, and for exchange rate changes that are more persistent. We also find evidence of asymmetry, with passthrough eight times stronger during depreciations than appreciations. Additional findings suggest that improved monetary policy effectiveness is an important driver of our observed declining estimates of exchange rate passthrough over time, supporting the long-standing view that strengthening monetary policy frameworks and credibility helps mitigate the impact of depreciations on inflation.

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International Monetary Fund

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ISBN 13

9798400269264

Fiscal Impacts of Climate Disasters in Emerging Markets and Developing Economies

By: Habtamu Fuje,Jiaxiong Yao,Seung Mo Choi,Hamza Mighri

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Fiscal Impacts of Climate Disasters in Emerging Markets and Developing Economies

By: Habtamu Fuje,Jiaxiong Yao,Seung Mo Choi,Hamza Mighri

Climate-induced disasters are causing increasingly frequent and intense economic damages, disproportionally affecting emerging markets and developing economies (EMDEs) relative to advanced economies (AEs). However, the impact of various types of climate shocks on output growth and fiscal positions of EMDEs is not fully understood. This research analyzes the macro-fiscal implications of three common climate disasters (droughts, storms, and floods) using a combination of macroeconomic data and comprehensive ground and satellite disaster indicators spanning the past three decades across 164 countries. Across EMDEs, where agriculture tends to be the principal sector, a drought reduces output growth by 1.4 percentage points and government revenue by 0.7 percent of GDP as it erodes the tax bases of affected countries. Meanwhile, likely reflecting limited fiscal space to respond to a disaster, fiscal expenditure does not increase following a drought. A storm drags output growth in EMDEs, albeit with negligible impact on fiscal revenue, but government expenditure increases due to reconstruction and clean-up efforts. We find only limited impact of localized floods on growth and fiscal positions. In contrast, AEs tend to experience negligible growth and fiscal consequences from climate-induced shocks. As these shocks have much more detrimental effects in EMDEs, international support for disaster preparedness and climate change adaptation play a crucial role for these countries to confront climate change.

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International Monetary Fund

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ISBN 13

9798400262913

How Vulnerable is Sub-Saharan Africa to Geoeconomic Fragmentation?

By: Marijn A. Bolhuis,Hamza Mighri,Henry Rawlings,Ivanova Reyes,Qianqian Zhang

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How Vulnerable is Sub-Saharan Africa to Geoeconomic Fragmentation?

By: Marijn A. Bolhuis,Hamza Mighri,Henry Rawlings,Ivanova Reyes,Qianqian Zhang

This paper studies the potential effects of geoeconomic fragmentation (GEF) in the sub-Saharan Africa region (SSA) through quantifying potential long-term economic costs. The paper considers two alternative GEF scenarios in which trade relations are fully or partially curtailed across world economies. Our quantification relies on a multi-country multi-sector general equilibrium model and takes a deep dive into the impact across SSA’s oil-rich, other resource-rich and non-resource-rich countries. The results are based on a detailed dataset including information for 136 tradable primary commodity and 24 manufacturing and services sectors in 145 countries—32 of which are in SSA. We find that under GEF, SSA could experience long-term wellfare losses of approximately 4 percent of GDP, twice the losses of the rest of the world. This strong effect results from the large losses of other resource-rich and non-resource rich countries in SSA, given their high dependence on commodity trade. However, if the world experiences a less severe GEF-induced trade disruption—a strategic decoupling—SSA countries could derive minor gains from the re-shuffling of global market supply, specially in energy products.

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