The economic impact of agricultural projects in a petroleum-exporting country: the case of palm oil in the Republic of Congo

Abstract

he economic impact of agricultural projects in a petroleum-exporting country: the case of palm oil in the Republic of Congo This paper assesses the economy-wide impact of an agricultural project cultivating oil palms in specific rural areas of the Republic of Congo, an African country with a limited agricultural tradition and dominated by the mineral oil extraction sector. The project expects that all palm oil extracted will be used for domestic food consumption (direct human consumption or food processing). This paper illustrates a methodological framework to perform an impact analysis at local (rural) and supra-local (nationwide) levels and presents some preliminory results. Assessment is carried out by constructing and applying a multi-regional input-output model. The relevant economy-wide impacts ore then computed using appropriate multipliers. Results provide evidence of a significant positive impact of the project in terms of both wealth and employment, though they also demonstrate how much the strong dominance of the oil economy within the country may limit cross-sector and cross-region effects.Keywords: agricultural projects, impact assessment, multi-regional input-output model, rural regions. Republic of Congo, palm oil IAlthough this paper is common to both authors, the authorship can be attributed as follows: sections 3 and 4 to Bonfiglio; sections i, 2 and 5 to Roberto Esposti. This paper develops a study commissioned and funded by an Italian company involved in the energy sector. The authors wish to acknowledge the financieil and scientific support given by the company that made the present analysis possible. They also wish to thank one anonymous referee and the editor for their helpful comments and suggestions on an earlier version of the paper. The usual disclaimers apply.