Electricity Reforms in Senegal: A Macro–Micro Analysis of the Effects on Poverty and Distribution

This paper uses a computable general equilibrium (CGE) macro-micro model to explore the distributional effects of price reform in the electricity sector of Senegal. In the first part of the paper we analyze the distribution of electricity in Senegal by income quintiles, between 1995 and 2001. The analysis demonstrates that poor and rural households are not the main beneficiaries of the expanded network. The results of the CGE application show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects are stronger and negative. Moreover, compensatory policies tested can help attenuate some negative effects.