Kassa, Woubet

Person:
Kassa, Woubet

Office of the Chief Economist for Africa Region

Fields of Specialization

International trade, Global value chains, Regional integration, Industrialization

ORCID

0000-0002-2867-3106

External Links

Google Scholar
RePEc

Departments

Office of the Chief Economist for Africa Region

Last updated: January 9, 2025

Biography

Woubet Kassa is an economist in the Office of the Chief Economist for the Africa Region at the World Bank. Before joining the Africa Region, he worked with the Trade and International Integration Unit of the Development Research Group at the World Bank. He is currently working on topics including international trade, global value chains, regional integration, and industrialization. Woubet is from Ethiopia, where he was a lecturer at Addis Ababa University and worked with the Ethiopian Policy Research Institute. He received his PhD in economics from American University where he is currently an adjunct professorial lecturer.

Full item page

Publication Search Results

Now showing 1 - 10 of 13

Trade Barriers or Catalysts? Non-Tariff Measures and Firm-Level Trade Margins
(Washington, DC: World Bank, 2025-01-09) Fiankor, Dela-Dem Doe; Kassa, Woubet; Lartey, Abraham
This paper empirically examines how standards and technical regulations affect export margins in three African countries at the firm level. The approach involves combining detailed customs transaction data at the firm-product level with bilateral information on non-tariff measures within a gravity model of trade framework. The findings show standards and technical regulations have no impact on the extensive margin of firm-level trade. However, they do diminish trade at the intensive margin in both the agriculture and manufacturing sectors. Small firms are more affected at the intensive margin compared to medium and large firms, and similarly, final goods are more affected compared to inter-mediate goods. Moreover, in the manufacturing sector, firms with initially higher product quality experience a reversal of the trade-reducing effect of standards and technical regulations, whereas in the agriculture sector, this effect is less pronounced for their counterparts. The results also suggest that African exporting firms face equivalent impacts in both regional and global markets.
Economic Transformation in Africa: The Role of North-South and South-South Trade
(Washington, DC: World Bank, 2024-09-09) Kassa, Woubet; Ndubuisi, Gideon; Owusu, Solomon
This paper contributes to the discussion on Africa's pathways to economic transformation by examining the roles of trade patterns—specifically, South-South and North-South trade—focusing on intermediate and capital goods sourced from both the Global North and the Global South. The paper relies on a panel dataset comprising 44 African countries from 2000 to 2022. To address endogeneity concerns, it uses a two-stage least squares method, employing instrumental variables that leverage exogenous changes in trading partner conditions. Findings from the analysis indicate that imported capital and intermediates significantly predict economic transformation in Africa. However, the impact of imports from the Global North and the Global South varies depending on the specific channel of economic transformation. Imports from the Global South are more influential in driving structural change, while those from the Global North are more effective in facilitating productivity convergence. This divergence highlights the distinct roles that North-South and South-South trade play in Africa’s economic transformation agenda. The findings underscore the importance of a nuanced trade policy that leverages the strengths of both regional and global trade partners to advance Africa's economic transformation.
Hotter Planet, Hotter Factories: Uneven Impacts of Climate Change on Productivity
(Washington, DC: World Bank, 2024-05-06) Kassa, Woubet; Woldemichael, Andinet
This study documents the impacts of climate change on firm-level productivity by matching a globally comparable and standardized survey of nonagricultural firms covering 154 countries with climate data. The findings show that the overall effects of rising temperatures on productivity are negative but nonlinear and uneven across climate zones. Firms in hotter zones experience steeper losses with increases in temperature. A 1 degree Celsius increase from the typical wet-bulb temperature levels in the hottest climate zone (25.7 degrees Celsius and above) results in a productivity decline of about 20.8 percent compared to firms in the coldest climate zone. The effects vary not only based on the temperature zones within which firms are located, but also on other factors such as firm size, industry classification, income group, and region. Large firms, firms in manufacturing, and those in low-income countries and hotter climate zones tend to experience the biggest productivity losses. The uneven impacts, with firms in already hotter regions and low-income countries experiencing steeper losses in productivity, suggest that climate change is reinforcing global income inequality. If the trends in global warming are not reversed over the coming decades, there is a heightened risk of widening inequality across countries. The implications are especially dire for the poorest countries in the hottest regions.
Trade Creation and Trade Diversion in African RECs: Drawing Lessons for AfCFTA
(World Bank, Washington, DC, 2021-08) Sawadogo, Pegdewende Nestor; Kassa, Woubet
This study aims to draw key lessons for the African Continental Free Trade Area using evidence from within the region. Although drawing lessons from the rest of the world is essential, given the unique features of economies in the Africa region, the most relevant lessons can be drawn from the experiences of regional economic communities in the continent. The study draws on the eight regional economic communities that have been recognized by the African Union as pillars on which the continent will rely to implement the African Continental Free Trade Area. The study evaluates the trade creation and trade diversion impacts of each of the eight RECs and examines their performance with the goal of drawing lessons and identifying challenges for the success of the African Continental Free Trade Area. Despite significant heterogeneities, there is more trade creation than trade diversion and a generally positive impact on trade within the regional economic communities. Two regional economic communities in particular—the East African Community and the Southern African Development Community—outperform all the other regional economic communities in terms of boosting intra–regional economic community trade. This is mainly associated with the high level of investment in trade facilitation, the level of synergy between national and regional goals, the density of economic activity, and the advancement in the quantity and quality of regional infrastructure. There are also many challenges that policy makers should address to realize the objectives of the African Continental Free Trade Area and transform the continent. Learning from the regional economic communities is central. But, given the scope of the African Continental Free Trade Area, there is also a need to examine the transition from regional economic communities to the African Continental Free Trade Area, which is expected to be a sticky transition.
Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains
(Washington, DC: World Bank, 2021-11-23) Abreha, Kaleb G.; Kassa, Woubet; Lartey, Emmanuel K.K.; Mengistae, Taye A.; Owusu, Solomon; Zeufack, Albert G.
Industrialization drives the sustained growth in jobs and productivity that marks the developmental take-off of most developed economies. Yet, academics and policy makers have questioned the role of manufacturing in development for late industrializers, especially in view of rapid advancements in technologies and restructuring of international trade. Concurrently, industrialization and structural transformation are integral to the African Union’s Agenda 2063 and the development strategies of several countries in Sub-Saharan Africa (SSA). Given this renewed interest in industrialization across the region, a central question is not whether SSA countries should pursue industrialization as a potential path to sustainable growth but how to promote the prospects of industrialization. Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains addresses this question by reassessing the prospects for industrialization in SSA countries through integration into global value chains. It also examines the role of policy in enhancing these prospects. The main findings indicate that • SSA has not experienced premature deindustrialization; the region has witnessed substantial growth in manufacturing jobs despite a lack of improvement in the contribution of manufacturing value-added to GDP. • The region’s integration into manufacturing global value chains is reasonably high but it is dominated by exports of primary products and engagement in low-skill tasks. • Global value chain integration has led to job growth, and backward integration is associated with more job creation. The report emphasizes the role of policy in maintaining a competitive market environment, promoting productivity growth, and investing in skills development and enabling sectors such as infrastructure and finance. Policy makers can strengthen the global value chain linkages by (1) increasing the value-added content of current exports, (2) upgrading into high-skill tasks, and (3) creating comparative advantages in knowledge-intensive industries.
Africa in the New Trade Environment: Market Access in Troubled Times
(Washington, DC: World Bank, 2022-02-10) Coulibaly, Souleymane; Kassa, Woubet; Zeufack, Albert G.; Mattoo, Aaditya; Coulibaly, Souleymane; Kassa, Woubet; Zeufack, Albert G.
Sub-Saharan Africa represents only a small share of global production and trade while hosting half of the extreme poor worldwide. To catch up with the rest of the world, the continent has no alternative: it must undertake reforms to scale up its supply capacity while better linking its production and trade to the global economy. If it does so, it stands to gain from unlimited demand and innovation along the supply chain. Some progress has been made over the past decade, with the region’s exports and imports growing rapidly. Because most African economies rely heavily on trade for a large share of national income, they will also be more vulnerable to the trade disruptions of external shocks, as illustrated by the recent COVID-19 pandemic. Africa in the New Trade Environment: Market Access in Troubled Times provides a comprehensive, state-of-the-art analysis by a team of renowned trade economists who present a strategy to bolster Sub-Saharan Africa’s market access in the current global environment.
Uncertainty in Preferential Trade Agreements: Impact of AGOA Suspensions on Exports
(World Bank, Washington, DC, 2023-05-01) Edjigu, Habtamu; Hakobyan, Shushanik; Kassa, Woubet
This study examines the impact of the abrupt suspension of African Growth and Opportunity Act benefits on exports from eligible African countries. The study uses a triple difference-in-differences estimation that controls for both country- and product-level export changes. The results suggest that the suspension of the African Growth and Opportunity Act has had a considerable negative impact on the level of exports to the United States. The impact appears to be bigger for countries with a high African Growth and Opportunity Act utilization rate. The suspension is associated with a 39 percent decline in exports to the United States. At the product level, the suspension hurt apparel and textile exports, leading to a decline of their exports by about 88 percent. Understanding the impact of withdrawing access to a nonreciprocal trade agreement is particularly important now, as the European Union began negotiating Economic Partnership Agreements with African countries, as a sign of a shift to reciprocity; the United States is considering a similar path of negotiating free trade agreements with individual African countries. These developments underscore the need to prepare for a post–African Growth and Opportunity Act period with more reciprocity, as trade uncertainty is becoming rampant.
Africa's Pulse, No. 25, April 2022
(Washington, DC: World Bank, 2022-04-13) Calderon, Cesar; Zeufack, Albert G.; Kabundi, Alain; Kubota, Megumi; Korman, Vijdan; Raju, Dhushyanth; Abreha, Kaleb Girma; Kassa, Woubet; Owusu, Solomon
Sub-Saharan Africa's recovery from the pandemic is expected to decelerate in 2022 amid a slowdown in global economic activity, continued supply constraints, outbreaks of new coronavirus variants, climatic shocks, high inflation, and rising financial risks due to high and increasingly vulnerable debt levels. The war in Ukraine has exacerbated the already existing tensions and vulnerabilities affecting the continent. Given the sources of growth in the region and the nature of the economic linkages with Russia and Ukraine, the war in Ukraine might have a marginal impact on economic growth and on overall poverty—as this shock affects mostly the urban poor and vulnerable people living just above the poverty line. However, its largest impact is on the increasing likelihood of civil strife as a result of food- and energy-fueled inflation amid an environment of heightened political instability. The looming threats of stagflation require a two-pronged strategy that combines short-term measures to contain inflationary pressures and medium-to-long-term policies that accelerate the structural transformation and create more and better jobs. In response to supply shocks, monetary policy in the region may prove ineffective to bring down inflation and other short-run options may be restricted by the lack of fiscal space. Concessional financing might be key to helping countries alleviate the impact of food and fuel inflation. Over the medium term, avoiding stagflation may require a combination of actionable measures that improve the resilience of the economy by shoring up productivity and job creation. Lastly, ongoing actions to enhance social protection—including dynamic delivery systems for rapid scalability and shock-sensitive financing—could be strengthened further to improve economic resilience against shocks and foster investments in productive assets.
Mobile Access Expansion and Price Information Diffusion: Firm Performance after Ethiopia’s Transition to 3G in 2008
(World Bank, Washington, DC, 2021-08) Choi, Jieun; Abreha, Kaleb; Kim, Hyun Ju; Kassa, Woubet; Kugler, Maurice
This paper investigates whether enhanced access to mobile communications, including internet, primarily through smart phones, increases competition as price information is more widely available to customers—both households and firms. The exogenous shock to identify these impacts is the transition from 2G to the 3G broadband network standard in 2008, and the induced changes in the geographic variation across districts of data plan availability for households. The operational mechanism is that better household and firm telecommunications access can close information asymmetry gaps between buyers and sellers, with increased competition leading to improved firm performance. Lower markups and reduced price dispersion can result from better incentives for firms to preserve and grow market share. And as price competition squeezes profit margins, there are more incentives for firms to reduce costs—inducing higher total factor productivity growth. Improved firm performance can generate jobs and economic transformation. Indeed, faster productivity growth, due to enhanced access for buyers to mobile telecommunications, can translate into higher formal employment and wages. One open question is whether the potential competition, driven by the increased mobile telecommunications access of buyers, which help them have the best alternative prices at their fingertips, will also impact export-oriented companies. The prior is that the firm performance improvement effect would be more salient for firms mostly focused on local markets. The primary data sources are manufacturing firm census data and household expenditure survey data across woredas (districts or counties) in Ethiopia. First, the paper investigates the relation between expanded access with the 3G network to price information through mobile phones (measured at the woreda level as share of households with substantive expenditure to access data through smartphones) and firm performance measures (markups, total factor productivity, labor productivity, wage growth, wage gaps and employment growth.), across districts with different shares of mobile telecommunication and data plan penetration subscription. The paper estimates models with difference-in-differences and triple differences. The evidence is consistent with competition intensification after the improvement in access to mobile communication due to the 3G network rollout. In particular, markups were reduced and there was higher growth in productivity, wages, and employment.
Revisiting the Trade Impact of the African Growth and Opportunity Act: A Synthetic Control Approach
(World Bank, Washington, DC, 2019-08) Kassa, Woubet; Coulibaly, Souleymane
This study examines the impact of the African Growth and Opportunity Act using the synthetic control method, a quasi-experimental approach. The novelty in the approach is that it addresses problems of estimation that are prevalent in nonexperimental methods used to analyze the impact of preferential trade agreements. The findings show that most of the eligible countries registered gains in exports due to the African Growth and Opportunity Act. However, the results are varied, and the gains were largely unsteady. Much of the gains are due to exports of petroleum and other minerals, while there are few countries that were able to expand into manufacturing and other industrial goods. The positive trade impacts were largely associated with improvements in information and communications technology infrastructure, integrity in the institutions of legal and property rights, ease of labor market regulations, and sound macroeconomic environment, including stable exchange rates and low inflation. Undue exposure to a single market, like the United States, or few commodities may have also restricted the gains from trade.