**<u>Table 1: Basic Statistics on the consumption of rice in selected West and Central African countries</u>**

|**Food item**|**Share in**<br>**Total consumption**|**Proportion**<br>**Consumers**|**Share consumed**<br>**by bottom 40%**|**Share consumed**<br>**by bottom 60%**|
|---|---|---|---|---|
|Burkina Faso (2003; poverty at 46.4%)|3.6|60.2|13.4|25.6|
|D. R. Congo (2005; poverty at 71.3%)|3.2|57.3|15.5|31.7|
|Gabon (2005, poverty at 32.7%)|3.0|91.4|31.7|51.1|
|Ghana (2006, poverty at 28.5%|3.1|74.6|16.4|33.0|
|Guinea (2003, poverty at 49.1%)|13.0|90.7|23.1|42.8|
|Liberia (2007, poverty at 63.8%)*|13.2|84.9|22.3|41.2|
|Mali (2006, poverty at 47.5%|7.2|95.1|11.1|25.1|
|Niger (2005, poverty at 62.1%)*|4.4|54.7|14.8|31.4|
|Nigeria (2004, poverty at 54.7%)|4.1|73.4|14.0|30.2|
|Senegal (2006, poverty at 50.8%)|6.8|96.3|28.0|47.9|
|Sierra Leone (2003, poverty at 66.4%)|11.7|96.4|32.0|53.9|
|Togo (2006, poverty at 61.6%)|3.5|92.2|23.0|40.4|

Source: Wodon et al. (2008b). The date in parenthesis for each country refers to the household survey year.

Thus, while reducing taxes is one of the first actions that governments are considering to reduce the impact on the poor of rising food prices in sub-Saharan Africa, this measure suffers from several weaknesses. First, it is costly in budgetary terms. For instance the reduction in import tariffs on rice imports in Guinea-Bissau is estimated to cost about 7% of tax revenues worsening an already tight fiscal balance. Second, there is no guarantee that the tax cuts will end up reducing the market prices of the goods targeted, particularly in markets dominated by a few traders. Third, for many food items, even if there is a one-to-one relationship between taxes and market prices, much of the benefit of the tax cuts will accrue to the non-poor. Fourth, compared to reducing VAT or a sales tax, lowering import tariffs may well hurt domestic producers in the short run, and in some circumstances reducing import tariffs may increase poverty (Makdissi and Wodon 2008a). Hence the decision to reduce tariffs should balance the benefits which the poor are likely to accrue and political economy gains, with the costs outlined here.

# **_3.3. Safety Net Programs – Food Aid and School Feeding_**

Alternatives to economy-wide policies such as indirect tax cuts consists in implementing new social protection programs and safety nets, or expanding existing ones. In their comprehensive review of the targeting performance of a wide range of safety nets, Coady et al. (2003) suggest that food subsidies tend to be less well targeted than other programs. As discussed in World Bank (2008b), direct transfers in cash or in kind, whether through proxy-means testing programs or public works for example, tend to have better outcomes. It is unclear however whether broad assessments of the targeting performance of alternative mechanisms of social protection are necessarily valid for sub-Saharan Africa since few of the case studies analyzed in existing reviews of social protection programs tend belong to the region.

In this section and the next, three types of food-based safety nets are considered: food aid as typically distributed by the World Food Program (WFP), school feeding programs, and labor intensive public works which often are based in part on food for work systems (but may also provide benefits in cash