Appraising the spillover effect of water use efficiency indicators in sub- Saharan Africa: A spatial econometric approach

Abstract

The aim of this research is to examine the trend of water use efficiency (WUE) and the spillover effect of its determinants in 28 sub-Saharan Africa (SSA) countries over the period 2007 to 2018 using the directional distance function (DDF) and the spatial Durbin model. Results of the DDF revealed that the most efficient countries include Botswana, and Liberia whereas countries with poor performance include Niger and South Africa. Also, the average efficiency scores over the study period improved steadily from 0.582 in 2007 to 0.698 in 2018. The study showed that under economic distance weight in the spatial Durbin model, the values of the spatial lag coefficients of urbanisation (URB), export (EX), and education (EDU) depict positive and statistically significant effects on WUE, while industrial activities (IND), foreign direct investment (FDI), and government interference (COR) had an adverse influence on WUE in SSA. Results of the spatial decomposition effect of URB demonstrated a major impact on WUE in both the local and adjacent countries. However, a significant decline of WUE through the direct and indirect impacts of FDI, EX, and COR in the local and neighboring countries was recorded which indicate the presence of a negative spatial dependency on WUE in SSA. The outcome of this study implies that policymakers in SSA countries must strengthen sustainable water resources management decisions with neighbouring countries to achieve sustainable development goal 6 by 2030 and beyond.