FOREIGN DIRECT INVESTMENT, AGRICULTURAL PRODUCTIVITY AND FOOD SECURITY IN SUB-SAHARAN AFRICA

Abstract

This study examines the impact of foreign direct investment in agricultural productivity on food se­curity in sub-Saharan Africa covering the period 2010-2020. The data were obtained from World Bank World Development Indicators, United Nations Food and Agricultural Organization and United Nations Conference on Trade and Development. The technique used for data analysis is System Generalized Meth­od of Moment. The results of Arrelano-Bond tests show no autocorrelation. The estimated GMM-SYS results show that foreign direct investment in agriculture is positive and statistically significant in influencing food security variables including food consumption score (with the coefficient of 0.042) and dietary energy consumption (with the coefficient of 0.317). The control variables like crop production, food exports, age dependency and rural population are significant determinants of food consumption score. Also, GDP per capita, crop production, age dependency and rural population are significant factors influencing dietary energy consumption in Sub-Saharan Africa. Based on the findings of the study, there is need for regional governments to ensure tenure reforms by formalization of customary rights to enhance tenure security for a more equitable access to land. It is also essential that proper monitoring and impact assessment systems are developed to ensure transparency of the processes associated with agricultural investments. Furthermore, countries with currently high foreign direct investment transaction costs or that have a generally less conducive investment environment can improve agriculture by eliminating these obstacles.