Role of Public Agriculture Spending on Performance in sub-Saharan Africa: A Channel-Based Analyses

Abstract

African heads of state have made several commitments to make the functioning of the agriculture sector sustainable. The two most prominent of these commitments are the Maputo and Malabo declarations. The Maputo declaration stated that country should allocate at least 10 percent of the total fiscal expenditure so as to attain 6 percent agricultural growth. This study investigates the effects of public agriculture spending on agricultural output. This was conducted through the effective quality channels of public agriculture spending such as credit budget channel, research budget channel, fertilizer consumption channel and energy budget channel in sub-Saharan Africa. The study was essential has very limited studies have examined the effects of agriculture public spending to feeding sub-Saharan Africa. The paper adopted the system generalized method of moment to control for endogeneity, simultaneity, and reverse causality. The findings show that public spending enhances agriculture performance to feed SSA without considering the effects of identified channels, however this relationship is weak. The paper concludes that private subsidization of fertilizer should not be the major priority of the SSA governments; but the more essential agricultural sector policies should focus on: providing infrastructures such as energy railing, connecting road networks; and research and development.