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Greening Africa: Public Expenditure for Agriculture

Explore the trends and determinants of public expenditure for agriculture in Africa, focusing on the CAADP pledge. Analyze the impact of governance, ODA, GDP, and other factors on agricultural spending.

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Greening Africa: Public Expenditure for Agriculture

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  1. Greening Africa: Public Expenditure for Agriculture Fosu@wider.unu.edu Augustin K. FOSU UN University-WIDERand University of Ghana-Legon African Economic Conference (AEC) Addis Ababa 25-28 October 2011

  2. Outline Introduction Money matters for greening Africa: The CAADP 10 % pledge Trends in public expenditure on agriculture, by region % of agricultural GDP In 2000 int’l $ Trends in public expenditure composition: SSA and Africa Expenditure share for agriculture by African country Determinants of the agriculture expenditure share: a review and some current results Conclusion Fosu@wider.unu.edu

  3. Introduction Money matters for greening Africa: The CAADP 10 % pledge Is the pledge being fulfilled? Is the pledge likely to be fulfilled? Fosu@wider.unu.edu

  4. Trends in public expenditure for agriculture (% agric GDP), by major global region Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues) Fosu@wider.unu.edu

  5. Trends in public expenditure for agriculture (% of agric. GDP), SSA vs. NA Source: Fan. S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues) Fosu@wider.unu.edu

  6. Trends in public expenditure for agriculture, SSA & NA (2000 international dollars, bils.) Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues) Fosu@wider.unu.edu

  7. Trends in public expenditure composition (%): SSAand Africa Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues) Note: T & C = Transport and Communications Fosu@wider.unu.edu

  8. Trends in agric’s public expenditure share (%): SSAand Africa Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues) Fosu@wider.unu.edu

  9. % Agricpub. expend. share by African country Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues). Note: 2005 is latest year with near-complete data. Fosu@wider.unu.edu

  10. % Agric pub. expend. share, ctryordering Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues). Note: 2005 is latest year with near-complete data. Fosu@wider.unu.edu

  11. % change, agricpub. expend. share, ctryordering Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats. Yearbook (various issues). Note: 2005 is latest year with near-complete data. Fosu@wider.unu.edu

  12. African countries meeting the CAADP 10% target (source: see above) Fosu@wider.unu.edu Burkina Faso (20.4%, 2006) Ethiopia (13.7%, 2005) Chad? (9.7%, 2004) Ghana (10.3%, 2008) Guinea (14.0%, 2004) Malawi (12.2%, 2007) Mali (11.0%, 2007) Niger (15.1%, 2006) Senegal (13.9%, 2008)

  13. Determinants of agricpublic expenditure share – Existing literature Fosu@wider.unu.edu • SAP decreased the agricexpenditure share (Fan & Saurkar (?) and Fan &Rao (2003); also above graphs show declines during 1980-2000) • Note: Agric spending increased in real $ even during the SAP period (see above graph). • Fosu (2010, AfDR) from AEC!: 1975-94 sample • PCGNP had a weak negative effect on the agric expenditure share, GEAG • ODA’s effect was positive but insignificant • Most importantly, XCONST had a strongly positive effect on GEAG

  14. Determinants of agricpublic expenditure share – Current regression results for 2003-08 Fosu@wider.unu.edu • ODA has a positive effect on GEAG • The following variables have negative effects: • Debt service rate (DSR) • Rural population share (RURPOP) • Per capita GDP (PCGDP) • and very surprisingly XCONST (perhaps due to strong executive branches being better able to adjust the budget to meet the requirements of the CAADP).

  15. Conclusions Fosu@wider.unu.edu Strong resurgence of public agricultural spending since 2000, perhaps due to CAADP, reversing the previous downward trend in the agric share, GEAG Better governance represented by XCONST favored relative agric spending in the past, while the reverse seems to be the case currently following CAADP Rising ODA and falling debt-service favor GEAG, but rising PCGDP and increasing XCONST tend to reduce GEAG for post-CAADP Conjecture: The 10% GEAG target may not be achieved, as XCONSTis likely to increase with improving governance, while PCGDP is likely to rise, neither favoring GEAG (ODA and DSR unlikely to change much; indeed, ODA could fall and DSR rise!)

  16. Thank you! 16 Fosu@wider.unu.edu

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