Transcript Greening Africa: Public Expenditure for Agriculture

Greening Africa: Public Expenditure for
Agriculture
Augustin K. FOSU
UN University-WIDER
and University of Ghana-Legon
African Economic Conference (AEC)
Addis Ababa
25-28 October 2011
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Outline

Introduction
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Trends in public expenditure on agriculture, by region
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Money matters for greening Africa: The CAADP 10 %
pledge
% 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
2
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Introduction



Money matters for greening Africa: The
CAADP 10 % pledge
Is the pledge being fulfilled?
Is the pledge likely to be fulfilled?
3
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Trends in public expenditure for agriculture
(% agric GDP), by major global region
16
14
12
10
North Africa
SSA
8
ASIA
LAC
6
4
2
0
1980
1990
2000
2005
Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats.
Yearbook (various issues)
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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)
5
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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)
6
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Trends in public expenditure composition (%):
SSA and Africa
25
SSA
AFRICA
20
Agriculture
15
Education
Health
T&C
10
Soc Security
Defense
5
0
1980
1990
2000
2005
1980
1990
2000
2005
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
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Trends in agric’s public expenditure share (%):
SSA and Africa
Source: Fan, S. et al (2009): ReSAKSS WP #28; original data from IMF Gov’t Fin. Stats.
Yearbook (various issues)
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% Agric pub. expend. share by African country
GOVERNMENT EXPENDITURE ON AGRICULTURE AS A
SHARE OF TOTAL EXPENDITURE (%) FOR 2005
20
18
16
14
12
10
8
6
4
2
0
Africa
Africa (based on averages 5.2
of above rates)
Benin
Botswana
Burkina Faso
Burundi
Cameroon
CAR
Chad
DRC
Cote d'Ivoire
Egypt
Ethiopia
Gabon
Gambia
Ghana
Guinea Bissau
Guinea
Kenya
Lesotho
Madagascar
Malawi
Mali
Mauritania
Mauritius
Morocco
Mozambique
Namibia
Niger
Nigeria
Rwanda
Senegal
Sudan
Swaziland
Tanzania
Togo
Tunisia
Uganda
Zambia
Zimbabwe
2005
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.
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% Agric pub. expend. share, ctry ordering
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.
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% change, agric pub. expend. share, ctry ordering
Growth of agric expend. share, 2002-2005 (%)
300.00
250.00
200.00
150.00
100.00
50.00
Niger
Mauritania
Guinea
Guinea Bissau
Gambia
Chad
CAR
Senegal
Sudan
Zambia
Uganda
Burkina Faso
DRC
Ethiopia
Benin
Ghana
Africa
Africa 2
Gabon
Nigeria
Kenya
Malawi
Burundi
Swaziland
Tanzania
Cameroon
Mauritius
Madagascar
Cote d'Ivoire
Mali
Namibia
Zimbabwe
Botswana
Togo
Tunisia
Lesotho
Morocco
Egypt
Rwanda
-50.00
Mozambique
0.00
-100.00
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.
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African countries meeting the CAADP
10% target (source: see above)
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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)
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Senegal (13.9%, 2008)
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Determinants of agric public expenditure
share – Existing literature
SAP decreased the agric expenditure share (Fan
& Saurkar (?) and Fan & Rao (2003); also above
graphs show declines during 1980-2000)
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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
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Determinants of agric public expenditure
share – Current regression results for 2003-08
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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).
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Conclusions
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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 XCONST is 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!)
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Thank you!
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