Browsing by Author "Jambo, Newettie"

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    The impact of government spending on agricultural growth: a case of Zambia, Malawi, South Africa and Tanzania
    (Stellenbosch : Stellenbosch University, 2017-03) Jambo, Newettie; Traub, Lulama; Stellenbosch University. Faculty of AgriSciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY : The objective of this study is to determine the component of public expenditure that is more growth enhancing for the agricultural sector. In order to address this objective, an analysis is conducted on government spending, disaggregated by expenditure categories for Zambia, Malawi, South Africa and Tanzania between 2000 and 2014. The vector error correction model (VECM) is used to test the impact of public expenditure, private investment and net trade on agricultural GDP growth. The results from the empirical analysis reveal that agricultural growth responds differently to the agricultural spending types across the countries. In Zambia, the bulk of public expenditure goes to support the input subsidy programs (ISPs) and price support programs (PSPs). However, the empirical analysis indicated that infrastructure development, which only received third priority, was more growth enhancing among the spending types. Results also suggested a negative relationship between agricultural growth and expenditures on ISPs, PSPs and agricultural research in Zambia. In the case of Malawi, the results of the empirical analysis indicated that spending on agricultural research has a higher impact on growth, and unlike Zambia there is evidence of a positive relationship between agricultural growth and spending on PSPs. While infrastructure development in Tanzania received the bulk of the budget, the regression results indicated a negative relationship between spending on infrastructure and long-run economic growth. In contrast, South Africa allocates public expenditure to spending categories with the highest returns. For instance, priority is given to agricultural research in South Africa. Given the study results, there is a need to re-direct public investments in favor of growth-enhancing expenditure categories. The recommendation is for governments to shift their spending priorities and focus more on areas that stimulate growth to the sector. More efficient targeting of public investments by the governments stimulate growth in the agricultural sector and ultimately reduce poverty and hunger within the sub-Saharan region. This information is also vital to various international bodies including African Union (AU) and United Nations (UN) aiming to achieve goals like the Malabo declaration by 2025 and Sustainable development goals (SDGs) by 2030, respectively.