Public spending on agriculture in southern Africa: sectoral and intra-sectoral impact and policy implications

Abstract

The purpose of this paper is two-fold: firstly, it examines the relationship between public agriculture expenditure and agriculture sector growth, and secondly, it examines the heterogeneous effects of expenditure on agriculture growth depending on which subsectors within agriculture receive the investments. The co-integration analysis results offer insights into a number of issues: (i) it is found that agricultural expenditures are important for agriculture sector growth in Malawi, Eswatini (Swaziland) and Zambia and (ii) that within the agricultural sectors, investing in research and development, subsidies, and in neglected areas (livestock, fisheries) alongside crops can expand the agricultural sector more. Policy makers should increase public spending in agriculture but should also emphasize on improving intra-sectoral allocations, targeting areas that create sectoral growth.