Public spending would boost agricultural productivity

Reforms in public spending would boost agricultural productivity in sub-Saharan Africa, raising farmers’ incomes, and promoting broader economic growth, according to a study, published by the World Bank in March 2017.

Therefore, the challenge is not only that agricultural public spending in sub-Saharan Africa lags behind other regions. Its impact is also impaired by subsidy programmes and transfers that tend to benefit elites to the detriment of poor people and the agricultural sector itself. Shortcomings in the budgeting processes also reduce spending effectiveness. In light of this scenario, addressing the quality of public spending and the efficiency of resource use becomes even more important than addressing solely the level of spending.

The dividends from investments to strengthen markets, soil and water management, and develop and disseminate improved technologies can be enormous. In addition, improvement of the policy environment through trade and regulatory policy reforms complements spending, by enhancing the incentives for producers and innovators to take advantage of public goods that crowd in private investment.

Improved public spending is only one ingredient of a strategy for agricultural transformation, and must be complemented by a host of additional policies, according to the experts. In a poor policy environment, even spending in areas that otherwise have high returns will be unproductive or counterproductive. The efficient use of public funds has laid the foundation for transformation in other parts of the world, and can play that role in sub-Saharan Africa as well.

(The World Bank/ile)

For more information: Africa Needs to Improve Efficiency of Public Spending to Enhance Agricultural Productivity, Reduce Poverty