Abstract
The focus of this thesis is on agricultural trade liberalisation, agricultural total factor productivity (TFP) growth, and food security in Africa. The motivation of the study emanates from the paradox of increasing agricultural trade, falling agricultural TFP, and deteriorating food insecurity. The thesis is comprised of four essays, covered in chapters two to five, each providing a distinct contribution. Chapter one and six introduces and concludes the thesis. Chapter two examines the impact of agricultural trade liberalisation on agricultural technical efficiency. The examination is borne out of the realisation that despite increased agricultural trade liberalisation, high agricultural productive inefficiency has kept Africa as a net food importer. Studies have focused on the trade liberalisation-productivity growth nexus and overlooked the efficiency linkage. Also, the role of regional trade agreements (RTAs) and institutions in reducing agricultural inefficiency have been sidelined. A stochastic-frontier approach and a single-stage maximum likelihood estimation (MLE) of a True Fixed Effects panel data model were used for analysis. Using maize and rice data from 13 African countries for the period 2005-2016, the evidence shows that through technology-transfer, agricultural trade statistically improves technical efficiency. Moreover, the results suggest that RTAs provide favorable effects which vary across products and membership. Furthermore, while regulatory quality was found to reduce technical inefficiency, ironically, control of corruption increases it. The findings call for increased agricultural trade liberalisation provisions in RTAs. This should be complemented by further strengthening of institutions involved in the agriculture value chain. Chapter three assesses the impact of agricultural trade liberalisation on agricultural TFP growth in Africa using maize and rice data for the 13 countries from 2005-2016. The chapter makes two contributions. Firstly, it analyses the impact of domestic agriculture support in the spirit of the Agreement on Agriculture. Secondly, it draws attention to the South-South versus South-North debate in the agriculture sector. Trade impact is analysed by source, split between intra and extra Africa. TFP growth for maize and rice are computed using the Malmquist-DEA approach. The dynamic fixed-effects approach to panel auto-regressive-distributed-lag model estimation was employed for analysis. TFP computations show falling growth rates for both maize and rice. The evidence suggests that domestic agriculture support measures have positive output-effects but negative productivity-effects. The findings also reveal that reducing trade-distorting agriculture support coupled with good governance significantly increases TFP iii growth. Accordingly, an appeal that domestic agriculture support is refocused from producer payments to infrastructure development is made. Furthermore, results establish that South-South trade productivity gains match, and can surpass South-North Trade. Hence, emphasis should be on increasing intra-Africa agriculture trade. The fourth chapter recognises the connection between income inequality, and food security. Reducing income inequality in Africa rests on agricultural TFP growth convergence which in turn hugely depends on agricultural trade. Therefore, the chapter investigates the impact of agricultural trade liberalisation on agricultural TFP growth convergence. Trade is analysed by origin and is disaggregated into intra and extra Africa trade. Also, the chapter acknowledges the uniqueness of agricultural trade liberalisation and analyses the effect of the removal of trade-distorting agriculture support. The feasible-generalised-feast-squares (FGLS) estimation of panel data models derived from Barro and Sala-i-Martin (1990) was applied on maize and rice data for the period 2005-2016. The results confirm both absolute and conditional convergence, which is stronger for maize. Moreover, agricultural trade openness speeds up TFP growth convergence for both crops. The speed is higher for intra-Africa trade. Furthermore, reduction of support beyond distortion-free levels was found to enhance TFP growth convergence. The findings provide a case for more agricultural trade liberalisation, particularly intra-Africa. The appeal here is that the recently established Africa Continental Free Trade Area prioritises intra-Africa agricultural trade and further elimination of trade-distorting domestic agriculture support. Chapter five draws inference on the impact of agricultural trade openness, aggregate agricultural total factor productivity (TFP) growth, and aggregate domestic agriculture support on food security in Africa. To retain estimate efficiency and consistency in the presence of complex error terms, the study employed the Panel-Corrected-Standard-Error (PCSE) estimator on panel data spanning 2005-2016 for 13 African countries. The results suggest that agricultural trade liberalisation and TFP have significant and favourable effects. Moreover, we find that reducing agricultural support beyond distortion-free levels enhances food security. Further to trade openness, we call for export growth-oriented domestic support anchored on agricultural human-capital development, innovation, and research and development.
Ph.D. (Economics)