Macroeconomic drivers of agricultural total factor productivity in Africa: an empirical analysis of fertilizer use and socio-economic factors
Mehdi Seraj, Levi Mbaka Matimbia, Hüseyin ÖzdeşerPurpose
This study investigates the macroeconomic determinants of agricultural total factor productivity (ATFP), specifically inorganic fertilizer consumption (as a proxy for agricultural input intensity and indirect soil health dynamics), foreign direct investment (FDI), human development, agricultural employment and carbon dioxide (CO2) emissions, across the 10 African nations with the highest levels of agricultural employment.
Design/methodology/approach
Utilizing panel data spanning 2000–2022, the study employs Driscoll–Kraay standard errors and feasible generalized least squares (FGLS) estimators to account for cross-sectional dependence, slope heterogeneity and heteroskedasticity.
Findings
In the primary Driscoll–Kraay specification, FER and CO2 have negative coefficients, but those coefficients are not statistically significant at conventional levels; thus, we interpret these findings in a cautious and suggestive manner. Conversely, FDI and human development index (HDI) exert statistically significant positive impacts on productivity. Agricultural employment also correlates positively with ATFP under current labor-intensive farming regimes. Furthermore, spectral Granger causality confirms that FDI and HDI govern productivity across short-, medium- and long-term horizons, whereas labor and climate factors predominantly exhibit longer-term causal signals.
Research limitations/implications
While this macro-level panel analysis provides a comprehensive overview, it does not fully capture the extensive heterogeneity in local soil, farming practices and socio-cultural contexts across the 10 countries.
Originality/value
This research proposes a strategy for transitioning from labor-intensive subsistence farming toward sustainable, technology-fostered intensification tailored to the needs of Africa's largest agricultural employers.