Complying with the Maputo Declaration target:
Trends in public agricultural expenditures and implications for pursuit of optimal allocation of
public agricultural spending
Godfrey Bahiigwa and Sam Benin, IFPRI
ReSAKSS Conference
Dakar, Senegal12-13 November 2013
Background and Motivation In 2003, African governments adopted the Comprehensive Africa
Agriculture Development Programme (CAADP) with two key targets» Achieve 6% ag GDP growth rate per year» Spend 10% of national expenditure on agriculture – Maputo
Declaration
Public spending (fiscal policy in general) in agriculture is a key instrument for most developing country governments to achieve national development objectives:» Most of the poor work in the agriculture sector and in rural areas» Sector employs 65% of the labor force and accounts for 32% of
GDP» Evidence that public agriculture investment (particularly in R&D)
has large poverty-reducing effects» Experience of Green Revolution (especially India and China)
Objectives and outline of presentation
Present patterns and trends in public agricultural expenditure (PAE) in Africa
Assess progress in achieving the Maputo Declaration target of spending 10% of national expenditures in the agriculture sector
Draw implications of the Declaration on spending behavior and optimal PAE allocation
Assess PAE data requirements for the joint agriculture sector reviews (JSRs)
Progress at the Africa-wide level, 1995-2010
Share of public agriculture expenditure (PAE) in total expenditures for Africa as a whole declined in 2003-09 (post CAADP) compared to 1995-2003 (pre-CAADP)
Differences across different regions and countries
CA EA NA SA WAAfrica Region
0
2
4
6
8
10 1995-2003
2003-2009
Per
cen
t
Progress in Central Africa, 2003-10
Shares increased in Burundi, Rep of Congo, and São Tomé and Principe
Shares declined or stagnated in other countries, which already spend less than 5%
Bur
undi
Cam
eroo
n
Cen
tral
Af.
..
Cha
d
Con
go, D
e...
Con
go, R
ep.
Equ
ator
ial.
..
Sao
Tom
e ...
0
5
10
15 Central AfricaP
erce
nt
Progress in East Africa, 2003-10
Many countries in East Africa spend 5-10% percent of total expenditure on agriculture
Shares have increased over time in several countries (especially Ethiopia, Rwanda, Sudan)
Dji
bout
i
Eth
iopi
a
Ken
ya
Mad
agas
car
Mau
riti
us
Rw
anda
Sey
chel
les
Sou
th S
udan
Sud
an
Tan
zani
a
Uga
nda0
510152025
East AfricaP
erce
nt
Shares have stagnated in Mauritania and diverged downwards from the 10% target in the other countries
Alg
eria
Egy
pt
Mau
rita
nia
Mor
occo
Tun
isia
0
5
10
15North AfricaP
erce
nt
Progress in North Africa, 2003-10
Malawi is an outstanding performer, with nearly three times the target share in recent times
Apart from Zambia, shares have stagnated or declined in the other countries
Ang
ola
Bot
swan
a
Les
otho
Mal
awi
Moz
ambi
que
Nam
ibia
Sou
th A
fric
a
Sw
azil
and
Zam
bia
Zim
babw
e05
1015202530
Southern Africa
Per
cen
t
Progress in Southern Africa, 2003-10
Region where many countries have achieved target Shares have increased in many countries Burkina Faso and Mali (and Niger in recent times) have
consistently cut back on the shares to the target level
Bur
kina
Fas
o
Cap
e V
erde
Cot
e d'
Ivoi
re
Gam
bia
Gha
na
Gui
nea
Gui
nea-
Bi.
..
Lib
eria
Mal
i
Nig
er
Nig
eria
Sen
egal
Sie
rra
Leo
ne
Tog
o0
10
20
West AfricaP
erce
nt
Progress in West Africa, 2003-10
Summary of progress: and key questions (I)
Since 2003 when the declaration was made » only 13 countries have surpassed the target in any
year—Burundi, Burkina Faso, Republic of Congo, Ethiopia, Ghana, Guinea, Madagascar, Malawi, Mali, Niger, Senegal, Zambia, and Zimbabwe
» only 7 have surpassed it in many years
Where the shares have been increasing or are high:» Especially among countries in east and west Africa, is it
because they have observed positive returns or because they think the 10% is optimal?
Where the shares have been declining:» Especially in Burkina Faso, Mali and Niger where the
shares were higher than 10%, is it because they are not getting the expected returns?
» For middle income countries with other sources of growth and development (esp. in north and southern Africa), is it because the return from additional spending in agriculture is lower than in the other sectors?
Where the shares have stagnated: » Is it because they have reached equilibrium, where
returns from additional spending in agriculture and non-agriculture are equal?
These questions reflect the issue of the composition of public agriculture expenditure (PAE):» Role of government: large variation over time reflects
changing involvement of government in the sector» Accounting problem: PAE depends of how PAE is
accounted for and reported in different countries
Summary of progress: and key questions (II)
PAE trends reflect changing role of state (I)PAE as percent of total expenditure
1980 1985 1990 1995 2000Botswana 9.7 9.8 6.5 6.0 4.2Egypt 4.4 4.2 5.4 5.0 6.8Ethiopia 6.9 9.9 6.9 9.1 10.4Ghana 12.2 6.2 6.1 5.1 3.2Kenya 8.4 10.4 6.0 5.5 6.8Malawi 10.2 8.4 11.1 11.1 8.8Morocco 6.5 5.0 5.0 4.2 3.5Tunisia 14.5 8.3 8.5 8.3 9.3Uganda 32.5 3.9 2.2 2.9 2.6Zambia 13.4 10.7 5.6 2.5 2.1
Compared to pre-structural adjustment periods, share of PAE has declined substantially. Governments were directly involved in agriculture production, cooperatives, marketing boards, etc.
PAE trends reflect changing role of state (II)
1980
1985
1990
1995
2000
2005
2010
1980
1985
1990
1995
2000
2005
2010
Ghana Zambia
-1
4
9
14
% o
f to
tal
exp
end
i-tu
re
New form of direct governmental involvement in the sector in recent times in form of heavy farm support subsidies
Issue is extent to which these programs have been refurbished to take account of their negative experiences in the past
Accounting/Composition of PAE: Case of Ghana
Accounting changed over time. Is it merely to show compliance with CAADP target? Or is effectiveness of portfolio considered?
Also reflects changing role of MDAs in the sector
2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
2
4
6
8
10
12 Feeder roads
Debt service
PSI
Cocoa
Research
Fisheries
Forestry
Crops & livestock
Perc
ent o
f tot
al e
xpen
ditu
re
How has PAE been allocated?
by sub-sector
by current and investment spending
by function
PAE by subsector, annual average 2003–2007
Expenditures on crops and livestock dominate PAE. Share of PAE on forestry is higher in the central and eastern African
countries; not surprising, given dominance of forests there. Share on fisheries is higher in island countries and countries with large
coastlines.
Cong
o, R
ep.
CAR
Cong
o, D
. R.
S. T
. & P
rinBu
rund
iCh
adD
jibou
tiSe
yche
lles
Uga
nda
Mad
agas
car
Tanz
ania
Nam
ibia
Mal
awi
Zam
bia
Leso
tho
Swaz
iland
Sene
gal
Togo
Cote
d'Iv
oire
Sier
ra L
eone
Mal
i
Central Eastern Southern Western
0%25%50%75%
100%
Fishery Forestry Crops and livestock
Perc
ent o
f PAE
PAE by current and investment spending, annual average 2003–2007
Wide variation in share of PAE for investments—6% in Seychelles to 88% percent in Madagascar.
Artifact of how different countries classify current expenditures and investments. In many countries, all of the expenditures financed by donors are classified as investment irrespective of what they are actually spent on.
Chad
Cong
o, R
ep.
CAR
Cong
o, D
. R.
Buru
ndi
S. T
. & P
rinSe
yche
lles
Tanz
ania
Djib
outi
Uga
nda
Mad
agas
car
Nam
ibia
Mal
awi
Swaz
iland
Leso
tho
Zam
bia
Sier
ra L
eone
Cote
d'Iv
oire
Togo
Sene
gal
Mal
i
Central Eastern Southern Western
0%
50%
100%
Current Capital
Perc
ent o
f PAE
PAE by function, annual average 2006–2010
Bulk of annual PAE was spent on subsidies. Share of PAE on research was moderate, at about 10–15 percent,
although it was relatively low in Mali, at about 5 percent. Overall, the functional distribution of PAE seems to be more balanced in
Mali compared to the other four countries.
0%
20%
40%
60%
80%
100%Other
Inspection
Marketing, storage, and public stockholding
Feeder roads and other infrastructure
Irrigation
Extension, training, technical as-sistance
Research
Subsidies
Perc
ent o
f PAE
How has PAE trends contributed to growth?
Used simple correlations to assess co-trends between PAE and agricultural GDP growth rate
Results do not imply cause-effect relationships, which require detailed PAE and other data and advanced quantitative methods beyond the scope of this report
PAE and agGDP growth: Africa-wide
0 2 4 6 8 10 12 14 16 18 20
-15
-10
-5
0
5
10
15
20
f(x) = 0.152130393953939 x + 1.65002381628054R² = 0.0178841231285043
PAE (% of total expenditures)
agG
DP
gro
wth
rat
e (%
)
-20 -10 0 10 20 30 40
-15
-10
-5
0
5
10
15
20
f(x) = 0.0952498009220817 x + 1.70527465405226R² = 0.0644324268719985
PAE growth rate (%)
agG
DP
gro
wth
rat
e (%
)
Positive correlation between PAE and agGDP growth;
Different results for different regions, with largest correlations in east Africa, which is a top performer in both indicators of PAE
Low significance using aggregate PAE points to the importance of composition of PAE
-20 -15 -10 -5 0 5 10 15 20-5
0
5
10
f(x) = 0.0478456700137788 x + 2.67348731247432R² = 0.0150199687452059
West: Lag 3 years
agR&Dexp growth rate (%)
agG
DP
gro
wth
ra
te (
%)
-30 -20 -10 0 10 20 30
-5
0
5
10
f(x) = 0.0826292689842183 x + 2.76599612010094R² = 0.129578814302894
West: Lag 6 years
agR&Dexp growth rate (%)
agG
DP
gro
wth
ra
te (
%)
-40 -30 -20 -10 0 10 20 30-5
0
5
10
f(x) = 0.148652394727877 x + 0.707175149604037R² = 0.445503708349219
West: Lag 9 years
agR&Dexp growth rate (%)
agG
DP
gro
wth
ra
te (
%)
agR&D exp and agGDP growth: west Africa
Correlation is weak when the data for all countries are pooled in a single estimation for Africa
Results uphold common knowledge that agR&D investments take time to manifest
Results (magnitude of correlation, lags, and statistical significance) are different for different regions
PAE data challenges and requirements for JSRs To answer the questions posed earlier in a
comprehensive manner is very challenging; it is virtually impossible with existing data for many countries
Some analysis on the efficiency and effectiveness of PAE exists in a handful of countries only
We are faced with PAE measurement problems» Most of data are at higher aggregate level» Data systems reflect outlays associated with
organizational structures of governments rather than objectives sought and functions performed
» Several PAE undertaken outside traditional ag MDAs
We need to do better data collection and management for successful JSRs
NAIPs and implications for PAE data and analysis
NAIP budget allocated:» Objectives and
programs» Sub-sector» Commodity and
commodity groups» Economic use and
functions» Target population» Sources of financing
Need PAE data accordingly: for review, learning, and further planning
% of NAIP budget by top 3 objectives/programs Be
nin,
201
0-20
15Bu
rkin
a Fa
so, 2
011-
...Bu
rund
i, 20
12-2
017
Cote
d'Iv
oire
, 201
0-...
Ethi
opia
, 201
0-20
20G
ambi
a, 2
011-
2015
Gha
na, 2
011-
2015
Keny
a, 2
010-
2015
Libe
ria, 2
011-
2015
Mal
awi,
2011
-201
4N
iger
, 201
0-20
12N
iger
ia, 2
011-
2014
Rwan
da, 2
009-
2012
Sene
gal,
2011
-201
5Si
erra
Leo
ne, 2
010-
2014
Tanz
ania
, 201
2-20
16To
go, 2
010-
2015
Uga
nda,
201
1-20
15
0
25
50
75
100Enabling En-vironment
Science&Tech
NRM
Markets
Productivity
Food Security
Food and nutrition security and increasing productivity dominate planned expenditures in many countries
Improving markets and sustainable NRM also take a large share
Benin, 2010-15
Burkina Faso,
2011-15
Cote d’Ivoire, 2010-15
Liberia, 2011-15
Mali, 2011-15
Senegal, 2010-15
Togo, 2010-15
0
25
50
75
100
Forestry
Fishery
Livestock
Crops
% of NAIP budget by sub-sector
Very few NAIPs had a breakdown by subsector, which is surprising given that PAE is typically reported by subsector
In general, crops subsector dominates; share of other subsectors depends on country context
% of NAIP budget by major commodities
All the NAIPs identified specific commodities to lead overall agricultural growth and development. Only few had specific budget allocations. Maize and rice received the largest shares
Country, plan duration Commodities and budget allocation
Benin, 2010-15 Rice=24.9%, Corn=18.7%, Pineapple=4.2%, Vegetables=4.1%
Gambia, 2011-15 Rice=20.1%Malawi, 2011-14 Maize=37.2%
Mali, 2011-15 Rice=30.1%, Corn=12.7%, Millet/Sorghum=7.2%
Nigeria, 2011-14 Cash crops=13%, Rice=2.8%
Senegal, 2010-15 Groundnut=8.9%, Maize=8.6%, Sorghum=4.5%, Cowpea=3.8%, Rice=1.4%
Ben
in, 2
010-
2015
Bur
kina
Fas
o, 2
011.
..
Bur
undi
, 201
2-20
17
Cot
e d'
Ivoi
re, 2
010.
..
Eth
iopi
a, 2
010-
2020
Gam
bia,
201
1-20
15
Gha
na, 2
011-
2015
Ken
ya, 2
010-
2015
Lib
eria
, 201
1-20
15
Mal
awi,
2011
-201
4
Mal
i, 20
11-2
015
Nig
er, 2
010-
2012
Nig
eria
, 201
1-20
14
Rw
anda
, 200
9-20
12
Sene
gal,
2011
-201
5
Sier
ra L
eone
, 201
0...
Tan
zani
a, 2
012-
2016
Tog
o, 2
010-
2015
Uga
nda,
201
1-20
15
0
20
40
60
80
100
Farm Support and Subsidies
NRM
Irrigation
Extension
Research
% of NAIP budget by function
NRM and farm support and subsidies dominate planned expenditures, followed by irrigation
Research and extension are stated priorities with specific budget allocations in a few countries only
Country, plan duration Target population and budget allocation
Liberia, 2011-15 Women and youth=4.8%
Nigeria, 2011-14 Smallholder farmers=35.5%, Commercial farmers=9.6%
Senegal, 2010-15 Youth=48.8%, Men and women=40.3%, Women=0.6%, Men=0.2%
Tanzania, 2012-16 Mainland=92.6%, Zanzibar=7.4%
Uganda, 2011-15 Northern region=2.4%
% of NAIP budget by target population
Very few NAIPs had a breakdown of the budget by target population, even though targeting and different target groups were discussed in all of them
Benin, 2010-15Ethiopia, 2010-20Gambia, 2011-15
Ghana, 2011-15Kenya, 2010-15
Liberia, 2011-15Malawi, 2011-14
Niger, 2010-12Rwanda, 2009-12Senegal, 2011-15
Togo, 2010-15
0% 20% 40% 60% 80% 100%
Government Development partners Others Funding gap
% of NAIP budget by source of funding
Dependence on external sources for financing the NAIPs Only in a couple of countries is government financing at least 50% More than 50% financing gaps in Benin, Gambia, Ghana, Senegal, Togo
Conclusions and Implications (I)
The amount of PAE in Africa as a whole increased rapidly, but at a slower pace than the growth in total expenditures resulting in a decline in the share of PAE in total expenditures for Africa as a whole
Some governments’ reports on compliance with the Maputo Declaration have generated controversy on what to count as PAE» resulting in a debate that may be polarizing behavior
around the fundamental issue of the investments needed to achieve development results
» i.e. what types of investment, how much of each type of investment, where should they be invested, and when should they be invested
Conclusions and Implications (II)
Prioritization of investments has to be based on analysis of the efficiency and effectiveness of different types of public spending. Therefore, disaggregation of public expenditure data by type, across space, and over time is critical.
» Need public expenditure accounting and reporting systems with unique codes or identifiers that also reflect the objectives and functions that the outlays are undertaken for (Kenya’s Open data on public expenditure is a very good example).
» This is important for review of the NAIPs (as in JSRs)» Will enhance the political accountability of government
to its citizens
Thank You
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