MACROECONOMIC DYNAMICS AND AGRICULTURAL SECTOR PERFORMANCE: A COMPARATIVE ANALYSIS OF SELECTED ECONOMIES IN AFRICA

Abstract

Agriculture is critical to numerous economies, particularly in Sub-Saharan Africa (SSA). It is essential for the socio-economic advancement of many countries due to its capacity to employ a significant portion of the population and its substantial contribution to national development. Despite its significant contribution to the economy of SSA, the performance of the agricultural sector has been poor in recent years, making it difficult for SSA nations to produce sufficient food needed for food security. Hence, this study investigated the impact of macroeconomic factors on agrarian output in selected African economies. The data for this study are secondary and were sourced from the World Development Indicator databases, covering the period from 2000 to 2023. The research utilised Least Square and the Dumitrescu and Hurlin Panel Causality Tests as estimation techniques. Findings indicated a positive and significant relationship between macroeconomic indicators like exchange rate, bank credit and FDI and agricultural output in the selected countries. Also, results showed a unidirectional causality between macroeconomic factors and agricultural output in the selected countries. Therefore, the study concluded that macroeconomic indicators like foreign direct investment, interest rates, exchange rates, and banking credit significantly impact agricultural output in emerging African economies. Consequently, the study recommended that governments in the selected countries should further strengthen and enhance the various components of macroeconomic conditions due to their significant impact on agricultural outputs in the selected economies.