Water Use and Agricultural Productivity Growth in Sub-Saharan Africa

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Yannick, Djoumessi Fosso
Bergaly, Kamdem Cyrille Bergaly
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African Economic Research Consortium
Today, we are confronted with one of the greatest challenges of the 21st century: meeting the increasing needs of the population while reducing the damage caused by agriculture to the natural resources, namely water and land. Water is a complex resource, unlike a stable resource over human lifetime, such as land. To date, the empirical literature on the estimation of productivity in agriculture has disregarded water as an input. Given that it constitutes a necessary input, then its efficient use becomes a prerequisite condition. The main objective of this study was to investigate productivity growth in agriculture in sub-Saharan Africa, taking into account water as an input. The true-random Stochastic Production Frontier (SPF) was used to estimate the agricultural production function incorporating water as an input and to derive the total factor productivity (TFP) using a sample of 19 countries for the period 1991–2014. The results of the SFA model showed that the classical coefficients of the production function, including water endowment as an input, have a significant and positive impact on agricultural production growth after correction for the potential endogeneity bias. The average growth rate of TFP taking into account water as an input was estimated at 0.045% per year for the full sample period, a figure considerably lower than classical TFP estimated at an average rate of 1% per year. For the period 1991–2001, the rate was negative and estimated at -0.44% and 0.36% for the period 2002–2012. The higher performance in 2002–2012 may be due to the significant adoption of good agricultural practices along with technological advances that allowed for saving water (between -0.08% and -0.05% on average per year). Therefore it would be advisable to focus more on good practices in water saving, which are key to efficient use of water in agriculture.