Effects of public expenditure for agriculture on food security in Africa

Abstract The commitments of Malabo provide for African countries to devote at least ten percent of their public expenditure to agriculture, with the aim of ending hunger by 2025, in line with the Agenda 2063. While evidence on welfare effects of public expenditure for agriculture is huge, this particular indicator, i.e., the percentage of public expenditure devoted to agriculture, was only recently considered by empirical literature. Based on panel data from African countries between 2002 and 2019 and IV approach to address reverse causality, the study finds significant effect of the Malabo indicator on food security, particularly when allocation of budget to agriculture is coupled with good governance. Through in-sample estimates, the study also finds that the target of ten percent is reasonable, because it roughly corresponds to zero hunger. Finally, an analysis of the transmission mechanisms between public expenditure for agriculture and food security is performed and it confirms the role of growth and agricultural intensification in this relationship but questions its centrality.