Effects of environmental quality on agricultural productivity in sub Saharan African countries: A second generation panel based empirical assessment

Abstract

Agriculture is the backbone of most sub-Saharan Africa economies, but environmental quality, so vital for agricultural production, is being challenged by climate change. However, most studies measure environmental quality using one variable, CO₂ emissions. In this study, a more enhanced measure of environmental quality, which incorporates three indicators (per capita CO₂ emissions, energy intensity and adjusted national savings), is used. A set of second-generation panel data techniques that address some potentially crucial panel data estimation issues such as cross sectional dependence and cross country heterogeneity, are employed. Data on 24 sub-Saharan Africa countries over the period 1984 to 2016 were analysed. The impact on agricultural productivity of two of the three indicators of environmental quality, namely CO₂ emissions and adjusted national savings, has expected signs, negative and positive, respectively. Estimates using different methods suggest a detrimental effect of per capita CO₂ emissions on agricultural productivity in sub-Saharan Africa. A 1% rise in per capita CO₂ emissions induces a 0.04% to 0.06% decline in agricultural productivity. Deteriorating environment quality as a result of climate change is slowly but negatively impacting sub-Saharan Africa agricultural productivity.

Keywords: Agricultural productivity; Environmental quality; Panel data; Sub Saharan Africa.