Public spending for agriculture in Africa: Definition, measures, and trends

Abstract

Over the quarter-century up to 2005, total spending in developing countries has increased by 6 percent annually (Table 2.1).2 This spending is largely driven by Asia, whose annual spending has increased by 8 percent. For all the African countries taken together, government expenditures grew at a rate of 3.8 percent per annum over the period 1980-2005. For SSA, total expenditure grew at a rate of 4.9 percent per annum over the same period. The annual growth rates have steadily increased over each decade, from 2.3 percent in the 1980s to 4.3 percent in the 1990s and to 4.8 percent after 2000. The increase in growth rate varies strongly by country, however. Total government expenditures of Botswana, Burkina Faso, Ghana, and Uganda have grown at annual rates of about 7 percent since 2000-comparable to the rates for Asia’s giants-whereas Côte d’Ivoire and Togo have experienced negative rates. Assessing total government expenditures as a percentage of GDP provides a more useful measure of the amount a country spends relative to the size of its economy and for purposes of tracking spending performance across different countries. On average, developing countries spend much less than developed countries. For example, total government outlays as a percentage of GDP in the Organisation for Economic Co-operation and Development (OECD) countries range from 27 percent in 1960 to 48 percent in 1996 (Gwartney et al. 1998), compared to 13-35 percent in most developing countries. For the three developing regions in the sample (Africa, Asia, and Latin America), the percentage of total government expenditures to GDP increased on average from 19 percent in 1980 to 23 percent in 2005. Over the past two decades, Africa spent the most, approximately 25-29 percent, compared with Asia’s 20 percent. Within Africa and among the sampled countries, Botswana, Nigeria, and Malawi spent the most, up to 40 percent.