Interaction Effects of Agricultural Output Price and Agricultural Productivity on Industrialization in Sub-Saharan Africa

Series Economics and Business Issues Volume 12, 2024 Interaction Effects of Agricultural Output Price and Agricultural Productivity on Industrialization in Sub-Saharan Africa

Volume 12, 2024

Anu Keshiro TORIOLA, Oluwaseyi Adedayo ADELOWOKAN

Acta Univ. Sapientiae, Economics and Business, 12 (2024) 95–113

DOI: 10.47745/auseb-2024-0005

Abstract. This study explores the interactive role of agricultural output price in the agricultural productivity and industrial output nexus. The data used are on sub-Saharan African countries as listed in the World Bank database of the World Development Indicators and Food and Agriculture Organization from 1995 to 2022. The results from the system-generalized method of moments estimation demonstrate that the agricultural output price increases the effect of agricultural productivity on industrial output.This result then shows that with a better agricultural output price, there will be a significant positive effect of agricultural productivity on the industrial output in sub-Saharan Africa. Thus, the study advocates the adoption of a counterbalanced agricultural output price policy in the form of subsidy through minimum price guarantee and government direct purchase to make the price stable and attractive for the teeming population and investors while also ensuring the affordability of the output for consumers across all income groups in the region.

Keywords: agricultural output price, industrialization, interaction effect, sub-Saharan Africa, system-generalized method of moments

JEL Classification: Q10, Q11, L60, C23

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Volume 12, 2024

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Interaction Effects of Agricultural Output Price and Agricultural Productivity on Industrialization in Sub-Saharan Africa - Acta Universitatis Sapientiae