Financial development and agricultural productivity in sub-Saharan Africa

Abstract

This paper evaluates the causal relationships between financial development and agricultural productivity in sub-Saharan Africa and in economic integration zones from 1990 to 2020. The methodology used is based on the ARDL model with the PMG estimator and a panel causality test. The results reveal that financial development has a positive longterm effect but a negative short-term effect on agricultural productivity in both SSA and WAEMU. However, the zonal analysis shows that in the short run, financial development decreases agricultural productivity in SADC. They also show that there is a bidirectional causality between financial development and agricultural productivity in SSA. This situation calls for the construction of an efficient financial system that is adapted to the realities of the agricultural world.