AGRICULTURAL EXPORTS, FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN SELECTED AFRICAN COUNTRIES: A COUNTRY-SPECIFIC ARDL ANALYSIS, 1980–2023
Authors: YUSUF, Abdulrafiu Tayo, UMAR, Haruna Sulaiman and GALADIMA, Onuk E.
YUSUF, Abdulrafiu Tayo: Department of Agricultural Economics and Extension, Federal University of Lafia, Nigeria.
UMAR, Haruna Sulaiman: Department of Agricultural Economics and Extension, Nasarawa State University Keffi, Nigeria.
GALADIMA, Onuk E.: Department of Agricultural Economics and Extension, Nasarawa State University Keffi, Nigeria.
ABSTRACT
Agriculture is central to African economies, yet the joint effects of agricultural foreign direct investment (FDAI) and agricultural exports on economic growth remain poorly understood at the country level. This study examines these linkages for Nigeria, Kenya, South Africa, Cameroon, and Egypt over 1980–2023. Country-specific Autoregressive Distributed Lag (ARDL) bounds testing confirmed long-run cointegration for Nigeria, Kenya, and South Africa; Ordinary Least Squares (OLS) regression was applied to Cameroon and Egypt. Structural break detection via the Zivot–Andrews test is incorporated to account for major economic episodes across the study period. Short-run dynamics were captured via Error Correction Models and Granger causality tests. Sensitivity analyses using alternative lag lengths and an FDAI-to-GDP ratio proxy confirm robustness of key findings. Long-run estimates show agricultural exports exert a significant positive effect on growth in Nigeria (β = 0.395, P < 0.01). FDAI produced significant positive effects in Cameroon (β = 0.213, P < 0.01) and Egypt (β = 0.236, P < 0.01). Exchange-rate depreciation consistently contracted short-run GDP across ARDL countries, with adjustment speeds ranging from −21.5% per year (Nigeria) to −9.3% (South Africa). Granger causality patterns differed markedly, with Nigeria exhibiting bidirectional feedback between agricultural exports and GDP. Agriculture–growth linkages are highly country-specific, conditioned by macroeconomic stability, institutional quality, and export diversification. Important limitations include omission of institutional quality, climate, and infrastructure variables, and the inherent constraints of single-equation frameworks in the presence of exchange-rate endogeneity. Policy priorities include export-value-addition incentives, competitive exchange-rate management, and targeted agricultural investment channelled through governance-strengthening frameworks.
Keywords: Agricultural exports, foreign direct investment, economic growth, ARDL, error correction model, Africa, Granger causality