Impact of Agricultural Productivity on Economic Growth and Poverty Alleviation in ECOWAS Countries: An Empirical Analysis

Many African countries are still being faced with basic welfare issues such as hunger and extreme poverty, sparking debates among researchers and policy makers on whether the continent can endogenously leverage its agricultural potentials to address these challenges. To contribute to these debates, this study employs a panel data spanning 26 year (1990-2015) and including 13 ECOWAS countries to analyze the impact of production factors on agricultural productivity and examine the question of whether and how agriculture can serve as a tool for growth and poverty alleviation in the region. By linearizing the Cobb-Douglas production function and using fixed effects (FE) with country dummies, we find positive and significant relationship between lands cultivated, physical and financial capitals, as opposed to labor employed on agricultural productivity. Next, by using 2SLS/IV and GMM/IV methods, we show that agricultural productivity can be a pro-growth and counter-poverty tool. Furthermore we find that non-agricultural productivity interacts significantly with agricultural productivity and that agricultural productivity gap (APG) decreases both growth and poverty index. Following these results, we chart the transmission mechanisms for policy makers that will allow them to understand the linkages and pathways through which agricultural productivity affects the entire economy.