Productivity differentials and technology gap in African agriculture: A stochastic metafrontier approach

Abstract

Increased agricultural productivity is important for development and poverty reduction in Africa. However, productivity levels in African agriculture is very low and strategies for improving them have not produced the desired outcome. Successful productivity improvement strategies are contingent on identifying sources of productivity growth in African agriculture. This paper sought to examine sources of productivity in African agriculture using cross-country panel data. Specifically, a stochastic metafrontier model was employed to decompose efficiency into technical efficiency and technology gap. Generally, the results show an average efficiency of 71%, indicating about 29% shortfall in efficiency in African agriculture. The source of inefficiency is attributable to technological inefficiency rather than technical inefficiency because the empirical estimates show that almost all countries are producing close to the regional frontier. Using the bootstrap truncated regression model, factors such as expenditure on R & D, trade and literacy were determined as having efficiency increasing effects