Financial sector development and Investment in selected countries of the Economic Community of West African States: empirical evidence using heterogeneous panel data method

Abstract This study investigated the impact of financial sector development on domestic investment in selected countries of the Economic Community of West African States (ECOWAS) for the years 1985–2017. The study employed the augmented mean group procedure, which accounts for country-specific heterogeneity and cross-sectional dependence, and the Granger non-causality test to test for causality in the presence of cross-sectional dependence. The results show that (1) The impact of financial sector development on domestic investment depends on the measure of financial sector development utilised; (2) Domestic credit to the private sector has a positive but insignificant impact on domestic investment in ECOWAS, whereas banking intermediation efficiency (i.e., ability of the banks to transform deposits into credit) and broad money supply negatively and significant influence domestic investment; (3) Cross-country differences exist in the impact of financial sector development on domestic investment in the selected ECOWAS countries; and (4) Domestic credit to the private sector Granger causes domestic investment in ECOWAS. The study recommends careful consideration in the measure of financial development that is utilised as a policy instrument to foster domestic investment. We also highlight the importance of employing country-specific domestic investment policies to avoid blanket policy measures. Domestic credit to the private sector should be given priority when forecasting domestic investment into the future

Financial Sector Development and Investment in Selected ECOWAS Countries: Empirical Evidence using Heterogeneous Panel Data Method

This study investigated the impact of financial sector development on domestic investment in selected Economic Community of West African States (ECOWAS) countries for the years 1985 to 2017. The study employed the Augmented Mean Group procedure which accounts for country specific heterogeneity and cross sectional dependence, and the Granger non-causality test robust to cross sectional dependence. The result reveals that (1) the impact of financial sector development on domestic investment depends on the measure of financial sector development utilised, (2) domestic credit to the private sector has a positive but insignificant impact on domestic investment in ECOWAS while banking intermediation efficiency (i.e. ability of the banks to transform deposits into credit) and broad money supply negatively and significant influence domestic investment, (3) cross country differences exist on the impact of financial sector development on domestic investment in the selected ECOWAS countries, and (4) domestic credit to the private sector Granger causes domestic investment in ECOWAS. The study recommends cautiousness in terms of the measure of financial development which is being utilised as a policy instrument to foster domestic investment as well as the importance of employing country-specific domestic investment policies in order to avoid blanket policy measures. Also, domestic credit to the private sector should be given priority when forecasting domestic investment into the future

Yield gaps, nutrient use efficiencies and response to fertilisers by maize across heterogeneous smallholder farms of western Kenya

The need to promote fertiliser use by African smallholder farmers to counteract the current decline in per capita food production is widely recognised. But soil heterogeneity results in variable responses of crops to fertilisers within single farms. We used existing databases on maize production under farmer (F-M) and researcher management (R-M) to analyse the effect of soil heterogeneity on the different components of nutrient use efficiency by maize growing on smallholder farms in western Kenya: nutrient availability, capture and conversion efficiencies and crop biomass partitioning. Subsequently, we used the simple model QUEFTS to calculate nutrient recovery efficiencies from the R-M plots and to calculate attainable yields with and without fertilisers based on measured soil properties across heterogeneous farms. The yield gap of maize between F-M and R-M varied from 0.5 to 3 t grain ha-1 season-1 across field types and localities. Poor fields under R-M yielded better than F-M, even without fertilisers. Such differences, of up to 1.1 t ha-1 greater yields under R-M conditions are attributable to improved agronomic management and germplasm. The relative response of maize to N-P-K fertilisers tended to decrease with increasing soil quality (soil C and extractable P), from a maximum of 4.4-fold to -0.5- fold relative to the control. Soil heterogeneity affected resource use efficiencies mainly through effects on the efficiency of resource capture. Apparent recovery efficiencies varied between 0 and 70% for N, 0 and 15% for P, and 0 to 52% for K. Resource conversion efficiencies were less variable across fields and localities, with average values of 97 kg DM kg-1 N, 558 kg DM kg-1 P and 111 kg DM kg-1 K taken up. Using measured soil chemical properties QUEFTS over-estimated observed yields under F-M, indicating that variable crop performance within and across farms cannot be ascribed solely to soil nutrient availability. For the R-M plots QUEFTS predicted positive crop responses to application of 30 kg P ha-1 and 30 kg P ha-1 + 90 kg N ha-1 for a wide range of soil qualities, indicating that there is room to improve current crop productivity through fertiliser use. To ensure their efficient use in sub-Saharan Africa mineral fertilisers should be: (1) targeted to specific niches of soil fertility within heterogeneous farms; and (2) go hand-in-hand with the implementation of agronomic measures to improve their capture and utilisation

A meta-analysis of long-term effects of conservation agriculture on maize grain yield under rain-fed conditions

Conservation agriculture involves reduced tillage, permanent soil cover and crop rotations to enhance soil fertility and to supply food from a dwindling land resource. Recently, conservation agriculture has been promoted in Southern Africa, mainly for maize-based farming systems. However, maize yields under rain-fed conditions are often variable. There is therefore a need to identify factors that influence crop yield under conservation agriculture and rain-fed conditions. Here, we studied maize grain yield data from experiments lasting 5 years and more under rain-fed conditions. We assessed the effect of long-term tillage and residue retention on maize grain yield under contrasting soil textures, nitrogen input and climate. Yield variability was measured by stability analysis. Our results show an increase in maize yield over time with conservation agriculture practices that include rotation and high input use in low rainfall areas. But we observed no difference in system stability under those conditions. We observed a strong relationship between maize grain yield and annual rainfall. Our meta-analysis gave the following findings: (1) 92% of the data show that mulch cover in high rainfall areas leads to lower yields due to waterlogging; (2) 85% of data show that soil texture is important in the temporal development of conservation agriculture effects, improved yields are likely on well-drained soils; (3) 73% of the data show that conservation agriculture practices require high inputs especially N for improved yield; (4) 63% of data show that increased yields are obtained with rotation but calculations often do not include the variations in rainfall within and between seasons; (5) 56% of the data show that reduced tillage with no mulch cover leads to lower yields in semi-arid areas; and (6) when adequate fertiliser is available, rainfall is the most important determinant of yield in southern Africa. It is clear from our results that conservation agriculture needs to be targeted and adapted to specific biophysical conditions for improved impact

Lablab purpureus—A Crop Lost for Africa?

In recent years, so-called ‘lost crops’ have been appraised in a number of reviews, among them Lablab purpureus in the context of African vegetable species. This crop cannot truly be considered ‘lost’ because worldwide more than 150 common names are applied to it. Based on a comprehensive literature review, this paper aims to put forward four theses, (i) Lablab is one of the most diverse domesticated legume species and has multiple uses. Although its largest agro-morphological diversity occurs in South Asia, its origin appears to be Africa. (ii) Crop improvement in South Asia is based on limited genetic diversity. (iii) The restricted research and development performed in Africa focuses either on improving forage or soil properties mostly through one popular cultivar, Rongai, while the available diversity of lablab in Africa might be under threat of genetic erosion. (iv) Lablab is better adapted to drought than common beans (Phaseolus vulgaris) or cowpea (Vigna unguiculata), both of which have been preferred to lablab in African agricultural production systems. Lablab might offer comparable opportunities for African agriculture in the view of global change. Its wide potential for adaptation throughout eastern and southern Africa is shown with a GIS (geographic information systems) approach

Modelling predicts that soybean is poised to dominate crop production across Africa

The superior agronomic and human nutritional properties of grain legumes (pulses) make them an ideal foundation for future sustainable agriculture. Legume‐based farming is particularly important in Africa, where small‐scale agricultural systems dominate the food production landscape. Legumes provide an inexpensive source of protein and nutrients to African households as well as natural fertilization for the soil. While the consumption of traditionally grown legumes has started to decline, the production of soybeans (Glycine max Merr.) is spreading fast, especially across southern Africa. Predictions of future land‐use allocation and production show that the soybean is poised to dominate future production across Africa. Land use models project an expansion of harvest area, while crop models project possible yield increases. Moreover, a seed change in farming strategy is underway. This is being driven largely by the combined cash‐crop value of products such as oils and the high nutritional benefits of soybean as an animal feed. Intensification of soybean production has the potential to reduce the dependence of Africa on soybean imports. However, a successful ‘soybean bonanza’ across Africa necessitates an intensive research, development, extension and policy agenda to ensure that soybean genetic improvements and production technology meet future demands for sustainable production