Does the relative size of agricultural exports matter for sustainable development? Evidence from Sub-Sahara Africa

Abstract

This study investigates the effect of the relative size of agricultural exports on sustainable development across 46 sub-Saharan African countries between 1999 and 2020. Using data on adjusted net savings and sustainable development indices as proxies for sustainable development, the empirical analysis applies the Driscoll-Kraay standard error method which accounts for cross-sectional dependence. The results indicate that the relative size of agricultural exports has a positive effect on sustainable development while agricultural non-export production is found to contribute more to sustainable development than agricultural exports. Given agriculture's dominance and the agro-based export potential for these economies, the study recommends pro-agricultural export policies aimed at expanding agricultural exports over non-agricultural exports if the choice is between exporting agricultural commodities and exporting non-agricultural commodities. However, the import substitution strategy should be prioritized over the agricultural export promotion strategy when choosing between exporting agricultural commodities and producing for domestic consumption for higher sustainable outcomes.