The Effects of Policy, Market Access and Governance on Food Production in East Africa

Abstract

This study investigates the effect of policy, market access, and governance on food production in 12 East African countries from 1993 to 2022. The data was analyzed using both static and dynamic panel models. The study data possess endogeneity, slope heterogeneity, cross sectional dependence, heterogeneity, heteroscedasticity, and autocorrelation problems. The static panel model estimates are no longer applicable; they are biased, inconsistent and inefficient under this assumption. The dynamic panel ARDL approach confirmed that food imports, log of food aid, inflation rate, fixed telephone subscriptions, and governance have a significant negative effect on food production in the long run, while the lagged value of food production has a negative effect on food production in the short run. The error correction term value showed that all variables move towards long-run equilibrium at an annual speed of adjustment of 28.32%, with the influence of the independent variables enhancing food production in the long run. The study's country-specific analysis confirmed the existence of short-term relationships in food production in the selected East African countries. The Granger causality test revealed bidirectional causal relationships between food production, log of food aid and fixed telephone subscription; unidirectional causal relationships between food export, food import, governance, urbanization, and food production. To encourage food production governments, monetary policy makers, and nongovernmental in East African countries should focus on governance reforms to improve transparency, accountability, and policy implementation in the agricultural sector, encouraging import substitution, diversifying food sources, investing in technology, promoting sustainable agriculture, building farmers' capacity through training. Policymakers should also provide support for technological adoption and long-term improvements in food production, including mobile device training in East African countries.