The Effects of Official Development Aid on Food Security in Kenya

Abstract

This study’s main focus can be summarized as being to determine how agricultural Official Development Aid (ODA) flows into Kenya’s agriculture sector affects its food security status. A further breakdown of the study’s purpose are: evaluating the effect of agricultural foreign aid on agricultural productivity in Kenya, analysing the impact that agricultural foreign aid on government spending in agriculture and to provide policy recommendations in relation to agricultural Official Development Aid flows. The study was guided by two research questions namely; what impact does agriculture foreign aid have on food agricultural productivity in Kenya? Second, what is the effect of agricultural foreign aid on government spending into agriculture in Kenya? The agricultural sector in Kenya requires investment, foreign aid into agriculture is one form of investment into the sector. The study aimed to evaluate whether foreign aid into Kenya’s agriculture sector goes to improve or deteriorate the state of food security. The study was anchored on the modernization and dependency school of thoughts on development of economies. The explanatory variables included other than agricultural Official Development Aid are: government expenditure directed to agriculture in Kenya; annual greenhouse house emission, exchange rate and Kenyan population. Gross domestic product growth rate was included as a control variable. Secondary data was used to do empirical analysis, the source of the data being Food Agriculture Organization Statistics, World Bank and International Food Policy Research Institute. The data was analysed using STATA computer software and applying Autoregressive Distributed Lag (ARDL) model and the Error Correction Model (ECM) to evaluate the relationship and extent of impact of the independent variables on the dependent variable. The ECM results revealed that Agriculture Official Development Aid had a positive and significant effect at 10 percent on Food Production Index therefore, Agriculture Official Development Aid contributes positively to food security in Kenya. Public spending on agriculture was only significant in the short run at 10 percent and positively boosted productivity hence food security. The study notes that the agricultural sector in Kenya is in dire need of financial support both in the short run and long run and therefore recommends for increased budgetary allocations to agriculture and proactive management of the allocated resources to ensure efficient and effective utilization. The study also recommends for the government to align its policies with aid donors particularly with regards to agriculture so as to boost aid received in the sector.