Importance of the Improvement in the Agricultural Technology of Sub-Saharan Africa on Local Economic Development and International Trade

Abstract

This study assesses the impacts of technological innovation in Sub-Saharan African agriculture on local and global economies. Using the Eaton–Kortum model, with θ = 4.0875, the results show that comparative advantage’s positive impact on agricultural trade more than offsets the negative impacts of geography barriers. Sub-Saharan Africa is among the least competitive region with respect to agriculture production. This is due to its low value of the technology parameter, about 0.16 compared to the North American’s one (93.23). We found that increasing the technology of a country in Sub-Saharan Africa would increase world trade volume within the range of 0.02 to 0.19%. It would increase the local agricultural monthly wage and the welfare of farmers in the Sub-Saharan African region. Therefore, to improve technology in the Sub-Saharan African region, policymakers need to attract foreign direct investment by making incentives and increasing labor skills. This study adds to the literature by determining the contribution of the agricultural sector in Sub-Saharan Africa in global economic development through international trade. It also informs policies on the reduction of poverty and food insecurity around the world in order to achieve some of the Sustainable Development Goals.