Does Foreign Land Acquisition Deprive Per Capita Income in Africa?

Research in Applied Economics, Vol. 6 No. 4

24 Pages Posted: 28 Jul 2014 Last revised: 22 Oct 2014

See all articles by Adeyemi Ogundipe

Adeyemi Ogundipe

Covenant University

Samuel O. Egbetokun

Adeniran Ogunsanya College of Education,

Date Written: October 27, 2014

Abstract

This study investigates the implications of foreign land deals in Africa with regards to per capita income. It employs data from World Development Indicators, World Governance Indicators and World Trade Indicators on key variables such as arable land per person, agricultural land as percentage of land area, net food import, regulatory quality, among others (1995-2012) on selected African countries where instances of foreign land deals have been reported. The study formulates empirical models that draw from institutional development theory, which was estimated using Fixed Effects (FE) and Generalised Method of Moments (GMM) techniques in order to handle the issues of country-specific effects and endogeneity.

The results from the empirical analysis show that agricultural land influences per capita income significantly. It hereby implies that as more agricultural land are cultivated; the wellbeing of the populace is likely to be enhanced primary through increased income for farmers, increase in real money income for non-farmers, drastic reduction in food inflation and foreign exchange gains for the government. The results of the study suggest the need for controlling the issue of massive foreign land deals through viable institutional framework, though there is need for foreign investment in Africa’s agricultural sector but sound institution is pertinent in order to avoid rent seeking behaviour among stalk holders.

Keywords: Agriculture; Per capita income; Institutional quality; Land deals

JEL Classification: F21; R52; Q15; Q18

Suggested Citation

Ogundipe, Adeyemi and Egbetokun, Samuel O., Does Foreign Land Acquisition Deprive Per Capita Income in Africa? (October 27, 2014). Research in Applied Economics, Vol. 6 No. 4, Available at SSRN: https://ssrn.com/abstract=2472468 or http://dx.doi.org/10.2139/ssrn.2472468

Adeyemi Ogundipe (Contact Author)

Covenant University ( email )

Canaanland
Km 10 Idiroko road
Ota, 24001
Nigeria
+2348161927372 (Phone)

Samuel O. Egbetokun

Adeniran Ogunsanya College of Education, ( email )

Oto-Ijanikin
Lagos
Nigeria

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