Evaluation of the budgetary allocation policy on the levels and quality of public agriculture budgets and expenditures in Malawi and Rwanda

M.A. (Public Management and Governance)This study sought to assess the main outcomes of the 2003 Maputo Declaration encapsulating the political decision of the Heads of State of the Organization of African Unity (OAU), within the framework of the Comprehensive Africa Agriculture Development Programme (CAADP), to allocate at least 10% of national public budgets to the agriculture sector. The scope of the assessment included the levels, composition, efficiency and effectiveness of public expenditures in the agriculture sector. For this reason, the study not only sought to find out the calibration of the levels and quantities of resources allocated to, or spent in the agriculture sector, but also undertook a diagnosis of the composition and patterns in resource allocations and expenditures in the agriculture sector. The study, designed in form of an exploratory and pilot research, was conducted in two African countries (Rwanda and Malawi) and adopted an orientation towards discovering ideas and insights – not for purposes of coming up with final answers or decisions, but rather for providing a better understanding of the situation to inform the construction of larger research efforts. Specifically, the study aimed to: i) determine the patterns in public agriculture allocations and expenditure after the Maputo Declaration; ii) to identify the factors that determine or influence the levels and composition of budgetary allocations and expenditure in the public agricultural sector. From the population frame comprising all 54 member states of the African Union, a purposive stratified sampling method was employed to select the two countries. A judicious blend of qualitative and quantitative methods and attendant techniques was employed in data collection and analysis. Qualitative information was collected largely using a literature review and participatory research methods, such as semi-structured interviews with key informants. On the other hand, quantitative information was collected using a suite of methods and tools, such as simple questionnaires administered among specific country respondents. Anecdotal evidence drawn from literature review showed that Malawi allocates well above the 10% CAADP target for its national resources to agriculture, while Rwanda, in spite of being the first country on the continent to sign the CAADP Compact, allocates less than 10% of its public resources to the sector. The research, undertaking a deeper analysis revealed that Malawi exhibited consistent increases in the percentages of agricultural expenditure as a share of the national expenditure for the entire period under study (2000 to 2013), except in 2002/03 and in 2008/09. In fact, there is evidence that Malawi spent over 30% of its national resources on agriculture, although this percentage declined to 24.7% in the subsequent year. Most of Malawi’s expenditure is explained by the thrust that the government had placed on farm-input subsidies. It is also noteworthy that a significant proportion of Malawi’s agriculture budget (about 80%) is funded by external donors. The research revealed that the expectations of agriculture’s contribution to the growth and development of the national economy forms part of the major explanations behind the gigantic proportions of the national budget allocated to the agricultural sector. This is consistent with findings of another study that showed that show that agricultural-led economic growth has a greater impact on poverty reduction than does the same level of growth driven by non-agricultural sectors. Rwanda exhibited clearly different trends in agriculture expenditure from those exhibited by Malawi; with the exception of a spike recorded in 2001-2002, the subsequent periods all the way to the year 2006 show a consistent decline in expenditure. This study revealed that the share of agriculture expenditure in the national total fell from 8.6% recorded in 2002 to 3.3% in 2006. The patterns in agriculture budget allocations and public expenditure in Rwanda continued to drop and, in the best case scenario, the allocation patterns stagnated. The reasons for the drop before 2007 are unclear. However, Rwanda registered a consistent rise in public expenditure in the agricultural sector after 2007, both in absolute and relative terms. It is recalled that Rwanda was the first country on the continent to sign the CAADP Compact in 2007