Impact of structural adjustment programs on agricultural growth in Kenya

Abstract

The study was an examination of the impact of structural adjustment programs on agricultural growth in Kenya. Statistics indicate that agricultural value added growth in Kenya is important as it highly influences the overall GDP growth. Therefore, the agricultural sector is still the backbone of the Kenyan economy. Despite this, the performance of the agricultural sector has shown mixed fortunes since independence. Overall, the agricultural performance can be described as poor as it has been stagnant in most years. Structural adjustments policies designed by world financial institutions such as the World Bank and the International Monetary Fund (IMF) were geared at improving the socioeconomic conditions of nations with poor socioeconomic performance. Adoption and implementation of such policies (e.g., currency devaluation, trade liberalization, privatization, and removal of subsidies) in the 1980s and 1990s was seen as a way of reversing the widespread social and economic problems of developing nations. However, there exists a difference in opinions on how these structural adjustment programs have affected the agricultural sector performance. The study therefore seeks to establish the impact of structural adjustment programs on agricultural growth in Kenya. In addition, the study shall examine the short run and long run determinants of agricultural sector performance in Kenya. To achieve this, the study shall use time series regressional modeling for data spanning from 1975 to 2010. Tests of normality, unit roots test and cointergarion test will be applied to determine the properties of the data. Upon proof of cointergration, an error correction model will be estimated to link the short run and the long run relationships.