Table 11.8—Estimated government resource allocation in the investment analysis (percent)
Agriculture scenario
Agricultural growth from PAE growth only
Baseline Indicator
Agricultural growth including effects of faster PNE growth
Low High Low High scenario elasticity elasticity elasticity elasticity
Real annual growth rate Total public expenditure 2.6 6.8 3.9 6.8 Agriculture
Nonagriculture
Government expenditure share PAE/total expenditure 2004 2010 2015
PAE/agricultural GDP 2004 2010 2015
PNE/nonagricultural GDP 2004 2010 2015
Total expenditure/total GDP 2004 2010 2015
3.9
5.4 15.7 9.5 15.5 9.4 7.1 40.0 19.1 39.4
18.8 4.1
5.7 15.3 8.7 15.2 8.6 7.6 45.6 16.2 45.1
16.0 26.5
22.5 22.4 22.4 22.5 19.7 19.5 19.5 19.7
21.9
19.5 20.9 19.5 21.0 17.7 25.3 18.8 25.4
19.6 18.9
Sources: Authors’ investment analysis results, based on their literature review of elasticities; data from IFPRI (2010) and Zambia, CSO (2007b); and the Zambian dynamic computable general equilibrium model results. Note: GDP = gross domestic product. PAE = public agricultural expenditure. PNE = public nonagricultural expen- diture. Blank cells = not applicable.
remain unchanged from the baseline scenario. The second scenario allows increases in both PAE and PNE—the latter is proportional to the increase in the non- agricultural GDP growth rate observed in the Agriculture scenario. This second scenario is more realistic than the fi rst, given the sectoral linkages in the economy. We assume that the range of the elasticity of agricultural GDP growth with respect to PAE growth is 0.15–0.25, representing low and high spending effi ciencies, respectively.
When the additional growth required to achieve the 6 percent agricultural growth target is supported solely by PAE, then the required growth in PAE is more