Beyond the farm: Economy-wide effects of irrigation development in Sub-Saharan Africa

This study investigates the economy-wide welfare implications of expanding irrigation schemes in Africa, taking Benin and Kenya as case studies. We apply a comparative static computable general equilibrium model and distinguish the effects of the short-term construction phase and medium as well as long-term operational phase of expanded irrigation. While outcomes for the two cases differ in the details, we find for both countries that the construction phase results in negative welfare effects for most households if the schemes are financed through increasing income tax rates. Yet, these losses can be overcompensated in the operational phase of the irrigation schemes, due to the expansion of export-oriented agriculture and related multiplier effects. In both countries, we find that gross domestic product (GDP) increases by approximately 0.1% for every 50,000 ha of irrigation expansion. In absolute terms, this translates to an annual GDP growth of 381 USD and 1835 USD per additional hectare irrigated for Benin and Kenya, respectively. To achieve a pro-poor distribution of welfare, fair access for poor households to the newly irrigated land is crucial.