Agricultural Exports, Economic Growth and Households Consumption in Togo

The role of exports in stimulating economic growth continue to be the subject of many investigations. In effect, despite theoretical foundations establishing the relationship between exports and economic growth, disagreements are persistent concerning the direction of causality and the magnitude of effects. In developing countries where agriculture is a growth sector, it is worth determining the role of agricultural exports in economic growth and households’ welfare. In this paper, we have determined the relationships between agricultural exports and economic growth on the one hand and between agricultural exports and households’ consumption on the other hand in Togo. In this respect, we have performed Granger causality tests and estimate error correction models. The results indicate that there exist a unidirectional causal relationships from the agricultural exports to economic growth and households’ consumption. The results of estimation of error correction models revealed that, deviations from the long-run equilibrium in the relationship between agricultural exports and economic growth are resorbed at the rate of 44.9 percent per year whereas deviations from the long-run equilibrium in the relationship between agricultural exports and households consumption are resorbed at the rate of 28.4 percent per year. The results suggest that, policies towards agricultural exports promotion in Togo will not only stimulate economic growth but also improve households’ consumption.