The primary sector is vital for growth and sustainable development in emerging countries. The combined effects of COVID-19 and geopolitical uncertainty on capital flows are likely to have profound impacts on many developing countries. In particular, decreased capital inflows into agriculture will negatively affect food security and growth. However, there remain limited literature on the role of capital inflows in this sector. In this paper, we examine the role that foreign capital inflows play in the development of the agricultural, forestry and fishing sectors in developing countries. Specifically, we use the panel vector autoregression approach that accounts for endogeneity. Using data from sixteen developing economies, we find that there exists bidirectional causality between foreign direct investments in agriculture, forestry and fishing and value added in these sectors. These bidirectional relationships reflect a cyclical effect between FDI and value added in the agriculture, forestry and fishing. The effect of FDI on value added in agriculture, forestry and fishing remains positive for up to five years in our model. This implies FDI has a medium- to long-term positive impact on value added in agriculture, forestry and fishing. The implication of this result is that countries with currently high FDI transaction costs or that have a generally less conducive investment environment can improve agriculture by eliminating these obstacles. This is because FDIs can lead to improved technologies and technical expertise, practices, management and other systems that benefit the host countries.

Evidence on income as a crucial driver of renewable energy consumption in Africa is mixed. But hydropower accounts for over 90% of renewable energy in sub-Sahara Africa alone. Yet, empirical evidence suggests that hydropower may not be as environmentally sustainable as believed and, as a legacy source of energy in Africa, may not accurately reflect attitudes on renewable energy motivated by environmental concerns. This paper examines the role played by economic performance in the rising sustainable energy consumption in Africa, focusing on the renewable energy sources that are compatible with sustainable development. The difference generalized method of moments, fully modified ordinary least squares, and dynamic ordinary least squares are employed to estimate the statistical significance of income, environmental sustainability proxy, and prices as important drivers of sustainable energy consumption in a panel of 10 African countries for the period 2000–2011—a time frame characterized by a rapid rise in renewables as a priority in environmental policy. With timing and measurement considerations on sources of renewables, results indicate that in contrast to recent literature, the rise in sustainable energy consumption in Africa is strongly driven by rising domestic incomes. In line with literature, however, there is a generally positive, albeit statistically insignificant relationship between sustainable energy consumption and levels of carbon emissions. Oil prices in real terms also correlate with sustainable energy consumption. Available data also show that countries with low energy security also coincidentally tend to have high small hydropower capacity, providing potential for sustainably reducing energy insecurity.