From Machines to Paychecks: Social Accounting Matrix Input-Output Analysis of Mechanization and Net Employment Gains in African Food Systems

Wisdom Richard Mgomezulu, Paul Thangata, George Marechera, Jonathan Said, Davis Muthini and Sibusiso Nhlengethwa

No 397893, 100th Annual Conference, March 23-25, 2026, Wadham College, University of Oxford, Oxford, UK from Agricultural Economics Society (AES)

Abstract: Agricultural mechanization is re-emerging as a pivotal lever for transforming AgriFood Systems, boosting productivity, and creating decent jobs in low- and middle-income economies. This study utilizes country Social Accounting Matrix (SAM) for Egypt, Ghana, Uganda, Rwanda, Ethiopia and Malawi to quantify economy-wide effects of increased mechanization investment and identify where mechanization most effectively catalyzes output growth, labor income, and job creation. We apply SAM-based multiplier analysis to simulate +10% and +20% investment shocks, tracing direct and indirect effects on sectoral outputs and labor compensation, and aggregating GDP impacts. This approach captures cross-sector linkages like machinery, metals, energy, finance, and logistics while benchmarking near-term elasticities and diffusion pathways. GDP rises by approximately 0.33–0.91% at +10% shocks and doubles at +20%; labor compensation increases by roughly 0.21–0.71%. The largest sectoral output and labor-income gains accrue to machinery, equipment and vehicles, with strong spillovers to business and financial services. In agri-food, short-run output effects for staples are modest, while mechanization intensifies labor demand and incomes in post-harvest handling, grading/packaging, cold chain. The study recommends prioritization of a services-led mechanization strategy to take advantage of upstream job opportunities.

Keywords: Research; and; Development/Tech; Change/Emerging; Technologies (search for similar items in EconPapers)
Pages: 42
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aes026:397893

DOI: 10.22004/ag.econ.397893

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