An analysis of the impact of public animal health expenditures on the performance of the livestock sub-sector in Kenya

Animal diseases cause significant economic losses to the livestock sub-sector in sub Saharan Africa (SSA). To minimize these losses, SSA governments have allocated over 70% of total livestock services budgets to disease control and other animal health services. Declining state budgets, however, have led to significant fluctuations in public animal health expenditures (PAHE). In Kenya, for example, annual PAHE varied from US$ 18.3 million in 1988 to US$ 8.0 million in 1989, recovering to US$ 15.2 million by 1991. In 1995, PAHE had dropped again to US$ 7.0 million. If public investment in disease control does indeed enhance livestock production, such fluctuations raise major concerns about Kenya's ability to develop its livestock sector. This paper measures the effects of PAHE on livestock production in Kenya. The hypothesis that higher levels of PAHE improve livestock production is empirically tested using annual time series data from 1970-1995. If the hypothesis is home out, the results provide a strong argument to policy makers for strengthening financial commitments to publicly funded animal health services.