| dc.description.abstract | Economically, countries are funded by three economic sector structures nobably primary, secondary and tertiary economic sectors. The economy of South Africa also depends on these three sector performances for its growth and development. Economies of most developing countries are mostly reliant on the agricultural sector for industrialisation,for which there is evidence that even the current industrialised economies transformed through the agricultural sector. However, South Africa depended on the agricultural, mining and manufacturing sectors for transformation because ofthe consistent low performance of the agricultural sector. Though these sectors are still playing a significant role in economic growth and development in South Africa, the country facesa highunemployment rate, stagnating growth and low living standards. Growth in the primary sectors is impacted negatively by domestic and global constraints. Besidesthe highunemployment rate, the said constraints include but are unlimited to global competition, limited supply of energy, volatile exchange rate, output reduction, deteriorating terms of trade, the impact of the 2008 global financial crisis, imbalance imports and exports, which all have adverse effects on the South African economy. However, since the early 2000s, the Presidency (2001) lamented that successful development in South Africa is dependent upon an agriculture-led growth strategy and direct policies at agricultural growth facilitation. Nonetheless, all strategies employed to induce agricultural productivity in South Africa proved futile.
Consequently, this study was commissioned to analyse the impact of the agricultural sector on economic growth and development in South Africa. The following empirical objectives were set to support the primary objectives of the study: (i) to determine the long-run impact of the agricultural employment, agricultural exports and agricultural output (GVA) on economic growth and development in South Africa; (ii) to determine the short-run impact of agricultural employment, agricultural exports and agricultural output (GVA) on economic growth and development in South Africa; (iii) to analyse the causal effects between agricultural employment, agricultural exports agricultural output (GVA) and economic growth and development in South Africa; (iv) to formulate recommendations for improved growth and development pertaining to the agricultural sector, economic growth and development in South Africa. Secondary annual time-series from 1994 to 2019 data used in the study were acquired from the South African Reserve Bank (SARB), the World Bank’s world development indicators (WDI) and Quantec Easy Data. The data wereanalysed using different statistical and econometric approaches comprising descriptive statistics, Pearson correlation, unit root and stationarity tests using the autoregressive distributed lag (ARDL) model, error correction model (ECM) and the Toda-Yamamoto causality tests.
The study findings suggest the existence of a long-run relationship between dependent and independent variables. In order words, economic growth and development will respond positively to improvement in agricultural performance in South Africa. Improving agricultural productivity and agricultural GVA will improve both the contribution of agricultural employment and agricultural exports towards economic
growth and economic development as well as enhance the living standards in South Africa. Agricultural exports were found to be contributing less to economic growth in South Africa. Due to the low agricultural productivity and thus failure by the agricultural sector to satisfy domestic consumption, large quantities of food imports into South Africa reduce agricultural export objective to the attainment of positive trade balance only. Should the government improveagricultural policies and adopt export-oriented policies, increased exports will impact positively not to economic growth and development only, but on agricultural employment too. In addition, the long-run negative impact of agricultural employment on per capita GDP as indicated by empirical results of the study requires the adoption of productivity-enhancing technologies, which when coupled with agricultural employment, will increase agricultural productivity and contribute to employment creation in the sector. The impact of agricultural performance in the short-run is limited since changes that occur in the South African agricultural sector in the short-run do not have an impact on economic growth. However, short-run changes in chosen variables do have a positive impact on economic development. This means that inclusive and sustainable agricultural policies together with effective strategies are required to support the sector and induce economic growth and development in the short-run. | en_US |
