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Abstract
Although South Africa exhibits an increasing positive trend in agricultural exports, poverty
still remains a considerable challenge in the country. This study sought to determine whether
South Africa’s increasing trend in agricultural export performance translated into lower
poverty levels between 1996 and 2014. Specifically, the study evaluated the effects of export
intensity of agricultural goods disaggregated by end-use category on poverty outcomes with
the help of the concept of ‘policy complementarities”. Rather than the commonly used
poverty measures such as poverty head count ratio and poverty gap, relative poverty is used in
this study. Export intensity is individually interacted with proxies of access to credit,
educational and governance systems to capture the role of policy complementarities. To
address the reverse causality problem associated with exports and poverty, a Two Stage
Squares (2SLS) estimator was used.
Results suggest that South Africa’s agricultural trade performance exhibits significant poverty
reducing effects. In presence of supportive complementary domestic policies (e.g. increased
access to credit), increasing exports of household consumption goods and intermediate goods
reduces poverty outcomes by 21% and 15.2%, respectively. Results also suggest that imports
of household consumables significantly reduce poverty levels by 9.5-22%, depending on the
model used. Conclusively, South Africa’s good performance in agricultural trade translated
into poverty reduction. Policy wise, there is need to further enhance the populace’s education
levels, increase people’s confidence in public institutions of governance, as well as boost the
depth of the financial sector. It is also necessary to promote importation of household
consumables, particularly those that are not necessarily produced in the country.