The trade and poverty nexus in South Africa: investigating the transmission mechanism and the associated challenges
- Authors: Bhebhe, Nonceba Fikile
- Date: 2022-10-14
- Subjects: Commerce , Free trade , International trade , Poverty South Africa , Poverty Prevention , South Africa Economic conditions 1991-
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/357515 , vital:64750
- Description: International trade plays an essential role in economic development strategies. In literature, foreign trade is identified as a driver of economic growth. In recent times there has been an expansion in the scope of investigations around the role of international trade to include its links with poverty alleviation. Poverty alleviation is explicitly identified as the first goal on the 2030 agenda for sustainable development under the Sustainable Development Goals and implicitly defined in goal 10. International trade is seen as the engine behind achieving the goal. South Africa records excessive poverty and inequality levels by international standards for a middle-income country. The most recent Poverty Trends Report for 2006 - 2015 reports 55.5% of the population living in poverty. Inequality statistics reported a per capita expenditure Gini coefficient of 0.65 in 2015, evidence that the country has high levels of inequality. The country's severe poverty, unemployment, and inequality prompt policymakers to formulate developmental policies around the underlying structural challenges. Trade openness has increased since the end of the Apartheid era. Despite the increased trade openness, economic growth has been insufficient in reducing the high unemployment and poverty levels, presenting a challenge for economists, who argue that trade openness is pro-growth and pro-poor. In the South African case, the lack of change in the structural challenges of poverty, unemployment and inequality has raised concerns over whether the trade policy reforms made since 1994 interfere with development objectives. This study aims to investigate the impact of trade liberalisation on poverty, using the three channels, namely enterprise, distribution, and government that have been researched within the McCulloch, Winters and Cirera framework. Specifically, it investigates the linkages via the transmission mechanism in which trade affects poverty in South Africa by mapping the transmission mechanisms from trade liberalisation to poverty alleviation, whilst identifying the possible challenges to the transmission mechanisms and lastly, analysing the stylised facts around trade and poverty in South Africa. To answer the question of this study, quantitative data from National Income Dynamic Study (NIDS) was merged longitudinally and aggregated with the industry tariff data sourced from the World Trade Organisation (WTO) and United Nations Conference on Trade and Development (UNCTAD) statistics. A path analysis was undertaken to map the transmission mechanism, whilst descriptive statistics were used to identify the possible associated challenges. The results show that the most significant channel of transmission are the enterprise and distribution channel. However, the effects are of a small margin and a more comprehensive trade policy yield a higher margin of poverty alleviation. , Thesis (MCom) -- Faculty of Commerce, Economics and Economic History, 2022
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- Date Issued: 2022-10-14
The current nature of intra-regional trade in the proposed tripartite free trade area
- Authors: Chibuta, Chisengele
- Date: 2020
- Subjects: Customs unions -- Africa, Southern -- Economic integration , Africa, Southern -- Economic policy , Africa, Southern -- Economic integration , Africa, Southern -- Economic conditions , Tripartite Free Trade Area , Free trade -- Africa, Southern
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/146744 , vital:38553
- Description: This thesis examines and analyses the current nature of intra-regional trade between member states of the proposed Tripartite Free Trade Area in order to contribute to an understanding of the potential for intra-regional trade within the region to increase. Trade Complementarity Indexes were used to determine how well the structures of the three founding blocs’ major imports and exports match. The results show that there is a high degree of trade complementarity in the trade of the top 5 major products traded between the regional groups. With the proposed TFTA in place, high trade complementarity could lead to increased trade between the regional groups. Trade Intensity Indexes were used to determine how intensively the three founding blocs trade with one another. Results from the indexes help determine the extent to which the blocs currently view each other as important trading partners and the implications of this for the proposed TFTA. Results show that EAC and SADC as well as EAC and COMESA viewed each other as significant trading partners while SADC and COMESA did not for the majority of the years from 2001 to 2018. With the TFTA in place, intra-regional trade could be strengthened among the members who currently trade intensively because tariffs between them would be progressively eliminated as required by the TFTA Agreement. Revealed Comparative Advantage Indexes were used to gain insights on whether member states have any comparative advantage in their top 5 exports. Results from the indexes were used to determine whether member states have comparative advantage in similar or dissimilar major exports and the implications of this for the proposed TFTA. Results show that member states have revealed comparative advantage in similar products and these products present opportunities for joint-production among member states as well as sectors for product development once the proposed TFTA is in place. Revealed Trade Barrier Indexes were used to gain insights into the extent of ease of market access into each regional bloc’s market. Results from the indexes indicate whether major products imported from each other receive possibly discriminatory or preferential treatment. The results indicate that the majority of the top 5 imports sourced from each region receive preferential treatment. This indicates that there is ease of market access for the top 5 imports sourced from each other and this could promote increased intra-regional trade among member states in these product categories because tariff and non-tariff barriers to trade will be progressively eliminated once the TFTA is in place.
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- Date Issued: 2020
The role of agricultural support programmes on the livelihoods of smallholder maize farmers in Lesotho: asset utilisation, productivity and perceptions
- Authors: Mohlahatsa, Taole
- Date: 2019
- Subjects: Agriculture and state -- Lesotho , Agriculture -- Economic aspects -- Lesotho , Farms, Small -- Government policy -- Lesotho , Farms, Small -- Lesotho , Agricultural assistance -- Lesotho , Rural development -- Lesotho
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/71580 , vital:29914
- Description: The agricultural sector is widely considered an important contributor to economic development in least developed countries. It plays an important role in Lesotho and has been the backbone of rural activities and the prime employer of Basotho citizens. Smallholder farming is recognised by the government of Lesotho as a vehicle for addressing food security and poverty reduction. Maize is the principal staple crop produced by about 90 percent of farmers in Lesotho and it constitutes about 80 percent of the Basotho diet. Maize production is highly affected by climate change and is characterised by fluctuating yields because of erratic rainfall. In addition to unfavorable climate change, smallholder farmers in Lesotho experience challenges such as lack of farming inputs, limited access to markets and limited financial capital. These constraints confine them to a life of subsistence farming with low production and increased incidences of poverty. The government of Lesotho has intervened in the smallholder agricultural sector to stimulate production and productivity by introducing some agricultural programmes such as (i) the National Fertiliser and Input subsidy, (ii) the Smallholder Agricultural Development Programme, (iii) the National Block Farming, and (iv) the Integrated Watershed Management Programme. However, despite such government interventions, production in the smallholder agricultural sector continues to face recurring constraints. Studies on the National Block Farming Programme have showed that the programme has had limited impact on the livelihoods of smallholder farmers. Furthermore, farmers believe the Integrated Watershed Management Programme has a biased selection criteria as selection of areas is influenced by politicians who favour areas where they have a large political following and marginilise other areas. These concerns have also led to low participation rates in such programmes as wealthier, large scale farmers capture most of the benefits of government programmes. Disproportionate benefits of agricultural programmes to smallholder farmers imply that they continue to face the same constraints in production and have to find alternative ways of maintaining production and selling excess produce to sustain their livelihoods. The main goal of this research is therefore to study the livelihoods of smallholder maize farmers in Lesotho and how agricultural support programmes influence their production of maize. The study adopted a pragmatic mixed methods approach with a qualitative dominant sequential design. Accordingly, both quantitative and qualitative data was used to address the research goal. Quantitative data collected from the Lesotho Bureau of Statistics and the World Bank was used for trend analysis on maize productivity, temperature and rainfall over the period 1980-2016. Qualitative primary data was collected by conducting focus group discussions with smallholder maize farmers and key stakeholder interviews using the sustainable livelihood framework as a conceptual guide. The study comprised of a total of 85 research participants consisting of 75 smallholder maize farmers and 10 key stakeholders. Farmers were selected from 10 key maize producing areas in Leribe and Mafeteng districts in Leribe. Results revealed fluctuating maize productivity and productivity growth rates where such fluctuations are caused by government intervention and natural calamities in the form of erratic rains and dry spells. Droughts and late arrival of subsidised inputs are the chief constraints to maize production. In relation to livelihood assets, human and social assets are the more available assets relative to other assets (financial, natural and physical) of the sustainable livelihood framework. Furthermore, the National Fertiliser and Input subsidy Programme and the Smallholder Agricultural Development Programme are the most beneficial programmes to farmers livelihoods as they increase the accessibility of limited livelihood assets and therefore allowing farmers to achieve their livelihood goals. In contrast, the National Block Farming and the Integrated Watershed Management Programme are the least beneficial programmes to farmers’ livelihoods and are biased in their geographical targeting criteria. The study recommends that the government revises all selected support programmes in this study in areas warranting improvements so as to fairly and efficiently allocate resources that meet the needs of farmers. The study also recommends that farmers put more effort in adopting new technologies and strategies to improve production of maize in areas where government intervention has failed.
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- Date Issued: 2019
Modelling the causality between FDI and Zimbabwe’s economic growth
- Authors: Mashamhanda, Tendai
- Date: 2017
- Subjects: Investments, Foreign -- Zimbabwe , Zimbabwe -- Economic conditions -- 1965-1980 , Zimbabwe -- Economic conditions -- 1980-
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/50260 , vital:25970
- Description: The study investigates the causal nexus between economic growth and FDI in Zimbabwe for the period spanning 1976 to 2011. The bounds testing approach to cointegration and Granger causality methodology was applied and results suggest a bi-directional causal relationship between FDI and economic growth in the long run. However, the causal effect from economic growth to FDI was weak. Domestic investment, human capital and trade openness were also found to be crucial determinants of economic growth in Zimbabwe. Implementing policies that promote inflow of FDI into Zimbabwe are recommended.
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- Date Issued: 2017
The implications of rural-urban migration on employment and household income with particular reference to Lesotho
- Authors: Damane, Moeti
- Date: 2012
- Subjects: Rural-urban migration -- Employment -- Lesotho Informal sector (Economics) -- Lesotho Lesotho -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1002 , http://hdl.handle.net/10962/d1002737
- Description: The research investigates the impact of internal rural - urban migration III Lesotho on household income and employment. Using data gathered from the 2002/03 household survey, the 2006 nationwide census and a questionnaire on rural - urban migration in Lesotho administered to 500 respondents in Maseru and Leribe, we estimate a logit model of the probability of employment in Lesotho in 2008 given a set of independent variables. The independent variables are respondent's work experience; years of education completed; employment status in 2004; employment status in 2008; gender; job skill level; place of residence in 2004 and a categorical variable that measures whether or not the respondent is a rural - urban migrant. The results suggest that migration and work experience have no significant impact on an individual's likelihood of being employed in the country's formal sector. Also, it was found that the higher the level of education an individual has, the less likely are their chances of employment in the country's formal sector because of the lack of formal jobs in the urban areas. Over 50% of Lesotho's workforce employed in the urban areas was discovered to work in the informal sector. The study concludes that there is a lack of jobs in Lesotho's urban formal sector that results in a thriving informal sector. The advantages of informal sector jobs to the rural - urban migrant include an increase in their standard of living as well as that of their family members left behind in the rural areas but the disadvantages include low levels of investor confidence that lead to a decrease in overall economic development and growth in the country.
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- Date Issued: 2012
Macroeconomic convergence within SADC : implications for the formation of a regional monetary union
- Authors: Johns, Michael Ryan
- Date: 2009
- Subjects: Southern African Development Community , Economic and Monetary Union , Common Monetary Area (Organization) , Economic policy -- Africa, Southern , Monetary policy -- Africa, Southern , Monetary unions , Macroeconomics
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1023 , http://hdl.handle.net/10962/d1002758 , Southern African Development Community , Economic and Monetary Union , Common Monetary Area (Organization) , Economic policy -- Africa, Southern , Monetary policy -- Africa, Southern , Monetary unions , Macroeconomics
- Description: Given the growing effect that globalisation and integration has had upon economies and regions, the process of monetary union has become an increasingly topical issue in economic policy debates. This has been driven in part by the experience and successes of the European Monetary Union (EMU), which is widely perceived as beneficial to member countries. The Southern African Development Community (SADC) is an example of a group of countries that has realised that there are benefits that may arise from economic integration. This paper makes use of an interest-rate pass through model to investigate whether the pass-through of monetary policy transmission in ten SADC countries has become more similar between January 1990 and December 2007 using monthly interest rate data. This is done to determine the extent of macroeconomic convergence that prevails within SADC, and consequently establish whether the formation of a regional monetary union is feasible. The results of the empirical pass-through model were robust and show that there are certain countries that have a more efficient and similar monetary transmission process than others. In particular, the countries that form the Common Monetary Area (CMA) and the Southern African Customs Union (SACU) tend to show evidence of convergence in monetary policy transmission, especially since 2000. In addition, from analysis of the long-run pass-through, the results reveal that there is evidence that Malawi and Zambia have shown signs of convergence toward the countries that form the CMA and SACU, in terms of monetary policy transmission. The study concludes that a SADC wide monetary union is currently not feasible based on the evidence provided from the results of the pass-through analysis. Despite this, it can be tentatively suggested that the CMA may be expanded to include Botswana, Malawi and Zambia.
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- Date Issued: 2009