Poverty Reduction In South Africa Research Articles

Social financial grants [SFGs] and poverty eradication in South Africa

ABSTRACT This study examines the role of Social Financial Grants (SFGs) in poverty reduction in South Africa, focusing on their impact on economic stability and income inequality. Using a structured model, it explores both the direct and mediated effects of SFGs on poverty alleviation. Results indicate that SFGs significantly reduce poverty by decreasing income inequality and enhancing economic stability, key factors in a highly unequal society. Effective administration and expansion of SFGs could further benefit vulnerable populations. The study notes limitations, such as the need for longitudinal data to assess sustainability and attention to regional disparities. Recommendations include integrating SFGs with job training, improving distribution, and reducing stigma. Implications extend beyond South Africa, offering insights for other developing nations. Future research should investigate additional mediators and conduct comparative regional studies to optimise social grant programmes globally.

The role of fiscal policy on poverty reduction in South Africa

This paper presents the results of ridge regression analysis of the relationship between government spending in emancipation programmes and multidimensional poverty, focusing on South Africa. Through the Principal Component analysis, we retained three variables of this relationship, affected by a range of factors, to determine the size and direction of the relationship. Besides health, we find no clear evidence that government spending on housing and social security significantly reduces multidimensional poverty. Co-production in housing, healthcare delivery, and social security should be encouraged.

The impact of manufacturing exports on food poverty reduction in South Africa

As South Africa struggles to deal with many of its socio-economic challenges including poverty, this paper was interested to empirically unpack how trade specifically manufacturing exports are contributing towards poverty reduction. The paper was motivated by the decent surge in exports especially in the manufacturing sector whilst on the other side, poverty levels increased. The paper employed time series data spanning 1990-2020 in a Vector Error Correction Model (VECM). The food poverty line index was used as the dependent variable, and it was found that exports from the manufacturing sector were significant in explaining food poverty reduction for South Africa. Further, economic growth and the human development index (HDI) were found to have poverty reducing effects in the long run. Interestingly, we found foreign direct investment increasing food poverty in South Africa in the long-run but reducing it in the short-run. Policy recommendations arising from our results are that South African authorities should consider pursuing more export led growth policies especially in industries that can absorb labour from those with little or no skills. Also, foreign direct investment should be encouraged in sectors that are not labour substitutive so that more inflows can lead to reduced food poverty through job creation in the long run.

Household and contextual indicators of poverty in the Gauteng province of South Africa: A multilevel analysis

This study aims to analyse the socio-economic factors contributing to poverty reduction in South Africa using time series data from 2006 to 2019. The stationarity of the variables will be assessed by applying the Augmented Dickey Fuller (ADF) test. The Autoregressive Distributed Lag (ARDL) analytical technique will be adopted to analyse the cointegration amongst variables pertaining to different orders of cointegration amongst lower bound [I(0)] and upper bound [I(1)]. The study will analyse the long-term and short-term effects of the socio-economic factors contributing to poverty reduction in South Africa. If the calculated F-statistic is greater than the upper bound [I(1)], the Error Correction Model will be adopted to assess the short-run effects. Diagnostic tests will be performed to test the robustness of the model. The tests will performed will include: (1) the Breusch-Godfrey test for serial correlation; (2) the Jarque-Bera test for normality; (3) the Breusch-Pagan-Godfrey technique to test for heteroscedasticity; and (4) the cumulative sum chart to detect deviation from the average associated with a subgroup.

Addressing vulnerability and exclusion in the South African small-scale fisheries sector: does the current regulatory framework measure up?

Small-scale fishers and fishing communities have long suffered marginalisation and discrimination in South Africa. New laws and policies promulgated as the result of a court case brought by small-scale fishers, NGOs and academics attempt to rectify this problem. Drawing on the poverty-vulnerability-marginalisation framework, the paper considers whether this regulatory regime reduces vulnerability and marginalisation within the sector as an important precursor to poverty reduction initiatives, such as improved rights allocation. While the new regulatory regime is a step in the right direction, the paper ultimately finds that there are shortcomings in these laws, many of which have been thrown into sharp relief by the rights implementation process and COVID-19 lockdowns. These include narrow eligibility criteria for fishing rights, a lack of substantive solutions when it comes to vulnerable groups, processes insufficient to prevent elite capture, and impediments to the practice of alternative livelihoods. These shortcomings must be addressed through the appropriate expansion of access rights, consultation with fishers and more inclusive drafting, if the contribution of small-scale fisheries to development and poverty reduction in South Africa is to be realised.

Forecasting the Economic Growth Impacts of Climate Change in South Africa in the 2030 and 2050 Horizons

In this paper, we estimate the effects of climate change by means of the systems generalised method of moments (System GMM) using panel data across South African municipalities from 1993 to 2016. We adapt the estimates to the municipal economic structures to forecast losses at the municipal level for the 2030 and 2050 horizons. The projections show that, relative to the 1995–2000 levels, South Africa’s economy would lose about 1.82 billion United States dollars (USD) on average due to climate change following the Representative Concentration Pathway (RCP) of 4.5 Wm−2 radiative forcing scenario, and USD 2.306 billion following the business-as-usual (BAU) scenario by 2030. By 2050, the losses will be USD 1.9 billion and USD 2.48 billion, respectively. The results vary across municipalities depending on geographic location and sectors. Natural resources and primary sectors are the most impacted, while the economic losses are more than the gains in almost all municipalities in South Africa. This has a significant bearing on sustainable poverty reduction in South Africa through pro-poor industrialisation. The implication of the findings is discussed in the paper’s conclusion.

Towards identifying enablers and inhibitors to on-farm entrepreneurship: evidence from smallholders in KwaZulu-Natal, South Africa

Enabling on-farm entrepreneurship is an important step to enhance the contribution of smallholder agriculture to rural employment and poverty reduction in South Africa. Using attributes derived from positive psychological capital as proxies for entrepreneurship and data collected from 458 smallholders in and around irrigation schemes in KwaZulu-Natal, the study empirically examines factors affecting smallholder engagement in entrepreneurship activities. Findings show that access to extension and information from scheme committees, being a male farmer, having more earned income, membership to a cooperative and access to markets have a positive effect on farmers' entrepreneurial behaviour. Factors inhibiting entrepreneurship in the context of smallholder farming include land tenure insecurity, access to land without the necessary complementary resources, consumption credit and staying far away from irrigation schemes. The study recommends addressing gender bias regarding access to resources and information. Promoting interactive learning through networking will also result in positive entrepreneurial behaviour. There is also a need for the provision of demand-driven extension services, facilitation of market linkages and enhancing access to finance for would-be entrepreneurs. Access to credit should be directly linked to agricultural production through input vouchers and value chain financing. Addressing land tenure issues along with access to other complementary resources, inputs and services will also enhance on-farm entrepreneurship in the smallholder agriculture sector.

Socioeconomic factors: Effect on the commercialization of female farmers participating in a development program

The development of entrepreneurship is one of the keys to rural poverty reduction in South Africa and the world at large. There is increasing deep concern about the worsening food security situation in several nations of the world. The onus is on the development of programs where not only men can benefit but also women, the effect and the contribution of women to the food security status rests on the development of entrepreneurship i.e. female agricultural entrepreneurs in the community. Commercialization is the basis of entrepreneurship in agriculture. Commercialization in agriculture entails more than just production but also a linkage between the household and the market. This linkage could be related to the output side or the input side. It is the aim of this study to identify the socioeconomic characteristics of the female farmers participating in a development program and to analyze the effects of the identified characteristics on their degree of commercialization. Using frequency and percentage table, parameters such as location, age, marital status, educational status, religion, household size, farming experience, farm size, number of employees, extension visits, extension source, cooperative membership, participation in a development program, entrepreneurial activity were all identified. Commercialization indices for the output and input sales were generated from the data in which the output sales were used as a dependent variable using the Ordinary Least Square regression to test for the effect of the socioeconomic characteristics on the degree of commercialization of respondents. Among the significant variables tested, educational status was positively significant, extension visit was positively significant, extension source was positively significant, membership of a cooperative society was negatively significant, participation in the development program was positively significant to the degree of commercialization. The majority indicated High entrepreneurship development.

Remittance Inflows and Poverty Dynamics in South Africa: An Empirical Investigation

In this study, we investigate the impact of remittance inflows on poverty reduction in South Africa, using time series data from 1980 to 2017. The main objective of this study is to establish whether South Africa can harness remittance inflows to alleviate poverty. Two poverty proxies, namely household consumption expenditure and infant mortality rate, are used in this study. To ensure robustness of the results, both income and non-income proxies of poverty are employed. Using the autoregressive distributed lag (ARDL) bounds approach, the study found that remittance has a negative impact on poverty in the short run and in the long run when household consumption expenditure is used as a proxy for poverty. However, when the infant mortality rate is used as a proxy, remittance is found to have no impact on poverty. It can be concluded that the impact of remittance on poverty is sensitive to the proxy used. The study concludes that South Africa could benefit immensely from some forms of remittances in its quest to poverty alleviation.

Impact of Foreign Direct Investment on Human Development Index in South Africa

Many studies have been done on the impact of Foreign Direct Investment on economic growth and poverty reduction in developing countries, however there is a lack of empirical studies of FDI impact on poverty reduction in South Africa which is the second largest FDI recipients of one of the poorest regions in the world (sub Saharan Africa). We used time series data from 1990 to 2017 with the ARDL method to evaluate the impact of FDI Inflow on HDI in the country. The results show that FDI inflow has no significant impact on HDI both in the short run and long run on the country. This result is consistent with findings reported in the literature.

Tourism and poverty in rural South Africa: A revisit

Debates about the value of pro-poor tourism indicated a need to revisit the links between the dynamics of tourism and hospitality enterprises and community poverty in rural South African towns. The numbers of tourism and hospitality enterprises in these towns are related to population numbers by a power law with a sub-linear exponent. The residents of smaller South African towns are more dependent on the tourism and hospitality sector than are the residents of larger towns. Measurement of the enterprise dependency indices (EDIs) of these towns provides a valid measurement of their wealth/poverty states. Their EDIs are directly and negatively associated with the strength of their tourism and hospitality sectors. Communities in towns with more tourist and hospitality enterprises are overall wealthier, and vice versa. This finding contrasts with a previous view about tourism and poverty reduction in South Africa. Debates about the benefits of pro-poor tourism should include information about the impact of tourism on community wealth/poverty. The EDI is a simple, yet powerful, measure to provide poverty information. Expressing the number of tourism and hospitality enterprises per 1000 residents of towns enables comparisons of towns of different population sizes. Based on ideas of the ‘new geography of jobs’, it is clear that tourism is part of what is called the traded sector and results in inflows of external money into local economies. Tourism is a driver of prosperity and a reducer of poverty in South African towns.
 
 Significance:
 
 The application of different quantitative techniques demonstrates enterprise orderliness in the tourism and hospitality sector of towns in semi-arid South Africa.
 Smaller towns are particularly dependent on the tourism sector. Analyses indicate that tourism strength decreases overall community poverty.
 Leadership provided by individuals and location of towns can contribute to tourism success and poverty reduction.
 Community wealth/poverty should form part of the pro-poor tourism debate.

Dynamic impact of fdi inflows on poverty reduction: Empirical evidence from South Africa

This paper investigates the impact of foreign direct investment (FDI) and its sustainability in the reduction of poverty in South Africa from 1980 to 2014. The main objective of this paper is to examine the relationship between FDI and poverty reduction, which is important in formulating policies that can reduce the incidence of poverty in South Africa. To enhance the robustness of the results, three poverty-reduction proxies, namely: household consumption expenditure, the infant mortality rate, and life expectancy are used. Using autoregressive distributed lag approach (ARDL), the empirical findings of this study reveals that the impact of FDI on poverty reduction is sensitive to the poverty reduction proxy and the time under consideration, i.e., whether the analysis is conducted in the long run or in the short run. When infant mortality rate (Pov2) is used as a proxy for poverty reduction, FDI has a positive impact on poverty reduction in the long run and a negative impact on poverty reduction in the short run. However, when poverty reduction is proxied by household consumption expenditure and life expectancy, the study found no significant relationship between FDI and poverty reduction in South Africa − irrespective of whether the analysis is conducted in the short run or in the long run.

Entrepreneurship Education as a Viable Tool for the Reduction of Poverty

The paper investigated entrepreneurship education as a viable tool for the promotion of entrepreneurship among university students for poverty reduction in South Africa. The paper adopted quantitat...

Agricultural Trade, Policy Complementarities and Poverty: The Role of Agricultural Trade and Policy Complementarities in Poverty Reduction in South Africa

ABSTRACTThis paper set out to answer the question as to whether South Africa’s growth in agricultural export performance was associated with poverty reduction during the period 1996-2014. The paper evaluated the effects of export intensity and policy complementarities on poverty levels using agricultural data, disaggregated on the basis of end use category. Relative poverty was used as a proxy for poverty while export intensity was interrelated with access to credit, level of education and governance systems as proxies for policy complementarities. A Two-Stage Least Squares estimator was used to control the causal relationship between exports and poverty. The researcher found that exports and imports of household consumables, good governance, education and increased access to credit significantly reduce poverty levels. It is recommended that people’s education levels be enhanced, people’s confidence in government institutions be increased, and the financial sector’s scope and depth be extended. Furthermor...

The Impact of Social Grants on Poverty Reduction in South Africa

This paper analyses the impact of social grants as a social protection measure implemented by the South African government. Literature reviewed in this paper reveals that this anti-poverty measure ...

Causal relationship between FDI and poverty reduction in South Africa

AbstractThis study investigates the causal relationship between poverty reduction and foreign direct investment (FDI) inflows in South Africa using time-series data from 1980 to 2014. The main objective of this study is to establish the direction of causality between FDI and poverty reduction, which is important to policy-makers as it identifies which variable to target first. Gross domestic product is included as an intermittent variable giving a trivariate framework. Employing the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and ECM-based causality tests, the results from this study reveal a distinct unidirectional causality from poverty reduction to FDI in both the short run and the long run when poverty reduction is measured by life expectancy and infant mortality rate. However, the study failed to find any causality, irrespective of the time considered, when poverty reduction is measured by household consumption expenditure. It can be concluded therefore, that the ca...

Graduates’ views on the impact of adult education and training for poverty reduction in South Africa

AbstractThe purpose of this article is to investigate the extent to which the skills acquired from adult education and training (AET) centres, leading to paid jobs and small businesses, have enabled trainees to be successful in generating income and the impact of AET programmes on living conditions of trainees in South Africa. The main findings reveal that the improvement in income impacted on living conditions of trainees' households and in the education of their children. As a result, the majority of the trainees became self‐sufficient and had a good life after graduating. The author concludes that AET programmes for unemployed and unskilled adults can reduce poverty and social exclusion if the AET centres have a strong emphasis on entrepreneurship and post‐training support for earning wages or creating self‐employment. The present article has implications for public policy on AET, with reference to the objective of supporting the dynamics of cohesion and social inclusion, as reflected in the 2030 Agenda for Sustainable Development Goals.

POVERTY DYNAMICS IN SOUTH AFRICA: TRENDS, POLICIES AND CHALLENGES

This paper provides an overview of poverty reduction in South Africa from 1980 to 2013. It highlights the trends in poverty; those poverty-alleviation policies that have been implemented; as well as the challenges that have been faced in reducing poverty. Poverty reduction policies that have been implemented comprise short- and long-term measures. Short-term measures have focused on increasing the disposable income of the poor. The long-term poverty-reduction reforms were aimed at the economic empowerment of the poor. Despite all the policies that have been implemented, South Africa - like other emerging economies - still faces a number of challenges related to reducing poverty.

An Integrated Developmental Model for Poverty Reduction in South Africa: An NGO's Perspective

For most of its 17 years of democracy, South Africa fight against poverty has been fragmented and uncoordinated. South Africa adopted a developmental social welfare policy in the White Paper for Social Welfare (1997). The SAVF (South African Women's Federation), a welfare sector NGO, has designed an integrated development model for social work to address poverty holistically. The model's 6 pillars are discussed, with reference to their application in the Thuthukani project. Conclusions will be based on a discussion of the value of the SAVF model in demonstrating its relevance as an antipoverty strategy within a developmental social welfare approach.

Growth, Employment and Poverty in South Africa: In Search of a Trickle-Down Effect

In this article we examine the dynamic causal relationship between economic growth, employment, and poverty reduction in South Africa -- using the Auto-Regressive Distributed Lag (ARDL) bounds testing procedure. The study attempts to answer one critical question: does economic growth in South Africa trickle down to the poor through job creation? The study uses two proxies to measure the incidence of poverty in South Africa, namely household consumption per capita and infant mortality. The empirical results of the study fail to support the trickle-down effect between economic growth and poverty reduction in South Africa. Moreover, the results show that there is no causal relationship between economic growth and poverty reduction in either direction. The results apply irrespective of whether the poverty level is measured by the real per-capita consumption or by the infant mortality rate.