Browsing by Author "Phoofolo, Makhetha Lambert"

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    Analysis of the economic impact of a disaggregated agricultural sector in South Africa : a Social Accounting Matrix (SAM) multiplier approach
    (Stellenbosch : Stellenbosch University, 2018-03) Phoofolo, Makhetha Lambert; Punt, Cecilia; Stellenbosch University. Faculty of Economic and Management Sciences. Agricultural Economics.
    ENGLISH SUMMARY : The South African economy is developing and moving towards the secondary and tertiary sectors as indicated by the decline of the agricultural sector’s contribution to GDP in the past years. However, South African agricultural statistical reports still reflect the impact of this sector in economic development based on this declining GDP, direct employment and production value only. This traditional and narrow definition of economic contribution neglects the important indirect and induced economic impact of this sector. The main objective of this study is to quantify the economic impact of the disaggregated agricultural sector within the South African economy using a SAM multiplier model which is a useful methodology to examine the direct, indirect and induced impacts of the sector within the entire economy. The review of the literature reveals that the application of this methodology in studying the role and impact of agriculture is very limited in South Africa. The dataset used in this model is a highly disaggregated national SAM in both agricultural and non-agricultural sectors developed as part of this study for the 2014 base year. The developed detailed 2014 SA SAM has 268 accounts: 104 industries (of which 46 are for agriculture, forestry, fisheries and food processing), 133 commodities, 6 factors, 14 households, 4 tax accounts, one account for transaction costs, core government, savings-investment, stock changes, enterprises, and rest of the world. The model was used for detailed computation of multipliers and policy simulations. The results of this study demonstrated the impact of agricultural sectors on output, and incomes of labor, capital, land, enterprise and households. The results have underlined the impact of agricultural sectors, particularly fruits and vegetables as South African key sectors in generating higher labour income for unskilled and low skilled workers and in generating higher income for the low income households. These results are therefore of relevance to agricultural policy and decision makers as they make it possible to identify promising agricultural and food sectors for investment and subsidies based on these sectors’ greater impact on not only output, but on the generation of income and value added as well.