An investigation of the contribution of processed and unprocessed agricultural exports to economic growth in South Africa

Courage Mlambo, Peter Mukarumbwa and Ebenezer Megbowon

Cogent Economics & Finance, 2019, vol. 7, issue 1, 1694234

Abstract: The paper attempts to empirically test the contribution of unprocessed and processed agriculture of exports to economic growth in South Africa. The study used time series data which spanned from 1986 to 2012. A Johansen cointegration approach was used to test for cointegration after the unit root tests had shown that all variables were non-stationary at levels. Cointegration results showed that there was one cointegrating equation. Subsequently, a VECM was used as the estimation technique. The study found that processed agricultural exports have a positive relationship with economic growth whereas unprocessed agricultural exports have a negative relationship with economic growth. This shows that manufactured agricultural exports contribute significantly to economic growth. The study recommends that the South African government should promote and stimulate investment in the processed agricultural commodities sector. There should be more production and expansion in the manufacture agricultural commodities sector. Processed manufactured goods usually are sold at a much higher price and this may generate more income for South African firms.

Date: 2019
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DOI: 10.1080/23322039.2019.1694234

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