Is agricultural sector growth a precondition for economic growth? The case of South Africa

Abstract

In this paper a simple growth model is adapted to explain the effect of the agricultural sectors' growth on the non-agricultural sector. The empirical results suggest that for a 1% growth in the agricultural sector, the non-agricultural sector responds by more than 1%. The results also confirm that productivity difference exists, the non-agricultural sector being more efficient in terms of input use. The empirical results supports the argument of President T. Mbeki, that South Africa should follow an 'agricultural-led' growth strategy for successful development.