The Contribution of Key Economic Sectors on Poverty Alleviation in the Capricorn District Municipality : A Panel ardl Model

The post-apartheid typecast idea that poverty remains common to poor households in South Africa has become precise and irrefutable. Despite this indisputable epidemic, the key economic sectors are expected to contribute to poverty alleviation. It is important to find this relationship since Capricorn District Municipality is one of the poorest districts in South Africa and there is no study done on the key sectors contributing to poverty alleviation. Thus, this paper explores whether growth in economic sectors leads to a decline in poverty. To achieve this, a panel ARDL approach was employed using secondary data from 1996 to 2016 in the Capricorn District Municipality. The results revealed that the productivity of the tourism sector, finance sector, power sector, and the trade sector are positively related to poverty alleviation. On the other hand, the productivity of the manufacturing sector, the agriculture sector, and the construction sector had a negative relationship with poverty alleviation. Thus, the local regional government should improve these sectors through the introduction of skills training, improved production methods, and providing incentives and subsidies to strategic industries.