Addressing Hunger and Poverty Eradication: Recursive Dynamic CGE Modelling Analysis Using South Africa as a Case

Abstract

This study evaluates growth and income distribution targets needed to alleviate poverty and eradicate hunger, and assesses strategies to achieve these goals in rural areas in South Africa. Most development policy studies concentrate on growth, inequality, and poverty reduction, while explicit SDG-related applications receive less attention, especially in Africa. To fill this gap, we apply a framework that combines a recursive dynamic CGE model with a microeconomic simulation model in a top-down and bottom-up fashion. We explore two scenarios: a business-as-usual simulation and an agricultural growth simulation that tests investment, export enhancement, productivity improvements, and social assistance extension. The agriculture policy includes targeted social assistance. Halving poverty and eradicating extreme hunger requires 2.7% annual economic growth and 3.6% agricultural growth from 2018 to 2030. In the business-as-usual scenario, poverty is expected to rise from 55.2% in 2015 to 56.1% by 2030, with 24% still below the food poverty line. The agricultural growth scenario can advance hunger and poverty goals if individual consumption increases by 2.6% annually. Achieving SDG targets for hunger and poverty demands interventions beyond agricultural policy. South Africa can achieve its hunger and poverty SDG goals through a combination of agricultural investments, social assistance, and labour policies.