Rural Energy Access and Agricultural Productivity in South Africa

Abstract

Access to energy is critical for agricultural productivity and it directly contributes to the promotion of a more commercialized agricultural sector. South Africa embarked on massive electrification programme across the country with the sole aim of promoting access to electricity in the country from 34 percent in 1991 to 77 percent in 2002 and to 85 percent in 2018 but the access to electricity more skewed to the urban areas than the rural areas. This arrangement has a more serious implications on the productive and economic activities located in the rural areas of South Africa since most agricultural related activities takes place in the rural provinces of the country. Therefore, issues related to access to electricity, especially in the rural areas, are crucial for the overall growth and development of the country since it largely determines the viability and productivity of agro-allied industries. Empirical studies conducted in South Africa mainly concentrated on energy policy guarding the provision of energy for industries and population living in the urban areas but largely neglects the relevance of rural energy access as a catalyst for agricultural productivity in South Africa. Hence, this study is premised on a Cobb-Douglas production function which describes the relationship between agricultural productivity as a function of access to electricity. The study found that rural energy access has a significant negative influence on agricultural productivity in South Africa. While urban energy access promotes promote agricultural productivity in South Africa. The result further indicates that labour force participation rate, gross fixed capital formation and adequate rainfall were seen to be relevant drivers of agricultural productivity in South Africa.