ASSESSING THE IMPACT OF AGRICULTURAL GDP, LABOUR DYNAMICS AND EXCHANGE RATES ON POVERTY ALLEVIATION IN SELECTED SUB-SAHARAN AFRICAN COUNTRIES: A MODERN DYNAMIC PANEL ANALYSIS USING GMM METHODOLOGY

Abstract

This study examines the relationship between agricultural GDP, agricultural labour, exchange rates and poverty outcomes in 24 selected Sub-Saharan African countries from 2005 to 2022. The study applies a dynamic panel framework using pooled ordinary least squares (POLS), fixed effects (FE), firstdifference Generalized Method of Moments (FD-GMM) and system Generalized Method of Moments (SYS-GMM), with SYS-GMM selected as the preferred estimator based on model specification and diagnostic tests.The findings show that lagged poverty is positive and statistically significant, indicating strong persistence in poverty outcomes across the sampled countries. Agricultural labour is also statistically significant, suggesting that labour dynamics in agriculture remain important in explaining poverty outcomes. However, agricultural GDP and exchange rate are not statistically significant in the preferred SYS-GMM specification, so their direct effects are interpreted cautiously. The study concludes that poverty reduction in the sampled countries requires sustained, productivity-oriented agricultural labour policies, supported by broader agricultural transformation and macroeconomic stability. The findings are limited to the selected countries, study period and model specification.