Abstract:
Despite the deployment of several export promotion and diversification strategies in Africa, poverty remains high. Therefore, this paper examines the effect of export diversification on poverty. The dynamic panel data approach is used to estimate data for 30 selected African countries between 1981 and 2020. The empirical analysis shows that export diversification exerts a positive and statistically significant impact on poverty reduction. The results also indicate that countries characterised by macroeconomic stability benefit more from the effect of export diversification on poverty alleviation than those with weak macroeconomic fundamentals. Further checks using alternative poverty indicators, such as the poverty gap and welfare, such as the Gini inequality index, validate these findings. The findings support the view that promoting export diversification is crucial for reducing poverty and should be complemented with policies that improve macroeconomic stability.