Examining exports’ contribution to economic growth in Southern Africa: a panel data analysis (2005-2016)

Abstract

Despite other contributions made to economic growth by other variables such as real growth in services and population growth, there has been an unending debate between exports’ contribution to economic growth in the Southern African Development Community (SADC). The purpose of this study was to examine the contribution of exports to economic growth in Southern African Countries for the period 2005 to 2016. A Random Effects Panel Data Model (REM) was used as the estimation technique and the Pedroni Residual Cointegration Test was used to test for the long-run relationship between exports and economic growth in SADC. The results from REM indicated that exports played pivotal role in influencing economic growth for the Southern African Development Community countries during the period under study. Variables such population growth and real growth in manufacturing proved to have a positive contribution to economic growth. Foreign direct investment proved to be statistically insignificant in this study. The cointegration test results show that there existed long run relationship between exports and economic growth. This study concluded that exports were a driver of economic growth in the SADC region for the period under study. It was recommended that countries such as Angola, Botswana, DRC, Mauritius, Mozambique, Namibia, South Africa, Zambia and Zimbabwe would focus on polices and free trade agreements with countries which are in the European Union (EU) and the Asian Pacific Economic Cooperation (APEC) with the aim to boost economic growth and improving international relations. More so, the extension of the Customs and Trade Facilitation was also recommended to allow easier exportation of goods and services to developed countries for countries which are landlocked in the Southern African.