TITLE:
Study on Import and Export-Led Economic Growth: Cases of Botswana, Namibia, South Africa, and Zimbabwe in Southern Africa
AUTHORS:
Kudzai Shamaine Tivatyi, Jian Min Shou, Kodjo N’Souvi
KEYWORDS:
Economic Growth, Export-Led Growth, Import-Led Growth, VECM, Co-Integration
JOURNAL NAME:
Open Journal of Business and Management,
Vol.10 No.2,
March
9,
2022
ABSTRACT: This study aims to investigate the relationship between exports, imports
and economic growth of a sample of four countries in Southern Africa for the
period 1980-2019. In doing so, we check whether the Export-Led growth (ELG), Import-Led Growth (ILG), Growth-Led Export (GLE) and growth-led import (GLI) propositions hold in four Southern
African economies, namely Botswana, Namibia, South Africa and Zimbabwe.
Specifically, the present study tries to 1) understand to which extent imports,
exports and economic growth are correlated in the short and long run in
Botswana, Namibia, South Africa and Zimbabwe; 2) assess the effects of imports
and exports on the economic growth in each of these countries. To this end, we
used time series data, covering the period 1980 to 2019. In doing so, the
co-integration tests, Vector Autoregressive “VAR” model (for South Africa) and vector error correction models “VECM” model (for Botswana, Namibia and
Zimbabwe) then Granger causality tests are applied to investigate the
relationship between the variables. The results show that both short run and
long run relationships exist among these variables. On the one hand, our
findings failed to validate the export-led growth hypothesis for South Africa
in the long-run but provided support for the exports-led growth hypothesis in
the short-run. The analysis finds prominent
evidence of bidirectional causality between exports and growth for
Botswana, Namibia, and Zimbabwe in the long run. On the other hand, a
suggestive evidence of unidirectional causality running from growth to imports
was found in the case of Botswana, Namibia and South Africa. In addition, bidirectional causality between exports and
imports was validated by Zimbabwe
case study. Key implications are that the exports development could create
employment opportunities and other spillovers. Policy-makers should
improve and strengthen the competiveness of export sector. Moreover, Namibian
case study confirmed the imports-led growth hypothesis in the long- run,
implying that an import liberalization policy could be useful for economic
growth in Namibia.