Analysing the contribution of exports to economic growth in Zimbabwe: (1990-2020) · Electronic Theses and Dissertations

Author

Mapwanya, McDonald Joseph

Title

Analysing the contribution of exports to economic growth in Zimbabwe: (1990-2020)

Abstract

Empirically analysing the impact of various macroeconomic factors on economic growth will assist a nation in developing beneficial policies to promote economic growth in this regard. Zimbabwe have been recording low RGDP and suffering from various economic problems for the past three decades and these issues have heightened the researcher’s interest to carry out this research. Using time series data from the World Bank, this study analysed the role that exports played in Zimbabwe's economic growth from 1990 to 2020.The econometric model for this study was estimated using E-views 7.1 and ordinary least square (OLS) method. The findings showed that exports are statistically significant in explaining the changes in economic growth and that, over the period under study, they had a negative contribution to economic growth with a 1% increase in exports leads to 0.617% decrease in economic growth. While imports and gross capital formation made positive contributions to economic growth, this study found that foreign direct investment was statistically insignificant. Cointegration test for exports and economic growth was performed using the jahansen cointegration test and results shows that there is a long –run relationship between exports and economic growth. It should be emphasized that the majority of Zimbabwe's exports are raw materials and semi-finished goods with minimal market value. Therefore, it is advised that the Zimbabwean government must adopt strategies for export value addition and beneficiation in order for them to maintain their competitiveness and fetch a higher price on the global market. The government of Zimbabwe should improve access to finance for local businesses to help them to increase their exports and economic growth. This can be done by providing access to low- interest loans, grants and other financial incentives. Therefore, focus should be placed on policies that will increase the volume of a nation's exports while also encouraging the emergence and expansion of domestic industries, thereby boosting Zimbabwe's economic growth, which is the primary macroeconomic goal of any economy.

Date

June 2023

Publisher

BUSE

Keywords

macroeconomic, time series, economic growth

Supervisor

Dr S Mutsvangwa