TITLE:
Growth and Competitiveness of Non-Traditional Agricultural Exports in Zambia
AUTHORS:
Chibamba Mwansakilwa, Gelson Tembo, Johnny Mugisha
KEYWORDS:
Export Horticulture; Growth; Competitiveness; Cointegration; Error Correction Models; Zambia
JOURNAL NAME:
Modern Economy,
Vol.4 No.11,
November
29,
2013
ABSTRACT:
This study investigates the determinants of growth and
competitiveness of Zambia’s flower exports to three main export destinations—the Netherlands, the UK and Germany—using annual time
series data from 1990 to 2010. Acknowledging that time series data are often nonstationary, leading to misleading economic
analyses, the study employs cointegration and error correction models to
establish factors of conditions growth and competitiveness of Zambia’s flower exports. The results show that supply and competitiveness of flower exports
are positively influenced by domestic flower
production, real GDP and population of importing countries, relative
depreciation of domestic currency and world export prices. In contrast, exports
from competing countries and real interest rates were found to negatively influence
flower exports. This seems to suggest that monetary policies and exchange rate
regimes that promote trade are required for enhancing and fostering an
environment favorable for flower production and exporting. In addition, the
replacement of Zambia’s flower exports by those from other countries dictates
that there must be a quality improvement so the country’s exports can compete
favorably with those from other countries.