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Are Exports Productivity Enhancing? A Panel Analysis of Sub-Sahara Africa

This paper examines the long-run relationship between exports and economic growth in Sub-Sahara Africa (SSA) 
to ascertain, if and how, exports drives economic growth through the productivity channel as opposed to volume contribution 
of exports to gross domestic product (GDP). We sampled seven SSA countries for the study including six of the most 
competitive countries in SSA by the Global Competitiveness Report ranking. Applying the panel analysis framework to a data 
set spanning 1987 to 2014, we found cointegration among non-exports GDP, gross capital formation, human capital, exports 
and imports. Estimates of the parameters of the cointegrating equation show a significant negative relationship between nonexports GDP and exports, suggesting that exports are productivity reducing in the long-run. However, there is a significant bidirectional causality between exports and economic growth. We conclude that, the dynamic effects of exports on growth 
through an economy-wide productivity increase are best achieved with the industrial sector as the leading exports sector.

CO AUTHORS: Oliwasola Oni
CATEGORY: journal or article
TAGS: Exports, Productivity, Sub-Sahara Africa

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