Abstract
The article analysed the trade in services led growth in ten selected countries in the Southern African Development Community region using econometric regression models. Panel data obtained from the World Bank and United Nations Conference on Trade and Development databases for the period 1992 to 2015 was analysed. Five variables were used in the econometric analysis. The marginal effects of service and goods exports were positive while those of goods and service imports were negative and highly significant as was expected from literature. Service exports registered an impact that was almost threefold that of service imports and greater than goods exports. Policy-makers are encouraged to, clearly define their trade in service strategy and reduce or remove trade restrictions. The study is of importance to researchers, the private sector and government policymakers.
Highlights
Services have become a critical component of economic growth and development across the globe
The article analysed the trade in services led growth in ten selected SADC countries using econometric regression models
Econometric models exposed the relationship that exists between trade in services and economic growth, which relationships are critical in informing policy formulation and implementation in Africa
Summary
Services have become a critical component of economic growth and development across the globe. Sáez et al (2015) argue that increased agricultural productivity and growth in the manufacturing sector have been the normal steps out of poverty This has changed the world over as the world has been experiencing a different economic trajectory that has seen services trade taking the lead in economic growth and development. The United Nations Conference on Trade and Development [UNCTAD] (2015a) reports that a number of countries in Africa have become serviceoriented economies contributing almost half of Africas total output. UNCTAD (2015a) states that Africa has become a marginal player in global services trade with an export share of 2.2%. Research has shown that trade in services proves to be a critical component for economic growth and development, the sector is being seriously threatened by a lot of challenges in Africa.
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