An Analysis of the Determinants of Export Performance of Developing Economies within the Sub-Saharan Africa: The Case of SADC Member Countries (2001-2015)

Abstract

This paper analyzed determinants of export performance in Southern Africa Development Community (SADC) sub-region over the period 2001 to 2015 covering all 15 member countries namely: Angola, Botswana, Democratic Republic of the Congo (DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. The study used panel data technique where feasible generalized least square (FGLS) method was further used to give efficient estimates. The study used both, demand side and supply side determinants of export performance namely: Average Income of Major Export Destination Countries (AIMED) and Real Effective Exchange Rate (REER); and Gross Domestic Product (GDP), Foreign Direct Investment (FDI), Terms of Trade (TOT), Exporting Country’s Infrastructure (INFR), Trade Openness (TOP), and geographical positioning of an exporting country (landlockedness of the country), respectively. The estimated results revealed that Gross Domestic Product, Average Income of Major Export Destination Countries, Terms of Trade and Trade Openness positively and significantly influenced the export performance of the SADC sub-region by 1% while Real Effective Exchange Rate and Exporting Country’s Infrastructure affected the export performance positively and significantly at 5% and 10% respectively. In contrast, the Foreign Direct Investment (FDI) and geographical positioning of an exporting country (landlockedness of the country) had insignificant impact to the export performance of the sub-region. The study concluded with policy recommendations to invest immensely in internal, to embark on measures that would lead to improve terms of trade (TOT), to enhance their macroeconomic policies that are geared towards improving economic growth, to open up in performing trade with the rest of the world, and to attract more FDI that target export sector.