Abstract:
This study investigates the direction of causality between exports,
imports and GDP per capita in the SACU countries: Botswana,
Lesotho, Namibia, South Africa and Eswatini (Swaziland). The TodaYamamoto augmented Granger no-causality approach is applied.
The study finds mixed causality results between exports, imports,
and GDP per capita for the different countries. The export-led
growth hypothesis is supported for Botswana and Eswatini, while
import-led growth hypothesis is only confirmed in Namibia. Results
suggest that a bi-directional Granger causality between exports
and growth for Botswana and bi-directional Granger causality
between imports and growth for Lesotho and South Africa exist.
There is therefore no clear time-precedence. Finally, there is evidence of growth-led export hypothesis for Botswana, Lesotho, and
South Africa. These mixed findings indicate that SACU countries
should not solely dedicate their available resources to pursuing
trade openness in promoting economic development but also
address domestic economic reform strategies.
