Impact of non-oil sectors on GDP/capita in selected African countries: evidence from panel analysis

Abstract

PurposeThe purpose of this paper is to investigate the impact or contribution of non-oil sectors on economic growth (GDP/capita) of some selected African countries using panel data analysis.Design/methodology/approachThe paper focused on secondary data for the period 1991–2019 for macro parameters, including agriculture, industry, export and service, and GDP/capita received from World Development Indicators (WDI). Panel unit root tests like Levin, Lin and Chu test and Im, Pesaran and Shin test, Johansen co-integration test, Granger causality test and an error correction model were also applied to the data for analysis.FindingsThe study reveals no causality from agriculture to economic growth, which implies most of the African countries (used in this study) have neglected agriculture as a source of economic growth. The industry independent variable was of no effect on these countries’ economic growth, whereas the findings reveal that industry has causality on economic growth. Economic growth has no causality on the industry, which means the industry is not contributing to economic growth. The study also shows no causality from export and service to economic growth, but a causality runs from economic growth to export and service.Originality/valueThe paper examines the contribution of the non-oil sectors to economic growth in selected African countries.

The role of agriculture, industry and the service sector in economic growth: The case of Mozambique

“…With the aid of a computable general equilibrium (CGE) model, capital and reduced transaction costs through increases in value added for all agricultural processing activities were found to be fundamental to structural transformation. Zhang and Diao (2020) combined a growth decomposition exercise with Other studies that have aimed to assess the effect of agriculture on economic growth and other economic sectors or development include that by Chu et al (2022), who used the Schumpeterian growth model to explore how agricultural technology affects the endogenous take-off of an economy; Gollin (2010), who reviewed theoretical arguments and empirical evidence for the hypothesis that improvements in agricultural productivity lead to economic growth in developing countries; Adeosun and Gbadamosi (2021), who reviewed the contribution of non-oil sectors (that is, agriculture, industry, export and service) on economic growth and finds that almost all factors have no causal effect on economic growth; and Chebbi (2010), who assessed the role of agriculture in economic growth and its interactions with other sectors of the Tunisian economy, and noted that, although the issue of the contribution by agriculture to economic growth is of interest to policymakers, it is rarely examined empirically.…”