The Relationship between Exports and Economic Growth: The Case Study of Gambia

Every country’s desire is sustainable economic development through economic growth. For most countries, the consistency of its gross domestic product is of huge concern for its government and policymakers. Either a developed or developing country, economic growth has been seen to promote export; similarly, export is viewed to be an essential determinant of economic growth. But the debate of what causes economic development is heated among researchers and economists as there is yet to be any consensus on the topic. This paper contributes to the investigation of the relationship between export and economic growth for the Gambia from 1990 to 2017.
Using annual time series economic data, we applied the econometric techniques of ADF test to prove stationarity, acceptance of the null hypothesis of Granger causality and Johansen’s cointegration test. The Vector Autoregressive (VAR) model was conducted and the findings indicate a positive relationship between export and economic growth. The Rsquared of 77.67% from the vector autoregressive test results made us accept the export-led growth hypothesis for the Gambia. Thus, we recommended policymakers to create judicious and strategic policies that would promote export to boost the economic growth of the Gambia.

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By: Musa Sawaneh, Development Economics, Kocaeli University