Analysis of Namibian Fishing Product Export Prospects and Diversification: Gravity Model Approach

Abstract

This study endeavoured to analyse Namibian fish export prospects and level of diversification through using a Gravity Model Approach on cross-sectional data, specifically testing whether a Random Effect or a Fixed Effect Model better suits the model. The B1 dummy variable for local competition was found to be highly elastic and a positive influence on fish consumption in export destinations, as the local fish production drives for high demand. Analysis followed of the distance and days to arrive to the destination, which were found to negatively influence trade, indicating that geographical location for Namibia, as well as economic scale of size, is negatively influencing fish trading owing to the fact that it has higher handling costs and degree of perishability. The study recommends that the Namibian fish sector should handle better the regulatory environment, which includes permits, tariffs and labour laws, and requires consolidation and coordination to achieve economies of scale for transportation. Furthermore, it is important to have consistent improvement in infrastructure.