Agriculture and Manufacturing Sector Growth in Namibia During the Period 1981 to 2012: A Granger Causality Test

Abstract

Namibia became independent in 1990. Since then, the democratic government has pursued various development policy tools to empower Namibians economically. The 4th National Development Plan identified four strategic economic growth enhancing activities, namely agriculture, manufacturing, logistics and tourism. Agriculture remains the largest employer while manufacturing, logistics and tourism are growing, but slowly. This paper is premised on investigating whether or not there is a causal and long term relationship between agriculture and manufacturing sector growth over the period 1981-2012. Ascertaining the direction of the relationship is part of the objectives. Analytical methods that were used include unit root, correlation test and a Granger Causality model. With the use of time series data, the results confirmed stationarity of the data. With 31 observations, no causal relationships were established between agriculture and manufacturing in Namibia. Appropriate policy interventions are required to influence how the two sectors should benefit from each other. Such holds potential for both sustained employment creation opportunities and economic growth in Namibia.