Analysing Zambia's trade in Comesa : a gravity model approach
Date
2019
Authors
Kapindula, Chileshe.V.
Journal Title
Journal ISSN
Volume Title
Publisher
The University of Zambia
Abstract
This paper analyses the factors affecting bilateral trade flows between Zambia and other Common Market for Eastern and Southern Africa (COMESA) member states. Empirically, this looks at whether or not Zambia has become more integrated in the COMESA region. Two analytical approaches were used to determine this: calculation of Trade (export and import) Intensity Indices and (panel) estimation of gravity models for Zambia’s export and import trade flows from the individual member states for the period 1995-2015. Fixed Effects and Random Effects models were used to estimate the gravity model to achieve specific objectives of the study. It was found that both Zambia and the trading partners’ incomes were significant in determining Zambia’s level of exports and imports from the region. There was significant export trade to countries sharing a border with Zambia. The common border was, however, not as significant for import trade. Infrastructure was significant in determining both exports and imports into Zambia. The distances between trading partners was significant and showed that an increase between distances reduces both export and import trade. It was also found that Congo D.R., Malawi, Zimbabwe, Swaziland, Rwanda, Mauritius, Kenya, Burundi and Uganda were the most open importers (from Zambia) while Zambia was found to be most open to imports from Zimbabwe, Congo DR, Swaziland, Malawi, Mauritius, Kenya Seychelles. The estimates of the other countries were found to be statistically insignificant. This was complemented by calculation of the export and import intensity indices to analyse the pattern of trade in the region. The pattern revealed that DRC, Zimbabwe, Malawi and Kenya have been strong partners both in terms of imports and exports. Swaziland and Mauritius were also found to be strong trade partner, although more so in terms of imports than in exports. In light of these findings, the study made the following recommendations: Firstly, the region as a whole must work to address the costs of business logistics, inland infrastructure; secondly, member states perpetuating noncompetitive trade practices should embrace competition and embrace the spirit of regional integration; and finally, more efforts should by focused on promoting trade to harness all the trade potential by addressing the existing Nontariff barriers (NTBs) between these member states.
Keywords: Zambia, COMESA, gravity model, trade intensity index
Description
Thesis
Keywords
Common Market for Eastern and Southern Africa. , Africa, Eastern--Commerce. , Africa, Southern--Commerce.